Companies seeing £60bn tied up
The study highlights the fact that working capital, the amount of money a company requires to fund its day-to-day operations, is unnecessarily being tied up in a large number of simple transactions. Deloitte's Global Review of Working Capital analysed data from more than 20,000 companies from across the world over a five-year period.
Unproductive working capital was found to be tied up in basic accounting cycles, such as the manner in which accounts receivables and payable processes are being handled. Inventory and supply chain management were also highlighted as key factors behind poor working capital management.
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Hide AdSimon Adcock, head of Deloitte's corporate advisory team for the regions, said: "It is clear that cash and its effective use will continue to be high on the agenda. While some companies have built up cash reserves, many others require additional cash to help them fund growth and, importantly, to pay down debt."