Working Capital Management

In an environment where the efficient management of cash is imperative, PMC is increasingly being asked to review and comment on the management of receivables. This process can result in a number of financial and operational benefits:

• the release of cash which is then available to cut debt levels or fund initiatives,
• improved debt covenants,
• more efficient and transparent processes generating cost savings,
• with a recessionary outlook, more efficient receivables management can become a priority as a defensive measure.

Changing the receivables process is a “whole company” issue that requires support at all management levels.

A two or three phase approach, depending on the available internal resources, is typically proposed for each client:

1. High level review:
   • Data collection and analysis,
   • Benchmarking and high level ‘cause analysis’,
   • Establish potential upside and next steps.
2. Detailed project:
   • Determine underlying causes of poor performance,
   • Establish definitions and reporting by business unit,
   • Assist management to deliver an achievable plan for improvements.
3. Interim or project management:
   • Work with management team and project manager,
   • Identify and actually deliver solutions.

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