Drive the working capital

WCR is indeed the biggest source of "cash" of the company when there is a strong commitment of the business managers to challenge processes which generate WCR.
The WCR is a real trap for cash which should be avoided through an efficient business organization.
Each decision has an impact on working capital requirement. The optimization of working capital requirement potentially concerns all sectors and all stakeholders of the company.
Thus, it is necessary to control it with:
- A detailed and accurate monitoring of its main components,
- An action plan dedicated to processes which contribute to the WCR.
WRC driving tool (download it herebelow)
It is appropriate to value each month or each quarter (with a preference for the monthly frequency):- Raw material inventory,
- Outstanding amounts of production,
- Finished products inventory,
- Accounts receivalbe including VAT,
- Accounts payable including VAT.

The WCR is assessed in value (quantitative aspect WCR) and number of days of sales (qualitative aspect). It must then be husked through a thorough audit to determine which internal business processes are generating WCR and to identify opportunities for improvement.
An action plan to optimize the processes involved (inventory management, purchasing, receivables management, billing ... etc.) is engaged. This plan will streamline the organization and the operating methods of the business, and will have results regarding the business’ cash and profitability.
Piloting monthly WCR reveals progress and helps to identify new priorities.
Next step : Improve the working capital →
Tools download:
WCR calculation tool based on a monthly basis in order to highlight where gains in WCR can be achieved.
WCR is piloted in days of sales for a better performance analysis.
WCR is piloted in days of sales for a better performance analysis.
Includes 4 management tools about working capital which allow to calculate the working capital requirement and to manage it:
- Normative WCR calculation,
- WCR calculation and management,
- DSO calculation,
- DPO calculation
Articles on the same topic
Subscribe
Not yet registered? The subscription allows downloading and unlimited use of all files of Credit Management tools.
Blog
All news about collection and credit management
How to calculate the Payment profiles of your customers?
My DSO Manager crosses the € 60 billion mark of receivables managed over 12 months
Evolution of My DSO Manager graphics!
Is the DSO a key performance indicator?
Why do these companies trust My DSO Manager to manage their cash collection?
Words of experts
Find the latest articles of collections and credit management specialists
How crisis show how people and companies are?
The credit management facing a shock wave
The payment profile, a major advantage for an efficient management of your Accounts Receivable
User reviews


Social networks
Find Credit Management tools on your favorite social networks
Comment this page