• Posted on: May 15, 2012 by: CashPerform

    In the past year there has been a complete change in the corporate world with regard to how WCO is being used by treasuries.

    Two developments are driving the shift. First, there is a distinct lack of good investment opportunities as a result of the continuing Eurozone crisis. This has resulted in corporates hoarding record amounts of cash. In late March corporate cash holdings in Europe were estimated to be an enormous €2 trillion. Secondly, the very same corporates are finding their supply chains are running into trouble as small businesses – ie their suppliers – struggle to keep out of the red.

    What results is a “trade-off,”. On the one hand, corporates are saving for the proverbial rainy day. But on the other, there are companies that realise that the extra cash can be used to bolster their supply chains.

    Often confused with simply releasing trapped cash, working capital optimisation relates to the art of establishing and maintaining an effective supply chain for the business. (more…)