Working with stakeholders to optimise cash despite trading uncertainty

With different internal stakeholders focused on the objectives of their own silos, how can you get everyone to agree on a shared vision for cash management?

And How could technology give you the insights to optimise your cash position?

As a finance professional in a manufacturing or producing business, practically every department – from Operations to Procurement, Production and Engineering – relies on you to keep money moving through the business. So, you appreciate the need for a solid system for ensuring sufficient cash flow. But how can you make your cash management strategies even more effective than they already are? And how do you keep everyone happy?

I work with our CFO on capital planning and management purposes. I liaise with senior engineers in the business, who often have requests to access capital for investment purposes. I am always keen to help when the business case is clear.


We asked people at a number of manufacturing businesses to share their experiences of being advocates for good cash management within their organisations. We wanted to know how they work with partners internally to make sure their money works for them.

Could you do more to help internal stakeholders get on board with your cash flow plans?

Different stakeholders within your business have their own priorities. And they need cash to fund various objectives. As such, you could experience pressure from different departments that upsets your cash flow optimisation. For example, Procurement might want to shorten your days payments outstanding (DPO) to negotiate better terms with suppliers, but that means money leaves the business too fast. Similarly, Sales might want to extend days sales outstanding (DSO) to improve relationships with buyers. But that means money is too slow coming in.

So, it’s important to collaborate closely with internal partners. As a finance leader, you’re in a unique position to bring everyone together and agree on a shared vision for cash flow. It will help you to manage expectations. And you can make sure everyone is working towards the same goal.

Despite pressure from my HQ stakeholders, it’s difficult to standardise payment terms with our customers when we sell into so many different markets.


Of course, this can be easier said than done. The first step to creating a consensus on how to manage cash flow is to help your stakeholders understand your company’s true cash position. As the CFO of a mid-market clothing manufacturer tells us that in times of growth, one of the biggest risks is growing too fast. “Despite the desire from other senior stakeholders to pursue growth, we have to balance our stock commitments and supply chain capacity with demand. With visibility into the state of health of our supply chain’s finances, I’m in a better position to advise other company leaders on when it’s safe to push for growth.”

Indeed, as global trading conditions become even more uncertain, and as businesses everywhere deal with the impact of the COVID-19 pandemic, you’ll find that your role within your organisation is changing. Where other parts of the business have responsibility over just one part of the overall supply chain, you have a more overarching view of the whole system. This gives you a unique perspective, enabling you to analyse business and working capital metrics. Then you can manage cash accordingly, ensuring different teams have the resources they need.

Are you doing enough to improve visibility into your cash position?

As a global manufacturing business, with operations all around the world, it can be easy to underestimate how much cash is trapped on your balance sheets. If you’re operating in a fast-paced, globally dispersed trading environment, as a minimum you’re likely to have multiple bank accounts across different countries, all dealing in different currencies. As such, it can be challenging to maintain good visibility over your entire organisation’s finances.

We’re a global organisation, so pooling of cash and overall visibility is critical. All pooling of cash is virtual – we have pound and dollar accounts in the UK, and our US focused business is done in dollar accounts.


As a financial professional, your team is the most logical one to own the management and delivery of your company’s working finance strategy. But that’s not always apparent to other parts of the business. Many of your internal stakeholders could think of you simply as the team that manages transactions and financial reporting. They might not recognise your ability to influence the different business flows that contribute to good working capital. As the same finance director puts it: “The key thing to us was visibility of the accounts: where is the cash, how can we move it around if we need to? We need to fully utilise everything to improve our shareholder return.”

By investing in technology like the Internet of Things (IoT), Artificial Intelligence (AI) and blockchain, you can automate and streamline many of your finance processes. Or even develop new processes. This gives you greater visibility into your overall financial position and makes it easier to unlock more working capital.

Is it time to update your cash management platforms and processes?

Outdated processes or cultural issues within the business could be causing you problems. For example, if you’re not able to keep accurate track of what’s owed to you, or if Sales has negotiated preferential terms with select buyers, you could face slow paying customers. And that means money won’t be coming into the business quickly enough.

Slow or inefficient accounting methods can affect your working capital by extending your DSO. By reviewing your billing processes, you might uncover errors that are leading to delayed payments. You could also look to further automate your invoice generation and late payment chasing. Streamlining more procedures to remove time-consuming back office tasks gives you more time to focus on other jobs.

We have removed paper from our sales and service process. This increases our pace… It also reduces operational risk through minimising errors.

Finance and Purchasing Manager, logistics equipment manufacturer

By taking another look at your digitisation and automation strategies, you can work towards a more holistic view of how your money flows across geographies, subsidiaries, sales and at every point in your supply chain. This means you get a near real-time view of your entire cash position, so you can allocate funds where and when they’re most needed.

However, this kind of digital transformation can be tricky. As the global treasurer at a manufacturing company says, “We use a Treasury Management System (TMS) – we’re dealing with transitioning from Excel. When our operations were simpler, we could make one change in the spreadsheet and it updated OK. The problem is when people build on Excel as we have grown – year on year. Forecast sheet, deviations, template build on – it becomes a monster.”

But despite these challenges, getting it right can be the key to being more competitive. “The smallest error can make a difference to our results, so we run things tightly,” says the finance and purchasing manager at a logistics equipment manufacturer. “The improvements we have made in the use of technology have made a huge difference.”

Are you doing enough to streamline cash flow and unlock new opportunities?

By working more collaboratively with internal stakeholders, and breaking down silos to improve all aspects of your business’ cash management, you can realise lots of financial benefits. With sufficient cash in the business, you can reduce the cost of trade transactions. You can decrease your inventory costs. And you can improve your margin – reducing the need for and cost of borrowing.

However, there are a few things to bear in mind. Are you able to get internal stakeholders on board with your plans for cash management? Do you have good visibility over your entire global finances? And could updating your systems and processes help you get more from your money?

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