Survey results
In today's competitive business landscape, organizations strive to identify working capital improvement opportunities and unlock cash within their operations. We conducted a poll to gauge industry sentiments on various themes related to working capital strategies and the utilization of receivables financing.
Survey results
In today's competitive business landscape, organizations strive to identify working capital improvement opportunities and unlock cash within their operations. We conducted a poll to gauge industry sentiments on various themes related to working capital strategies and the utilization of receivables financing.
Efficiently identifying improvement opportunities and potential cash releases:
75% of interviewees believe their organization is moderately efficient at identifying improvement opportunities, as well as the potential to release cash to fund growth and profitability.
At the extremes, 12.5% rated their performance highly, while conversely, 12.5% rated their organization much lower, indicating room for improvement in their organization's practices.
Organisation is moderately efficient
Organisation is highly efficient
Organisation is moderately efficient
By understanding essential metrics like Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO) your organization can identify improvement opportunities to enhance cash flow and strengthen growth and profitability. Additionally, by accessing the cash tied up in receivables, your organization can enhance liquidity rapidly.
Importance of unlocking cash tied up in receivables for working capital strategies:
Most respondents (78%) rated their working capital strategy highly, indicating a strong emphasis on unlocking cash tied up in receivables for their working capital strategy. Overall, unlocking cash tied up in receivables is considered important.
Ways in which this process can be refined include encouraging the adoption of strategies and processes that expedite receivables collection, such as providing trading partners with flexible access to new lines of finance, invoice factoring, and offering early payment incentives.
Utilization of receivables to strengthen the supply chain:
Only 25% agree that their organization is utilizing receivables to strengthen their supply chain relationships between trading partners. The majority of respondents (37.5%) suggest that their organizations are somewhat using receivables for this purpose. However, 37.5% of interviewees provided much lower ratings, indicating little to no utilization of receivables for supply chain strengthening.
Utilizing receivables
Moderate utilization
Little to no utilization
Encourage your organization to explore the potential of leveraging receivables to strengthen the supply chain between trading partners. This could involve establishing partnerships or programs that offer financing options to suppliers, implementing supplier relationship management strategies, or exploring innovative approaches like supply chain finance.
Accessing multiple funders via a single automated connection to fund receivables:
of interviewees expressed positive sentiments that access to multiple funders via a single automated connection would improve their ability to fund receivables. The results demonstrate favorability to accessing multiple funders, although a portion of participants expressed skepticism.
Consider exploring platforms or technologies that facilitate automated connections with multiple funders, as this can streamline funding processes and reduce delays.
Utilizing third-party funding for working capital acceleration of payments to suppliers:
Doesn't utilized third-party funding
Utilized third-party funding
Utilizing third-party funding for working capital acceleration of payments to suppliers:
Doesn't utilized third-party funding
Utilized third-party funding
Most respondents (63%) indicated that they do not make use of third-party funding for this purpose, while only 25% responded in the affirmative.
Organizations that haven't explored this option should consider the potential benefits it can offer, such as improved cash flow and the ability to meet supplier payment obligations promptly; evaluate different third-party funding options available in the market and assess their suitability based on your organization's specific needs and circumstances.
Focus on improving Days Sales Outstanding (DSO) and working capital:
of interviewees agree that improving 'Days Sales Outstanding' (DSO) and working capital is a major focus for their organization in 2023.
Organizations can capitalize on this alignment by implementing targeted initiatives to optimize DSO and working capital management. This may involve reviewing credit and collection policies, streamlining invoicing processes, adopting technology solutions for efficient cash flow management, and fostering collaboration between finance, sales, and operational teams to drive improvements.
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