• BDO's annual working capital study

    In recent years, the cost of cash has been relatively cheap and easily accessible to many. This has led to a lack of focus and other prioritised objectives for C-suite executives.

    Download the report
Article:

BDO's annual working capital study

09 March 2021

In recent years, the cost of cash has been relatively cheap and easily accessible to many. This has led to a lack of focus and other prioritised objectives for C-suite executives. Heading into the pandemic, balance sheets driven by working capital, had increased year on year. Whilst this varied on a sector and size of business basis, the overall trend was a deterioration in performance, driven particularly by increasing receivables and inventory positions.

The realms of cash

Since the pandemic, there has been much more of an awareness of the importance of cash. Those that had plentiful reserves have sought to hold onto them and those who had always found cash management challenging have had the need amplified. With the percentage of companies suggesting they have less than 3 months of cash reserves at c.32%, businesses no longer have the ability to ignore management of their cash and working capital position.

Understanding the effectiveness of working capital management

Whilst overall accountability typically sits with the Finance Director, working capital is influenced by many roles across an organisation so it’s important for awareness to be created across many functions and roles. With the phasing out of government support packages, it is vital that businesses seek to embed a cash culture from within. Whether for survival in a stress situation, or to support growth for a business in the maturity phase, cash should be an integral part of your businesses strategy.

Download our annual working capital survey for more insights on industry trends, what this means for business and our top 10 practical tips for embedding a cash culture.

Join our webinar

On the 29th April we will present some of the key findings from the study and importantly offer practical advice. It draws together voices from industry, funding solutions and advisory to offer key insights into balancing and optimising cash as we rethink our approach in a new reality.

REGISTER FOR OUR WEBINAR 

 

Our corporate advisory services team is experienced in supporting cash and working capital improvement programmes. We partner with our clients to assess cash release opportunities, develop action plans and embed a cash culture. Our work delivers sustained improvements, builds a strong cash position and improves profitability.

If you would like to discuss any aspect of the working capital and cash flow management in more detail please contact Richard AustinJenny Shutt or Ross McWhir who will be happy to help you.

You may also be interested in referring to our interactive key event timeline to guide the decisions you take. By understanding how each of these key events may affect your business, appropriate strategies can be put in place to navigate through any challenges and opportunities that these will present.