- Financial Advisory
- Corporate finance Corporate finance
- Debt advisory
- Forensic consulting Forensic consulting
- Payments advisory
- Restructuring advisory Restructuring advisory
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.
Partner, Financial Advisory and National Head of Restructuring AdvisoryFind 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.
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.
Accessing 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.
What are the indicators that Working Capital Optimisation could provide value to your business?
All businesses need cash. Our Working Capital Optimisation methodology helps businesses at all stages of the lifecycle release cash to achieve their strategic ambitions.
We provide at the link below 10 common indicators that suggest it's the right time to get in touch with one of our Working Capital Optimisation specialists to assist.
For more information, please contact:
Partner - Financial Advisory and National Head of Restructuring Advisory
T +61 3 8663 6010
Partner - Financial Advisory
T +61 2 8297 2501
Partner - Financial Advisory
T +61 7 3222 0384