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20 mar 2020

Prepare for financial chal­lenges – improve liqui­dity through a Cash Race

Thoughts

In current times of economic uncertainties created by the widespread outbreak of the Coronavirus covid-19, many companies will face financial challenges in the near future. Facing these upcoming challenges – either caused by Coronavirus disruption or any other underlying cause – freeing up cash rapidly to secure access to capital and a good cash position will be key to minimize losses.

Now is the time to target specific initiatives that will reduce working capital requirements and put your company in a financial position to successfully weather this economic storm. A cash race is a number of focused efforts within a short period of time – mainly focused on quickly reducing working capital and improve cash flow as well as reviewing the cost-structure. Capacent has experience of supporting our customers during this journey where some of the key success factors are:

  • Management Support and prioritized initiative focus throughout the organization
  • Cross-functional team with mandate to execute activities
  • Secure high project pace to keep momentum

We present several concrete actions you can take to ensure the minimum of tied-up capital in each interface of your business.

  • Supplier interface: negotiate payment terms, cancel all non-essential purchases, review indirect purchases and negotiate
  • Inventory management: sell off excess inventory, ensure proper stock composition short-term, evaluate if reduced delivery precision is possible
  • Customer interface: review overdue to accelerate collection process, offer discounts in exchange for early payments, assign standard terms for smaller customers

Wan’t to know more? Get the full article!

Need help?

Many companies are seeing the effects of Coronavirus covid-19, and it seems that it will create great turbulence for a great part of businesses. In difficult times like this we can help by supporting our customers in these challenges, which are expected to affect many parts of the business, in the best possible way. Read more about our Business Recovery service here!