Solution Overview

Conserve cash to weather the COVID-19 storm

Build resilience with agile and efficient working capital management

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There is no arguing that cash is the lifeblood of a business. When times are tough, what separates resilient companies from others is superior working capital performance. Along with ensuring having enough cash for the short term, companies also must strategically manage their working capital to build resilience for the longer term.

The unexpected global health crisis has led to disrupted supply chains, inventory buildup, revenue loss, price fluctuations, and a weak stock market. In addition, customers continue to seek extended payment terms, and suppliers want early payments to fulfill their own cash needs.

All of which are significantly straining companies' cash reserves, as well as their ability to conserve enough liquidity to run their business operations.

Inability to manage cash and working capital well

According to our research, more than half of the senior finance executives of global firms say that improving cash flow is one of their top three priorities. But a lack of integration among enterprise functions because of functional silos is reducing transparency on cash performance and driving suboptimal working capital decisions.

For many, adopting digital technologies such as artificial intelligence (AI) and automation has been limited, leading to errors and rework. And poor visibility and analytical insights into working capital drivers are preventing them from better aligning the efforts of commercial and operational functions. Also, there is little awareness among firms of excess cash tied up in inventory and debtors.

With so many hurdles to overcome, companies need to prioritize rethinking their working capital management strategy to sustain operations and emerge stronger in a post-COVID world.

Read more about our working capital optimization solution

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Make every penny of working capital really work for you

Statistics show that globally, companies could release more than $1 trillion from balance sheets by optimally managing their working capital. Which means that freeing up this trapped cash can fund their short-term operational needs and even some of their longer-term strategic investments.

Genpact has the right solution to help you unlock cash that's tied up in your working capital. We deploy a cross-functional and holistic approach to identify, advise, and implement ways to improve your cash flow across receivables, payables, and inventory management processes. We bring in the right mix of our industry and functional expertise with data analytics, AI, and machine learning models to help you maximize your working capital performance.

Receivables optimization: Within order-to-cash, we can analyze internal and external data with AI, and help you reduce lost revenue and improve working capital by prioritizing customers that pay on time. We can help you automate invoicing and collections processes to minimize disputes and use analytics to refine your collections strategy to improve accounts receivables management.

Payables optimization: Within procure-to-pay, we can help you rationalize payment terms with suppliers, optimize supplier base and buying channels, reduce duplicate payments and ensure contract compliance. We can help you evaluate supply chain financing or invoice discounting options that can offer valuable opportunities by giving suppliers the choice to take early payment in exchange for a discount.

Inventory optimization: Within supply chain, we can help you manage inventory better and improve on-time orders, with more thorough sales planning, advanced demand-forecasting techniques, and order-backlog analysis. This will shorten your cash conversion cycle and strengthen your working capital position.

Cash-flow forecasting: We bring in driver-based cash-flow forecasting using AI and machine learning to enable forecasts in real time, support short-term investment needs, and boost longer-term business resilience. This gives you complete visibility and insights into the cash conversion cycle.

And with our Working Capital Analyzer, we provide you with interactive and accessible dashboard reporting about receivables, payables, and inventory – rich with insights and commentary. To make sure you're on track, the solution lets you monitor performance and see if your days sales outstanding (DSO), days payable outstanding (DPO) and days inventory outstanding (DIO), are in line with the best in the field. It uses intelligent automation, predictive analytics, AI, and machine learning and integrates easily with your system of records.

Boosting liquidity and delivering results that matter

We partnered with a spectrum of companies – across industries – to help them rethink working capital management and uncover trapped money.

  • A pharmaceutical firm improved its cash flow by $500 million with an analytics-driven efficient collections strategy and payment terms optimization.
  • A Europe-based frozen foods company reduced working capital requirement by over 20% with enhanced visibility on its cash conversion cycle across regions.
  • A leading US manufacturer streamlined credit, collections, and dispute management processes to drive 150% collections productivity growth, 90% faster dispute resolutions, and reduction in accounts receivables dilution risk.
  • A global high-tech distributor reduced DSO by six days and improve cash flow by $50 million by redesigning the disputes resolution process.
  • A global apparel manufacturer improved working capital through a 39% reduction in DSO by redesigning the collections and deductions processes.
  • A life sciences company optimized its B2B collections strategy and forecasted late payments with 95% accuracy at the time of order using a predictive model; this improved cash inflow between 23–31 million euro per year by notably reducing DSO.

Learn more about how Genpact can help with finance transformation.

Read more insights to support your business' response to COVID-19

Visit our Building resilience finance and accounting page

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