Working Capital and cash flow planning for liquidity improvement

Rapidly identifying impactful and actionable opportunities to strengthen the liquidity position

In the current situation it is critical to control your short term cash needs in the face of declining sales prospects. The speed and effectiveness of businesses’ response to the financial impact of Covid-19 will be tested in the coming months. In certain cases, the scale and urgency of the short term cash and working capital requirements of our clients have taken the company’s management team by surprise, emphasising the need to act swiftly and decisively.

Therefore, all businesses should have a focus on cash flow planning to identify its short term and medium term cash requirements and on optimising working capital by identifying ‘quick win’ self-help measures to deliver rapid, tangible cash release.

How Deloitte can help

As we understand that resources, capabilities and time are limited, we are able to support in quickly setting up a robust cash flow planning which can be linked to your business plan and support in rapidly identifying working capital improvements.

As most companies experience leakage in their Accounts Receivable and Accounts Payable, we have developed a rapid diagnostic to identify leakages and provide an outline for working capital optimizations within two weeks. With this diagnostic, we are able to provide actionable recommendations in these areas within a short time through data analytics, which could serve as basis for further cash improvements and strengthening the cash flow planning.

Using a business’s own historical company AR and AP data on transactional level – when available complemented with customer/vendor master data – analyses such collection performance, payment behavior, ageing profiling and payment terms comparisons can be conducted.

The analysis will be presented and discussed in an (online) workshop where we will discuss with management the findings and recommendations for ‘quick win’ self-help measures, as well as a possible roadmap and next steps.

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