The Deloitte Module in CFO Journal produces articles covering issues of interest to CFOs, including business technology, M&A, tax and financial reporting.
Making working capital work
The reasons to consider working capital improvements are compelling. Many companies, after all, remain capital-intensive. Some still see low levels of turnover for accounts receivable and higher turnover on the accounts payable side, conditions that can point to a need to improve working capital management. Moreover, boards understand that efficient management of working capital can potentially free up cash for other uses that can build shareholder value, such as mergers and acquisitions.
Many companies have the opportunity to increase shareholder value by managing working capital in a more efficient manner, but are often held back by a number of internal challenges.
With working capital optimization increasingly on boards’ radars, CFOs may want to address those internal challenges—to free cash that can be used to fuel growth.
In this issue of CFO Insights, we examine the challenges to optimizing working capital and offer some steps on how to unlock the rewards.