BusinessCompany NewsPwC says managing working capital is vital

PwC says managing working capital is vital

Companies can ensure they are financially healthy by managing their working capital more effectively, says PricewaterhouseCoopers.

Link: PwC joins calls for transparency

The firms’ business recovery service has told companies to focus on three key areas of working capital which, it says, can improve their economic outlook.

Companies are advised to ensure a more robust analysis of their inventory, to reveal ‘sludge’ stock, which should be sold off where possible or scrapped.

They should also improve their handling of receivables, ensuring they do not neglect invoicing and debt collection.

Thirdly a company should not fall into the trap of delaying payment of bills as this results in interest payable on late payment and the potential loss of settlement discounts.

The firm advises companies to follow best practice ‘good housekeeping’ across the business, to break down the supply chain into key components and considering each carefully, to set targets for keeping inventory and to consider the benefits of outsourcing.

Bob Ward, partner at PwC’s business regeneration arm commented: ‘Improving working capital management is essential for all companies. It is not just about focusing on working capital when times are tough. Rigorous and effective working capital management makes good business sense whatever the financial health of your company.’

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor