Managing Working Capital

The credit crunch has forced financial professionals into unfamiliar territory. Roughly one third of large companies recently polled indicate that limited short-term credit availability has reduced capital spending, frozen or reduced hiring, necessitated layoffs, and forced cutbacks in inventory. In this environment, companies that are able to control working capital at an optimal level enable their organizations to survive and gain market share. Working capital management can act as a hedge against negative forces such as reduced access to capital and is critical in achieving operational excellence.

During economic downturns and when organizations are faced with unpredictable pressures, the ability to forecast cash flow, accounts receivable and inventory can be extremely difficult. Management needs to begin by reassessing the organization's working capital sources and needs, and then ask the following questions:

  • Do we have the expertise required to assess our current situation?
  • What are the optimal working capital levels?
  • How should it be financed?
  • Does the organization have the proper disciplines to manage the business thereafter?
  • What are the implications if we get it wrong?

MainStream can help your organization evaluate and identify opportunities that exist throughout your business. We know that even when you make a small change in working capital days it can have a significant impact on available cash.

Call MainStream today and let our professionals show you how much additional cash would be available to your company and demonstrate the net impact to your bottom line.