Search
 
Analysis

Working Capital Management: There Goes the Rigor

Improved working capital provides sunshine during recessions rain showers.

By Russ Banham | Updated on June 13, 2013
From a corporate perspective, the dark clouds of the recession did have one silver lining: Companies improved their working capital performance. With revenue opportunities stalled, if not declining, organizations enhanced their working capital due diligence, growing margins by taking an ax to days sales outstanding, payables outstanding, and inventory.

No sooner did the dark clouds disperse, however, than some companies went back to their old ways of mismanaging working capital, effectively letting go of the rigor. In their eagerness to land new customers, some companies extended payment terms and let inventory levels rise so that they would have enough product in the pipeline and on the shelves to satisfy percolating demand.

Wouldn’t it be better to strike a balance between diligent working capital management and giveaways for revenue opportunities? The answer is yes, but the solutions are not easy. “There is great value in finding some equilibrium,” said Miles Ewing, principal and head of the financial performance management practice at Deloitte Consulting. “But getting there requires metrics, flexibility, and a bit of give and take.”

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Now’s the Time to Get Ready for FedNow

Now’s the Time to Get Ready for FedNow

T&R Staff |

Part 1 of 2: What does the instant-payments landscape look like now, and how will it change when the Fed enters the market later this month?

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.