CTcon: Working capital management

Wor­king ca­pi­tal ma­na­ge­ment


Especially in times of uncertain financial markets, the management of liquidity and working capital becomes more and more important. Their optimization supports the following goals: The financial flexibility of the company increases, the value-oriented performance indicators improve and the company value is positively influenced. In particular, the year 2020 has led to disruptive changes or a change in risk assumptions at many companies as a result of the "Corona crisis". The essential goal in times of crisis is professional cash management ("Cash is King") and the resulting short-term cash management and optimization.

A key lever here is working capital management. Good receivables management, low inventory levels and rapid turnover of goods, as well as improved payment terms to suppliers and customers, are used as instruments in business practice. They are anchored in processes such as order-to-cash, forecast-to-fulfillment and procure-to-pay, which are set up cross-functionally. Therefore, the challenge on the way to reduce working capital lies in the need to aim for cross-process and cross-functional optimization and to achieve harmonization of the processes between purchasing, sales, supply chain, production planning, production and accounting. To meet this challenge, working capital management must be anchored as part of performance management.


Steps to successful working capital management

1. Create transparency
  • Benchmarks to identify and clarify the need for action
  • Analysis (interviews, data analysis, process mining) to identify optimization measures and estimate initial cash potentials
  • Analysis and evaluation of WCM processes
2. Optimize working capital
  • Deep-dives to analyze inventories, customer and supplier structures
  • Understanding the specifics of the business model and the impact on working capital
  • Derive optimization measures based on CTcon project experience (catalogs of measures) and the specifics of the client's business model
  • Implement measures in the cash-to-cash cycle
3. Anchor change and sustainability
  • Strengthen awareness of working capital within the company
  • Analyze existing reporting systems, incentive systems, reconciliation processes and the existing division of responsibilities
  • Implement sustainable working capital management by integrating it into the existing performance management system
  • Transformation and change are supported by customized training and coaching sessions

Our offer

A reduction of net working capital by up to 20 percent is possible in the short term? Yes! Based on more than 25 years of CTcon experience, a working capital reduction of about 20 to 40% is the typical ambition level in reference projects. With well-founded benchmarks, supporting tools as well as proven methods of analysis, we support our clients in quickly identifying and implementing the right levers and concrete fields of action to improve working capital.


Your contact person

Dr. Jens Jannasch
Principal | Düsseldorf | Germany
Get in touch
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