Manufacturing working capital DNA: opportunities for UK manufacturers

Access to finance is one of the most prominent challenges facing businesses in today’s rapidly changing markets. New regulations, constraints on banks and shrinking liquidity can often mean that traditional routes to finance are no longer an option.

CFOs need to release the finance they already have available to them. Specifically for manufacturing businesses, have you considered the state of your working capital management and embedded it into the DNA of your business?

RSM recently carried out a diagnostic analysis of a sample of manufacturing companies, which highlighted a number of interesting figures and opportunities. Amongst other things, we found that by simply matching the average performance of peers in terms of total working capital as a percentage of revenue, £106m or 6 per cent of total revenue could be released across a significant number of the companies.

The overall theme from our study showed that significant cash release opportunities exist for companies if they embed optimum working capital practices to match upper quartile or even median performance in the sector.

RSM are working with a number of businesses in the manufacturing sector to ensure that working capital is optimised and delivering real benefits for our clients.