Trade Finance
Published  9 MIN READ

Optimising Working Capital for the Whole Business

Treasury has become a key player in mitigating the pressures brought about by unrelenting global economic volatility. Here, Daniela Eder, Head of Payments & Cash Management Europe, and Karsten Becker, Head of Europe Product Management, Transaction Banking, Barclays Corporate Banking, dig deeper. They explore the impact of unsettled times on working capital management and reveal the role technology has in optimising outcomes for the whole business.

Record inflation, rapidly rising interest rates, decreasing revenues, and increasing bad debt are the stuff of nightmares for anyone charged with managing working capital. Without a crisp response to this tsunami of negatives, the ability of the rest of the business to make timely and appropriate decisions – around such fundamentals as price rises, supplier relationships, staffing levels or inventory control – can become extremely problematic. And thus it has.

To compound difficulties, the worst of the current wave has happened in a very short period, the recent turn of events escalating throughout 2022, and driving the onset of record levels of inflation, rapid interest rate rises, and a global fuel (and food) crisis created to large extent by Russia’s invasion of Ukraine.

With the extreme, and in many cases ongoing, challenges imposed by the Covid-19 pandemic, liquidity and working capital have demanded close and intelligent management throughout this period, says Eder. “It’s been about efficiency and cost control but also about keeping the business alive by staying digitally connected,” she notes.