Releasing cash, supporting growth

Releasing excess levels of cash tied up in working capital represents the cheapest form of finance available to a business. Cash freed up can be used to reduce debt, increase the return to owners, or invest to fund your growth ambitions. A business needs first to identify the right opportunities, then design and implement new processes, in order to sustainably release cash from working capital. 

Effective working capital management requires a strategy that focuses on maintaining efficient levels of both current assets (ie accounts receivable, inventory) and current liabilities (accounts payable) to effectively manage your business.

However it is just one element of business performance, and maintaining control of working capital as companies increasingly look to grow, invest in new products, diversify, and consider M&A activity, whilst balancing profitability, operational efficiency, quality and customer experience, can be extremely challenging.

Traditionally, managing an organisation’s working capital has sat squarely with a CFO or finance team. It is rare that other parts of the business take responsibility for managing and optimising working capital. However looking at the balance sheet is just one lens for identifying excess and, more often than not, encourages businesses to jump straight to the ‘solution’ stage without establishing the root causes of the problem.

meet our people Matt Byrnes

Partner, Financial Advisory and National Head of Restructuring Advisory

Find out more

We believe that the balance sheet only shows the symptoms

Businesses must take a more holistic look at their processes across all functions, and engage all areas of the business including finance, operations, supply chain, procurement and sales in order to implement and manage an effective working capital strategy. All parts of the business must buy in. This is how businesses can really win and achieve tangible, cash benefits.

Our methodology considers working capital as a timeline impacted by dozens of processes across all functions of the business. There is no one size fits all – we scale this methodology to reflect your organisation and its processes, as well as considering the environment and industry in which you operate.

Download PDF
Download PDF [ 225 kb ]

Methodology

Our proven methodology

There is no one solution for effective working capital management. The Grant Thornton team applies our proven methodology that goes beyond a standard high-level approach focused on short-term benefits. Instead we break-down each of the three key cycles: Order to Cash (ie accounts receivable), Procure to Pay (ie accounts payable) and Forecast to Fulfil (ie inventory) into eight separate processes, and up to 99 individual levers in order to identify where there is opportunity for improvement in your processes to optimise working capital. Sometimes only a few levers are relevant to a given business, but the impact can be significant.

Then we work with you to design and implement new processes where opportunities are identified, and assist you to embed the culture and discipline required to ensure they are effective through our implementation and monitoring support program.

GlobalAccessing global expertise

Our Grant Thornton network operates across more than 130 countries. By engaging your Grant Thornton contact, you have access to a consistent and coordinated team applying our proven working capital optimisation methodology globally, wherever you do business.

For more information, please contact:

Matt Byrnes

Partner - Financial Advisory and National Head of Restructuring Advisory
Melbourne
T +61 3 8663 6010
E matt.byrnes@au.gt.com


Philip Campbell-Wilson

Partner - Financial Advisory
Sydney
T +61 2 8297 2501
philip.campbellwilson@au.gt.com


Graham Killer

Partner - Financial Advisory
Brisbane
T +61 7 3222 0384
E graham.killer@au.gt.com