According to the Big Four consultancy, businesses are feeling the effects of an uncertain market with restructuring activity rising and risk of shocks remaining in the market. “Creating a cash-conscious culture is critical to ensure organisations can improve and accelerate their resilience to mitigate the impacts and flourish in the future,” it says.
“To achieve this, everyone in an organisation needs to be focused on cash. This is a collective responsibility from the boardroom and across the business – not just the finance team or treasury – to make decisions impacting cash.”
So, what are the top five things that businesses can do to optimise their cash culture, according to PwC?
Cash is bigger than the treasury and finance departments; they both have a key coordinating role in effectively managing cash, but it’s the operations of the business that are making daily decisions that impact cash. Push cash up everyone’s agenda.
Having a common language of cash across the organisation (operations and finance) is vital to instilling a proactive cash-conscious culture:
In both the medium and short term, this should involve both operations and finance teams. These are essential in reflecting and understanding the real operational risks that exist in the current volatile market.
This will help the wider business manage the daily decisions and cash commitments that they are making (once the decision is made, the cash is committed).
This will conserve and generate the cheapest form of cash available to you.
As PwC says, the underlying issues driven by current market headwinds continue to pose a challenge to businesses, with cash flow management remaining high on the agenda. “As more shocks are anticipated, improving cash flow management through this period is crucial.”
Philip Smith is editor of The Treasurer