Trade Finance
Published  5 MIN READ

The Democratisation of Data: Bringing Working Capital Full Circle

Working capital is often viewed by treasurers through a cash and liquidity lens. But this laser focus means that opportunities for efficiency can be slipping through the cracks. At a time of unprecedented uncertainty, cross-functional data dashboards and machine learning could help treasurers to break down barriers and unlock hidden working capital efficiencies across their organisation.

When members of the British Cycling Federation began taking their own pillows away with them on training camps, their performance improved. So much so that the team won eight gold medals at the London 2012 Olympics. This success was not all down to their sleeping paraphernalia, of course. It was part of their trainer’s new ‘marginal gains’ approach – the idea that if you break down everything that goes into riding a bike, and then improve each part by 1%, the cumulative result is a significant increase in performance.

This notion of looking at an entire process and identifying areas for continuous improvement translates equally well into the world of working capital. Too often, treasurers view working capital only through their own eyes – concentrating on cash and liquidity, while finance directors typically translate ‘working capital’ as ‘the financial supply chain’. This is understandable given the departmental siloes that still exist in most organisations, but this compartmentalised approach means many corporates do not have a firm handle on their end-to-end working capital management.