Solution: Improvement in working capital

Solution:
Improvement in working capital
www.pwc.es
Solution:
Improvement in
working capital
Solution: Improvement in working capital
1. Introduction
Companies that experience difficulties accessing finance, present outstanding credits for
forthcoming months or fail to reach estimates or comply with covenants due to the drop in
consumption, probably need a working capital improvement program. Efficient working capital
management permits managing the liquidity of companies both in the short and long-term,
obtaining visibility for future liquidity requirements, liquidity in the bearish cycle and flexibility
with the parties concerned, especially with financing providers.
At PwC we have a team of experts in the efficient management of accounts payable, accounts
receivable and inventory and the implementation of cash generation cultures in complex
organisations. Our approach consists of carrying out a diagnostic study of working capital
management that quantifies potential improvements through an internal and external analysis,
designing a sustainable management model that acts simultaneously over the organisation,
people and systems of the company and providing support in the implementation of such model.
2. Potential problems
Syntoms that represent the need to consider a working capital improvement program include:
•
The existence of a wide variety of payment terms and conditions and no clear supplier
payment policy.
•
An average collection period longer than the period established in the defined policy and
in accounts payable not all the information is available in the systems.
•
In B2B transactions, the average collection period is longer than the payment period.
•
Inventory rotation is low and more than 5% of the inventory has a rotation of more than
90 days.
•
The incentives of the management team and directors’ report do not establish cash as one
of the main points.
Solution: Improvement in working capital
3. How we can help
•
We establish policies and procedures aimed at generating cash in a sustainable manner in
our clients through the implementation of a cash culture.
•
We establish improvement processes in collection and payment actions.
•
We renegotiate contracts with customers and suppliers, improving current terms and
conditions.
•
We improve the inventory planning and management process, reducing inventory levels
and work in process..
4. Invertimos en relaciones con nombre del cliente
PwC ayuda a organizaciones y personas a crear el valor que están buscando. Somos una red de firmas
presente en 158 países con cerca de 169.000 profesionales comprometidos en ofrecer servicios de calidad
en auditoría, asesoramiento fiscal y legal y consultoría. Cuéntanos qué te preocupa y descubre cómo
podemos ayudarte en www.pwc.com
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