Companies' efforts to improve their working capital seem to be lagging.
NACHA's recent decision to provide same-day settlement of ACH transactions should be a plus going forward for working capital at companies that use ACH to make payments or that receive a lot of consumer payments via ACH. However, a couple of recent surveys suggest that over the past year companies made little headway in freeing up more of their cash through receivables, payables, or inventory.
Consulting company REL's annual benchmarking of working capital at 1,000 large corporations showed there was no change last year in the average organization's cash conversion cycle, a measure of the time it takes a company to recoup the money it spends producing goods by collecting from its customers.
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Susan Kelly
Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.
