ACCELERATING THE CASH CONVERSION CYCLE
Effective liquidity and working capital management covers three components:
Designing adequate cash flow forecasts is a company-specific assignment. Maravon helps Treasurers design and implement cash flow forecast concepts that reflect the company's specific exposure to volumetric uncertainties in determining the funding for working capital, pension claims, seasonal needs, cyclical needs and growth. Our support covers the design of forecast reports, the selection of reporting tools, the methodology for liquidity analysis, the technical implementation and the organisational anchoring.
Modern cash pooling solutions facilitate companies of account balances centrally without physically moving funds out of operating accounts, thus achieving a virtual liquidity centralisation, even across multiple subsidiaries and various jurisdictions. Cash sweeping solutions improve overall liquidity by physically centralising negative and positive balances on a daily basis into one single account position into which surpluses are transferred and from which overdrafts are funded. This helps reduce interest charges. Both, physical cash pooling and cash sweeping solutions are offered by commercial banks. However, their offerings vary tremendously in terms of functionality, regional coverage, process-integration and technology. We assist our clients in selecting the most adequate cash management solution and help them integrate it for increased short-term capital effectiveness.
Supply chain and vendor finance programmes are able to significantly reduce buyers’ and suppliers’ working capital requirements, hence improve financial ratios such as Return on Net Assets (RONA) or Return on Capital (ROC). However, this result cannot be achieved with all programmes, offered by banks and other independent providers. Maravon supports Treasurers in selecting adequate supply chain and vendor finance programmes and helps align Treasury management processes efficiently toward the selected solution.
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