In few words optimising Net Working Capital for a business means making sure to maintain a sufficient level of cash flows to meet its ongoing operating costs and short-term debt obligations.
Finding the right level of NWC for a business is fundamental and a common factor across all types of business, and it is essential to have this at a constant balance and proportionate to the volume and type of business activity. It is fundamental to keep cash flows under control by systematically measuring and controlling income and expenses.
In other simple words, Net Working Capital expresses the net financial requirement derived from the operating cycle and optimize this to the best extent possible to support critical liquidity levels for your business, particularly in the context of historic and prevailing market conditions.
Our focus will be on:
- Debtors – sell to the right people | assessment for recoverability of receivable balances and optimisation of payment terms
- Creditors – optimisation of cash outflows | assessment of credit term facilities, identification of potential cost savings from early payment clauses
- Inventory – optimisation of inventory management through supply chain collaboration
Supply Chain Collaboration
Supply chain visibility and cooperation goes far beyond the mere automation of order-to-cash and procure-to-pay cycles, typically supported by some form of electronic data interchange.
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Warehouse & Logistics Management
Inventory is key for operations management. Apart from being a significant working capital component, effective inventory management is a strategic and tactical component in an organisation’s value chain.
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