The global financial crisis has made cash a major priority for most companies. But according to a new study from REL, a division of The Hackett Group, many still fail to take the key steps required to build a corporate culture that successfully focuses on cash.
REL's research, Blueprint for a Cash Culture, details the key steps companies can take to build a cash culture, and how prevalent they are in companies today. It details best practices in four key areas: organizational alignment and collaboration; executive leadership and sponsorship; measurement and accountability; and incentives and compensation.
The research found that most companies make cash flow optimization a priority. Of the more than 50 Global 1000 companies that participated in REL's study, nearly 95 percent said cash flow optimization was critical, and most have cash initiatives in place in three or more of the four key cash areas: receivables, payables, spend management, and inventory optimization.
"What we're offering companies here are some good basic guidelines for successfully improving working capital performance," says REL President Mark Tennant. "Clearly, a strategic plan is key, and it should truly incorporate multiple tools and focus on all four key facets of working capital: receivables, payables, spend management, and inventory. It's also critical that companies take an energetic approach to improving cash management. Finally, the commitment of the C-suite is at least as important as any particular steps taken."
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