Working capital management performance around the world is dire. E&Y concluded that the leading 2,000 US and European companies have still up to US$1.3 trillion of cash unnecessarily tied up in 2012 (2013 report not yet out), see. The results for companies' WC performance in 2012 showed diverging trends between the US and Europe, with cash-to-cash (C2C) increasing by 2% in the US from its level of 2011, while dropping by 4% in Europe over the same period. For the US, these headline results almost wiped out the gains achieved in the previous year. By contrast, Europe reported significantly improved working capital after a stable outcome the year before. 

Total WCM covers all areas of each business’s operations, see figure. It is the optimisation of the overall balance that really produces savings.

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Some of the key lessons and practices for improving working capital performance from CTMfile coverage in no particular order, include:

• set up a Working Capital Council to ensure that the wider impact cost-benefit of change(s) to WCM in one part of the group do not have a negative impact on other parts of the group, see
• make sure the Working Capital Council has senior management members to ensure that the really big decisions can be made, see
• set up incentive programmes for great working capital management performance, see
• keep a relentless pressure on improving working capital practices, don’t relax as the economy starts to grow, see 
• search for solutions that integrate your inventory management system, the direct link to the payment network provider and the order management system, see
• exploit all opportunities in the supply chain to improve working capital and financing, see
• make your account payables a revenue generator and supply chain supporter by using a holistic approach to accounts payable, see
• use a ‘glocal’ way of working to ensure that all working capital improvement opportunities are fully exploited world-wide, see
• get the whole company supporting the working capital management programme by using terms and objectives that everyone understands, see
• use solutions that extract all the detailed transaction data from your ERPs to understand the group’s Total WCM position, see.