Cash Flow Management

Ineffective cash flow management can be debilitating for a business, with adverse consequences including inability to fund strategic investments, excessive interest payments that eat into profits, and higher capital costs due to high risk balance sheets. Recent research by The Hackett Group^® into cash flow management among top Global 1000 companies concluded that if all these firms were to adopt the best practices employed by the top performers, they could free up nearly $800 billion in cash flow, or about $800 million per company.

From the successes of cash flow management top performers a range of general principles and specific best practices can be inferred. For example, some general principles include:

• Commitment from top executives is crucial. Companies’ effectiveness in cash flow management correlates strongly with executive level prioritization of cash flow.
• It’s important to use rigorous cash flow management metrics to baseline your performance and track your progress.
• Strategic segmentation of customers, suppliers, and inventory is a key driver of cash flow optimization.
• Process automation is another key driver, particularly in its potential for building good cash flow management practices directly into routine transactions.
• There’s great potential for cash flow optimization in next-generation technologies that can increase your visibility into your supply chain process.

The Hackett Group can improve your cash flow management performance

As a leading global strategy consulting and operations consulting firm, The Hackett Group offers advisory and consulting services that can help you substantially improve your cash flow performance. Our working capital practice has more than 40 years of hands-on experience partnering with major global corporations to conduct comprehensive cash flow analysis and optimize working capital operations. Applying proven best practices, we have helped clients release billions of dollars of cash that was locked up in working capital.

Among the world leaders in process benchmarking, The Hackett Group can also work with you to baseline your current cash flow operations across a wide range of critical metrics, including cash conversion efficiency, days working capital, forecast accuracy, return on capital employed, and many more. Leveraging our renowned benchmarking database built on over 26,000 engagements with major companies worldwide, we can show you how your cash flow performance compares to peers and to top performers.

To learn more about The Hackett Group’s cash flow management solutions, as well as our solutions for other business needs such as supply chain optimization, HR metrics development and HR outsourcing, business cost management and more, contact us.