More than half (63%) of construction industry representatives say price renegotiation is the main measure to improve cash flow. In the services sector, players focus on both price renegotiation and payment deferral, while the consumer goods industry on price renegotiation and on the discount for tight payment deadlines, according to a survey conducted by Horvath&Partners.
57% of the respondents said liquidity was extremely important for the health of a company and 81% said companies have started to apply working capital management more often. The competitive edge and working capital availability over lending are the premises for structural optimization of the working capital.
The survey revealed that Romanians have started to delay payments to suppliers to approximately 208 days in case of telecom and drug companies, in order to compensate for the difficult receivables collection in 110 and 96 days respectively.
Moreover, 27% of the respondents cited receivable collection field as having the biggest working capital improvement potential. In the current economic conditions, around two thirds of the surveyed cited receivable tracking process, fixed lending limits and implementation of clear prior notification procedures as being the safest methods of receivable collection.
In Romanian companies, receivables are recovered within 78 days.
As for stock optimization, companies must focus on strategic measures to reduce the backlog of stocks and on detailed sale planning, consolidation of suppliers base and narrowing product range.
The survey was carried in partnership with Valoris on a sample of 300 companies in Romania.
Article comments "Builders turn to price renegotiation to improve working capital"
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