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CFOZone Experts

Opinions and views from expert CFOZone members.

Tag >> working capital
Sep 15

CFOs want quick ROI on IT spend

Posted by dbedell in working capitalSAPreturn on investmentinnovationdays' sales outstandingCIOschief financial officerCFOCashbiztechAT Kearney


CFOs and CIOs have very different priorities when it comes to IT spend, and that dichotomy is not likely to change any time soon, even as IT budgets are starting to once again increase.

After being slashed to almost nil during the height of the crisis for many corporations across sector and size, IT budgets are beginning to rise.

Sep 03

Transaction banks need better process integration

Posted by dbedell in working capitaltransaction banktrade financetradesupply chain financesupply chaincash flow forecastingcash flowCash


The biggest transaction banks are on their way to providing fully integrated working capital solutions, but they still have some ways to go—particularly in terms of systems and processes integration.

Even before the crisis, companies recognized the importance of integrating trade, the supply chain, and cash management to have a holistic view on working capital across the organization.

May 21

Balancing power in bank relationships

Posted by dbedell in working capitalshare of walletcash managementCashbiztechbank relationship management


To follow on from last Thursday’s blog, in order to get, and keep, bargaining power when it comes time for annual banking relationship reviews, companies need to take advantage of the wealth of information that is available to them from their banking and treasury systems.

Often, corporate treasuries will agree to provide a certain percentage of ancillary business to a particular banking partner, but may not have any set guidelines in place for tracking that. This leaves it in the hands of the bank to say whether they are satisfied with the business they received and to use their data for backing evidence.

May 13

Bank relationship management critical for CFOs

Posted by dbedell in working capitalshare of walletliquiditycash managementCashbank relationship management


Before the financial crisis large corporates held much of the power in their banking relationships. Banks in a company’s liquidity group were happy to get ancillary business and many of the largest companies could dictate terms.

But then the crisis hit. Liquidity dried up - those banks that were still in existence started either reducing their participation or pulling out of credit facilities altogether when they came up for renewal. Many companies suddenly found their banking partners demanding more – a lot more – side business in order to provide liquidity. Suddenly, bank relationship management became a prime function of the CFO.

Apr 27

The new look of receivables financing

Posted by dbedell in working capitalsupply chain financereceivables financecash managementCash


In addition to the buyer-driven supply chain finance models we discussed on Friday  – where a company sets up a program to help its suppliers finance their receivables - another big growth area is on the other side of the working capital spectrum – supplier-driven receivables financing. This is where companies look to finance their own receivables to increase available working capital and reduce days sales outstanding (DSO).

In this situation it is not the buyer who sets up a program, but the supplier who goes out to their banks or other financial institutions to initiate a receivables purchase program. From an FI perspective, receivables are generally ring-fenced, creating an asset-backed transaction where the company sells its receivables to a special purpose entity that sells the rights to future flows from those assets to the FI or investor. This disintermediates the buyer from the equation – it allows the supplier to sell receivables from its various buyers without the need for a specific financing agreement with each buyer and interaction with each buyer’s bank.

Dec 04

Time Warner gets serious about reducing its payables

Posted by Ron F in working capitalcost reductionCashCapital

Ron F

How desperate is Time Warner for cash? Desperate enough to charge its freelancers a fee to get paid on time, based on a sliding scale. In other words, Time is indeed Money at Time. 

Gawker likens the practice to that of a payday loan service. And it definitely does have that loan shark quality to it, though we use the word "quality" loosely.

Sep 04

Recession gets businesses back to Finance 101

Posted by MQuinn in working capitalprivate equityfinancingdebtcost cutting


Yesterday John Goff revealed the secrets of working capital to you. And I'm sure you were shocked to find that the best way to keep cash on hand is to speed up when you collect your accounts receivables and push back when you make good on your payables.

It's simple and effective. If you can pull it off.

Certainly we saw much-improved corporate earnings in the second quarter-at least among non-financials-even in the face of falling revenues. How the heck did companies pull that off? They cut expenses. Amazing.

Same goes for companies faced with high costs of capital after the credit markets shutdown. Got looming debt maturities? Extend them!

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