Optimizing working capital, or balancing the ratio of cash on hand to liabilities, is a complicated process, and organizations are often confused on when, why, and how to go about the process. The end goal of working capital optimization is to improve the buyer’s cash conversion cycle and cash flow efficiency without hurting suppliers’ own cash flow needs. However, the journey is riddled with varying working capital terminology and methods, complicated financial restructuring requirements, and perceived risks of disrupting supplier relationships and supply chain efficiency.
A successful working capital tool will support the cash flow needs of both buyer and supplier, and will improve the supply chain health of both parties. PayStream Advisors’ AP & Working Capital Report clears up some of the confusion around working capital optimization and shows organizations how to identify the right working capital tools and strategies.
Research Senior Manager
Offering unbiased, industry-leading, educational content.