Today's dynamic and volatile markets and higher financing costs are increasing the pressure on companies to manage their liquidity and cash flow more efficiently. This is seamlessly linked to the demand for more transparency in companies. The use of leading methods and modern technologies is becoming increasingly important in this context in order to create full transparency of cash flows and release unused capital from existing operational business processes - a more favourable option than borrowing.
Global expertise to increase liquidity for transformations
Our global network of cash experts will help you to establish the necessary transparency and free up capital through improved operational processes.
We support you in establishing a cash-oriented culture by optimising the processes in the central business cycles. This includes the procure-to-pay cycle, which extends from supplier selection to payment, the forecast-to-delivery cycle, which covers sales planning through to delivery, and the order-to-cash cycle, which extends from customer negotiation to receipt of payment. In particular, we look at the interaction between the CFO organisation and the areas of production, logistics, purchasing and sales.
With advanced analytical techniques, AI-powered technology and interactive visualisation, you can make informed decisions and sustainably increase your liquidity. Our cash flow improvement initiatives create sustainable value by embedding optimised cash and working capital management processes and tools into routine business operations.
This sustainable increase in liquidity enables you to optimise the use of existing resources and free up new funds for strategic changes.
Support in crisis situations
Our teams also offer support in dealing with immediate challenges and crisis situations relating to liquidity, such as the threat of a covenant breach or a decline in sales and earnings. We are at your side in these times and develop solutions to secure your liquidity.
Working capital in the area of conflict between financial due diligence and the purchase agreement
Guest article by KPMG experts Natalie Luong, Christian Müller and Dr Peter Müller in "Strategie - REPORT", 10/2024
Support in the transaction environment
In the transaction environment, we also regularly support both private equity investors and corporate clients in acquisition and disposal projects by assisting with value enhancement during the holding period and identifying and highlighting potential cash risks and opportunities during the transaction.
Regardless of the sector in which your company operates, our cash and working capital experts are at your disposal with their specialist expertise. As part of our global network, we can support you worldwide "from a single source".
Predictive Net Working Capital Management mit SAP Analytics Cloud
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Your contacts
Stephan Dellermann
Partner, Performance & Strategy, Head of Center of Excellence Cash & Working Capital Management
KPMG AG Wirtschaftsprüfungsgesellschaft
Sebastian Leidig
Director, Performance & Strategy, Center of Excellence Cash & Working Capital Management
KPMG AG Wirtschaftsprüfungsgesellschaft
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Working capital management as a lever for liquidity and enterprise value
Working capital management describes the active management of receivables, inventories and payables – in other words, current assets&, in order to free up liquidity in day-to-day operations and reduce capital tied up in the business. For management, the importance of working capital becomes particularly apparent when growth, financing costs, supply chain risks and investment requirements all simultaneously impact liquidity needs.Effective cash management combines short-term solvency with forward-looking management of net working capital. It is not enough simply to examine individual balance sheet items. Only the interplay of processes, data, responsibilities and key performance indicators reveals where working capital is tied up and which measures can realistically be implemented.
Working capital optimisation requires clear performance indicators
Robust working capital optimisation begins with transparency. This includes key performance indicators such as Days Sales Outstanding, Days Payables Outstanding, Days Inventory Outstanding and the Cash Conversion Cycle. These figures show how long capital remains tied up in current assets and operating working capital, and where payment terms, stock levels or receivables processes can be adjusted.
KPMG supports you not only in calculating these key performance indicators, but also in translating them into operational management. Data analysis, process assessments and benchmarking provide a robust picture of liquidity potential. This enables working capital measures to be prioritised, responsibilities to be defined and progress in liquidity management to be measured.
Cash management: the link between the finance function and operational business
Working capital management is not solely the responsibility of the treasury or finance department. Receivables management, inventory planning, purchasing terms, payment terms, delivery capacity and sales processes have a direct impact on liquidity, current assets and working capital. This is why a management framework is needed that CFO organisation, procurement, sales, production, logistics and information technology (IT).
KPMG regards cash management as a cross-functional management issue. We analyse which processes tie up liquidity, which data is missing for decision-making and what governance is required. This results in working capital solutions that work in day-to-day operations: from clear escalation mechanisms in receivables management, through analyses of stock levels and payment terms, to rolling cash flow forecasts for robust liquidity management.
From analysis to sustainable implementation
Many working capital improvement programmes fail to realise their full potential if they are viewed merely as one-off measures. Sustainable results are achieved when measures are integrated into reporting, target systems and decision-making processes. These include clear KPIs, regular management reviews and a consistent understanding of how liquidity, current assets and working capital are taken into account in operational decisions.
KPMG supports you from the potential analysis right through to implementation. This includes identifying liquidity drivers, developing a target framework, deriving concrete measures and embedding them in processes, systems and the organisation. Modern data models and visualisations help to make progress transparent and enable fact-based decision-making. This draws on experience from Operational Performance, Cross-functional Value Creation and Performance & Strategy.
What sets us apart
KPMG combines financial, operational and technological expertise in the Centre of Excellence for Cash & Working Capital Management. Our experts bring experience from performance programmes, transformations, restructuring situations and transaction environments. This enables us to combine short-term liquidity effects with long-term control in liquidity management.
Whether it’s increasing liquidity, a working capital programme, cash flow forecasting or operational process optimisation: We support you in identifying tied-up working capital, managing current assets more effectively and implementing effective measures. Ready to discuss this further? Please contact us.
Frequently asked questions
Working capital management refers to the management of receivables, inventories, payables and current assets. The aim is to use working capital more efficiently, reduce capital tied up in the business and make operational processes more cash-oriented.
Cash management helps businesses improve their solvency, liquidity planning and cash flow management. Effective liquidity management can reduce the need for external financing and make better use of internal liquidity.
Key performance indicators include Days Sales Outstanding, Days Payables Outstanding, Days Inventory Outstanding and the Cash Conversion Cycle. They show how long working capital is tied up within the company and where there is potential for optimisation in current assets.
Sustainable working capital optimisation combines data analysis, process improvement, clear responsibilities and regular management reporting. It is crucial to embed measures permanently into operational processes, target systems and liquidity management.
KPMG provides support in analysing liquidity potential, developing measures, implementing them in business processes and introducing suitable control tools. This involves the finance function, procurement, sales, logistics, production and IT.