Value Creation Services: Cash & Working Capital Optimisation

The single-minded focus of Deloitte’s Value Creation Services team is to improve cash and enhance profits for our clients.

Global economic conditions have changed a lot in the first half of 2022 and indications are that volatility will continue. This may lead to an uptick in under-performance and distress.

Our global Value Creation Services network is experienced and perfectly placed to support clients in taking action to optimise cash and tightly monitor cash flows.

The VCS combination of data-driven insights and operational and practical implementation will be of real benefit for your business at this time.

Private Equity

Limited Partners (LPs) are finding debt markets and M&A are slowed. The poor environment on inflation, interest rates and continuing supply chain disruption are compounding issues for PE and their portfolios. Our global team, with world-wide expertise on these priority topics, are helping clients focus on cash.

Our IP-rich, data driven and practical approaches are proven. We can help you too.

The ongoing story

Inflation and interest rates

Inflation has ramped to 10% or more in many western markets, and central banks are responding with hikes in interest rates – North American and European markets are all making the largest interest rate increases in many years.

Pressure on working capital

Combined with the ongoing fall-out from supply chain disruptions in China and elsewhere - with up to a fifth of container ships stuck outside ports in the last months - the situation for our clients has changed. PE and corporate clients are seeing an increasing squeeze on profits and cash flows in particular, as safety stocks are increased and the rising cost of energy and raw materials inflate inventory costs.

Increases in interest rates and debt market concerns are raising costs of financing that working capital, and any potential deterioration in payment behaviour by customers will exacerbate the situation.

Beyond cash

For many clients, once the immediate cash pressures have been alleviated, there should be opportunities to expand into broader forecasting and treasury or hedging topics. This can embed and support the ongoing control of working capital and allow clients to focus on profit improvement measures.

How we engage

Cash scan: 1-2 weeks | Identifying cash improvement opportunities at speed | Limited management time required | Data first | Opportunity Validation

Cash deep-dive: 3-6 weeks | Developing a bottom-up cash plan | Refined, actionable opportunities | Company dashboards | Overlaid forecasts

Selected deliverables

13 week rolling CFF model
Operational Dashboards
Prioritised initiatives
CFF assessment report
Working capital benchmark
Cash and working capital maturity assessment
Cash management operating model benchmark
Reporting cycle and process