Working capital isn’t a spreadsheet problem. It’s a people and power struggle. Should treasury be involved?
Here’s the challenge: optimizing working capital requires changing how different parts of the business make decisions. But these decisions mostly sit outside treasury’s direct control.
Working Capital optimization always comes with trade-offs:
→ Do we extend supplier terms or do we go for price reductions?
→ Do we reduce inventory at the risk of higher logistics costs or at the risk not been able to deliver when the customer wants?
→ Do we push sales to invoice faster or improve the order-to-cash process?
Treasury plays a key role. Why?
→ It has visibility across the entire cycle (and sees the cash impact)
→ It focuses on optimizing for the whole to accelerate the cash generation
But Treasury can’t make the final call. We can frame choices clearly (thinking in terms of PnL, liquidity, and opportunity cost) and help the BUSINESS make intentional decisions.
Where to start and how to optimize?
𝗦𝗲𝘁 𝗢𝗡𝗘 𝗰𝗼𝗺𝗽𝗮𝗻𝘆-𝘄𝗶𝗱𝗲 𝗞𝗣𝗜. M𝘆 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹: 𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗮𝘀 𝗮 % 𝗼𝗳 𝗦𝗮𝗹𝗲𝘀.
What’s your approach to optimizing working capital?
