The working capital monitor + screenshots


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Powerpoint presentation of the features and content of The Working Capital Monitor including screenshots of the different elements in working capital.

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The working capital monitor + screenshots

  1. 1. The Working Capital Monitor
  2. 2. Working Capital 3 Major Operational ProcessesBalance Sheet Stock €m (raw materials, WIP andFixed assets 1,355 finished goods) Days Inventory OutstandingCurrent assets +Stock 315Debtors 505 DebtorsCurrent liabilitiesCreditors (283) (money owed to us for Days Sales our products) Outstanding Customer discounts/bonus (47) ___ -Net current assets 537Other assets and liabilities (35) CreditorsCash 263 (money we owe for ourLoans (2,314) purchases) Days Payables ___ OutstandingReserves / net assets (194) ___ = Working capital requirement
  3. 3. Some Working Capital myths….Perception: Working Capital Reality: Working Capital ... is a finance issue  … is an operational issue ... is a balance sheet item  … impacts Income statement ... is improved only with systems  … is improved with new policies, implementation or strategic processes and metrics changes .. has a negative impact on  … improves Customer Service Customer Service (“collect early, (“pay, deliver, collect to what has push the products out and pay been negotiated”) late”…) .. generates little benefit  … can be improved 20-30% by process optimization
  4. 4. The Working Capital Mechanism Cash Conversion Cycle Cash Invoice Purchasing collection Purchase To Pay Order To Cash Invoicing Payments Sales Production Inventory
  5. 5. Working capital can be represented as a timeline Order Cash received received Forecast to Fulfill Order to Cash Process (FTF) Process (OTC) Goods held as stock or WIP Debtors CycleTime Creditors cycle Purchase to Pay Process (P2P) Cash Order Paid out placed Cash tied up As WCAP
  6. 6. Provider of working capital Order Cash received received Forecast to Fulfill Order to Cash Process (FTF) Process (OTC) Goods held as stock (DIO) Debtors CycleTime Creditors cycle Cash Purchase to Pay Process (P2P) Paid out Order placed Working Capital Provided
  7. 7. The Ackinas Working Capital Solutiono Daily monitoring solution for Working Capital and related ratioso Single or multiple entity related and back-office solution independento Automated extraction, transformation and integration of datao Enable different levels of aggregation • OU/BU, Country, Group • Customer and group level (Key accounts)o Reporting and alertingo KPI follow-up and action managemento Historical information tracking
  8. 8. Ackinas WCM Solutions Wider Cash & Credit Cash & Management Forecast to Credit More specific fulfill Management The Working Capital Solution box Order to Purchase to Cash Pay
  9. 9. Optimising receivables: more than just improving collections management Order to Cash Cycle Cash Manage Verify Manage Process Issue Collection & Customer Credit- Account Orders Invoices Dispute Contracts worthiness Receivable Management Minimise Process Increase Minimise bad Minimise Minimise Reduce cycle time Overdues and aim profitability debt levels unbilled AR balance credit notes • Credit rating and • Billing triggers • Market & customer risk • Order limits • Ownership • Electronic receipts evaluation procedures • Multiple formatsKey • Channels to market • Method of payment • Reporting • Auto -matching • Credit limits • Reducing mail lagdrivers • Pricing • Credit enhancement • Credit policy • Audit trail • Organisation • Invoice accuracy • Payment terms • Order Fulfilment • Unapplied cash • Identify root causes • Risk management • EDI • Master file data • Volume rebates • Surface and record • Resolve queries • Technology • e-Billing • Sales forecast • Financing • Payment discounts • Eliminate causes • Reporting • A/R posting
  10. 10. Accounts Payables is more than just paying laterPurchase to Pay Cycle Assess Choose Suppliers & Order Process/book Pay Supplier Negotiate Contracts Materials Invoices Invoices Performance Minimise Increase supplier MaximiseProcess Optimise timing Increase cycle time sourcing cost performance Accounts Payablesaim • Purchasing and • Invoicing timing • Purchasing policy • Dispute management approval controls • Responsibility • Multiple sourcing • Quality Management • Settlement • RFP/Tender process • Authority levelsKey drivers Assess vendor risk • • Auctions • Contract Mgt • Validation discounts • Risk ratings • Prioritise spend • Prioritise critical • e-procurement • Dispute resolution • Vendor reduction • Purchase order suppliers • Use of preferred • Input to systems • Pricing management • Method of payment suppliers and group • Consolidated invoices • Payment terms and control • Payment frequency frameworks • ePayables and • Settlement discount • Use of EDI • Rebates automation
  11. 11. Reductions in inventory require fine- tuning the entire end-to-end process Forecast to Fulfil Cycle Product Sales Receive Materials & Delivery and Production Planning Development Forecast Manage Inventory Customer ServiceProcess Accurate future sales Minimisation of Strategic customers Minimise stock held in Minimise cost baseaim driven forecasts stock holding prioritised distribution network • Picking & packing • Product range & • Stock planning • Part shipments • Supply and cost SKUs • Technology • Distribution network of inputs • Scheduling • Purchasing policy • Controls • Shipping regulationsKey • Supply of labour • Targets • Make or buy • Stock audit & • Proof of delivery & billing triggers • Demand drivers • Shift patternsdrivers • Market dynamics • Safety stock leakage • Product returns • Line utilisation & • Plant organisation • Returns • Maintenance plan options • Lead times change over • Inventory objectives • Excess stock • Response times • Product quality • Obsolescence • In-house or outsource • Minimal variation • Maintenance stock • Product quality • Forecast requirements • Billing accuracy
  12. 12. Multi Level Analysis Structure Group Key Account Country A Country B Account Account BU BU BU Customer/ Customer/ Supplier SupplierSite Site Site
  13. 13. Alertso On working capital levels/dayso On WC ratio levelso On CCC dayso On AR levels and debtor dayso On AP levels and creditor dayso On inventory levels and days
  14. 14. Simulationso Increase/decrease DSO/DIO/DPOo Increase/decrease Inventoryo Increase/decrease Receivables/payables and debtor/creditor dayso Any combinations
  15. 15. Advantage of Financial Reporting onWorking Capitalo Provide insight in day-to-day and year-to-date cash positionso Enable analysis of problem areas in the financial management.o Facilitate risk management.o Enable simulation of e.g. future cash positions.o Enable action management.o Enable alerts for e.g. lacking of segregation of duties.o Enable benchmarking across operational units, countries and industry groups.o Quantify money flow in the supply chaino Install early warning for overtrading (over-stretch the financial resources of the business).o …
  16. 16. AWaCS Architecture Collaboration Server and DB (SQL, Oracle) Ackinas Analysis, alerting & Simulations WCM Database Ackinas WC Transformation Database Data Extraction & Transformation Local Local Local Local Local Local Database Database Database Database Database Database
  17. 17. Working capital strategyPrioritization of efforts to tackle quick-wins firstHigh Forsee issues Reduce complexity (Pareto) Risk and compliance management A Customer & product Improve processes d to reduce possible issues Rationalise suppliers and profitability d customer policy e Realise process tuning on WCM d Performance managment and PDCA v a React faster Set process targets administrative and on issues l operational u Improve WC data: e better statistics and multi entityLow Time to realize added value > ½ Year Weeks / Months ½ Year
  18. 18. Screenshots
  19. 19. Dashboard
  20. 20. DSO trend analysis
  21. 21. Simulations cash conversion cycle
  22. 22. Stock value vs target
  23. 23. DPO trends
  24. 24. Working capital simulations vs bestperforming
  25. 25. ContactSteven Van der Taelensteven.vandertaelen@ackinas.comTel. +32 3 289 29 04Gsm. +32 486 57 10 45Ackinas bvbaPrins Boudewijnlaan 302550 KontichBelgium