WORKING CAPITAL
What do you want to improve?
How much benefit will the improvement make?
4 STEPS FOR IMPROVEMENT
Set up KPIs
Set up KPIs and set targets. This allows you to continously follow the status of the working capital and if you will succeed with the targets set.
Working capital can be measured compared to net sales or in days.
Find improvement opportunities
Find improvement opportunities by the analysis of data and processes connected to Working Capital, This exercise should answer how much the cash flow will improve.
Prioritize
Prioritize which activities to start with.
Taking value, time and complexity into consideration.
Governance structure
Who is responsible of what?
A successful project requires clear responsibilities.
Why focus on Working Capital Management? Maybe your company has a lot of inventory, maybe too much. Maybe your customers are paying late and have long payment terms? Maybe your purchasing department does not focus on payment terms and maybe the ERP-system is not updated with latest terms?Maybe your company could have a better cash flow and be more efficient?