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Working Capital Management A Top Priority for Many Executives in Year Ahead

NEW YORK, Feb. 15, 2022 — Nearly half of C-suite and other executives say that managing working capital will be a high priority for their organizations in the year ahead with 33.6% keeping it a top priority and 14.7% making it a higher priority, according to a Deloitte poll.

Further, 33.5% of polled executives describe their organizations as in “growth mode” following COVID-19-driven disruption — a rate nearly triple that of July 2020 (13.2%), if falling slightly short of predictions at the time which had 45.1% hitting “growth mode” by now.

“It’s encouraging to see many executives remaining focused on managing their organizations’ working capital,” said Anthony Jackson, a Deloitte Risk & Financial Advisory principal who focuses on working capital and liquidity services , Deloitte Transactions and Business Analytics LLP. “As leaders fight to return their organizations to what they deem to be ‘new normal’ operations, sustained commitment from a number of executives working closely together will remain key with so many economic, geopolitical and societal unknowns ahead.”

Should finance and treasury teams coordinate more on working capital management?

Respondents report that CFOs (55.9%) and treasury leaders (15.3%) are most likely to be responsible for improving organizational working capital. However, not all see finance and treasury functions teaming closely on working capital; 25.6% of polled executives say their organizations’ finance and treasury functions could work more closely together on it (25.6%) — and 5.8% of respondents report no such teaming occurs at all.

“It’s worth highlighting that executives who describe their organizations as in ‘growth mode’ are also most likely to say that their finance and treasury teams work as closely together as they should,” said Niklas Bergentoft, Deloitte Risk & Financial Advisory’s treasury advisory leader and a principal, Deloitte & Touche LLP. “Honed forecasting and improved visibility improvements around liquidity improvement and cash generation can better inform executives’ decisions and help position organizations for growth and performance improvement.”

Are accounts receivables practices past due for improvement?

When it comes to accounts receivables (AR), 40% of respondents’ AR teams wait until after invoice due dates to request payment on invoices — with half waiting 1-10 days after due date (20.6%) and the other half waiting until 10+ days after (19.4%) to do so.

Jackson continued, “Sometimes even simple analyses and process improvements can be executed to help improve working capital. For example, proactively analyzing customers’ payment behaviors in a manner that goes beyond the typical Days Sales Outstanding (DSO) can help identify opportunities for financial process and organizational financial standing improvements.”

About the online poll

More than 1,700 C-suite and other executives were polled online during a Deloitte webcast titled, “Working capital roundup: A resilient response Q1-20 to Q2-21” on Nov. 16, 2021. Answer rates differed by question. A similar online poll was conducted in July 2020.

About Deloitte

Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 345,000 people worldwide connect for impact at www.deloitte.com.

Media contacts:

Shelley Pfaendler
Public Relations
Deloitte Services LP
+1 212 492 4484

Taylor Graham
Public Relations
Deloitte Services LP
+1 410 575 6707

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