"Cash has been a priority and has been on the agenda for a lot of companies for the last couple of years. We are quite happy with the improvements that we have driven, so let’s talk about something else.
I still think there’s an opportunity to take another 20% out of their working capital. As companies start to grow, so their cash consumption starts to increase quite dramatically, and actually now’s the time when companies potentially get into a difficult situation.
When they’re growing, they’re consuming more cash and at the same time they’re reducing their focus on cash.
Do they feel comfortable that the changes that they’ve made, and the benefit they’ve delivered, are actually going to be sustainable? Have they just used the squeeze and stretch mentality, trying to push out payment terms with suppliers?
And, obviously, the more of that investment they can fund internally, the less debt they’re going to have to try and raise.
Embed the cash into the business and make cash part of decision making, a very big investment plan. Get Buyers thinking about cash … retailers thinking about cash … managing stock … challenge the operations a bit more. Looking potentially at the customer offer and saying “OK, how does the customer offer translate into cash?”.
It applies to all sizes of clients. It’s not just big clients that get benefits out of this, it’s small clients as well, and possibly smallclients more."
Andrew Ashby
Partner
+44 20 76943231
