Working capital remains a priority for Dutch corporations, but there’s much more to it than extending DPO, as we found out at a Rabobank-hosted lunch in Utrecht.
At the latest meeting of the Working Capital Forum, hosted by Rabobank at its headquarters in Utrecht, it was clear that fewer Dutch corporates than ever see pushing out DPO as a realistic option.
As one treasurer put it, “We have done an extensive programme to extend DPO and now there is not much more to gain.” Another took a similar view: “We are below industry average on payment terms, but do we want to extend? Maybe not – we want to be average, we don’t want to be outliers.”
The answer, for these treasurers, was to look at working capital in a more integrated way, employing a wider toolset that included options such as receivables securitisation or monetisation techniques. One of the ways the treasurers are achieving this is by inventory finance, focussing on goods and raw materials in warehouses and even in transit.
Elke Maas of Rabobank commented: “What’s unique about working capital is that every company has its own dynamics and requires a tailor-made solution. We aim to either develop our own solutions or co-operate with outside partners. It’s about identifying pain-points and working on solving those.”
The findings of the lunchtime discussion – including new data from Rabobank and PwC – are summarised in the Working Capital Forum white paper Full Spectrum Working Capital