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Working Capital Management (WCM)
Working capital management encompasses cash as well as other key current items on a company's balance sheet—short-term investments, receivables, inventory, payables, and short-term borrowing. The "art" of managing working capital is the ability to effectively link these elements.
Over the past decade or so, aspects of working capital have merged into the treasury function at many organizations as the boundaries between various financial responsibilities have been disappearing. For example, treasury management has involved more than just managing cash for some time.
To handle this broader vision of their jobs, many treasury managers start with thorough reviews of practices and systems. Such reviews are useful in documenting the current situation and in identifying areas that need attention, such as redefining work flows or considering newer technologies to improve current systems.
Because it is difficult for many treasury managers to do these reviews by themselves, short-term, expert help can be useful here. TIS has assisted companies by conducting focused reviews of their working capital activities and has helped to implement changes that increase the efficiency and effectiveness of working capital responsibilities.
Working capital management projects
One type of review, often referred to as a treasury audit, is a review of systems and procedures for an organization's major treasury activities. It looks at what is being done now; it does not explore what could be done. Treasury audits also can be effective ways of assessing how well treasury systems and practices are working as part of conforming to Sarbanes-Oxley requirements.
In addition to treasury audits, TIS offers best practices consulting. These engagements can be very specialized, or they can cut across many functions. We have helped clients assess cash forecasting needs, determine which treasury system applications to implement, and how to benchmark individual treasury activities with other comparable organizations. Our expert eyes can spot problems and inefficiencies quickly, and there will often be easy fixes we can recommend.
Finally, we offer coaching help to treasury managers. This can be before or even during negotiations with service providers or for support in resolving service operational problems. Sometimes, treasury managers can use outside assistance to help them frame an issue or to prepare for making a major financial proposal to senior management. We draw on our own backgrounds as well as our experiences with organizations of all sizes across the country to give our clients the preparation and the knowledge base that will enable them reach a successful outcome.
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