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Working Capital Catalyst: Three Steps to Unlock Immediate Value

Cash has always been the lifeblood of successful businesses — whether publicly traded companies or private equity-backed enterprises. For today’s chief financial officers (“CFOs”), cash is more than a metric, it’s a strategic lever. Amid persistent inflation, elevated interest rates and supply chain disruption, liquidity has become both a shield and a growth engine. Yet, for many organizations, large amounts of working capital remain trapped in inefficient processes, inventory, nonstandard terms and delayed collections.

The challenge is no longer identifying where cash is tied up — it’s how to unlock it quickly and sustainably. Traditional transformation programs, though effective in the long term, often move too slowly to meet near-term liquidity needs. CFOs require a faster, data-driven approach that delivers measurable impact in weeks, not quarters — while laying the groundwork for lasting cash culture.

A Faster Path to Value

To address this growing urgency, FTI Consulting developed the Working Capital Catalyst — an approach designed to accelerate liquidity and embed lasting working capital discipline in an organization. Built around rapid execution and sustainable enablement, it can help organizations unlock trapped cash within weeks, while strengthening the processes, policies and governance needed for long-term resilience.

A Proven Framework for Working Capital Acceleration

The Working Capital Catalyst follows a clear, three-phase path that meets CFOs where they are — driving immediate impact, embedding operational efficiency and establishing governance that endures.

Client Challenge	Catalyst Response
We need to free up cash now.	Step 1: Cash Sprint works to deliver measurable results within four weeks by targeting immediate improvements across receivables, payables and inventory.
We can’t sustain improvements; issues keep resurfacing.	Step 2: Sustainable Improvement embeds governance, process accountability and data visibility to help drive consistent results.
We need long-term control and forecasting precision.	Step 3: Cash Governance transfers capability to internal teams, enabling continuous monitoring and supporting improvement across the cash conversion cycle.

Step 1: Cash Sprint — Immediate Cash Release

In today’s market, organizations can’t afford to wait for incremental improvements. The Cash Sprint phase focuses on unlocking immediate liquidity by diagnosing critical working capital bottlenecks and executing targeted interventions within four weeks.

Common challenges we encounter include:

Receivables (“DSO”): invoicing delays, pricing mismatches, customer holds and missing purchase orders.
Payables (“DPO”): nonstandard payment terms, missed early payment discounts and reconciliation delays.
Inventory (“DIO”): excess stock, poor demand segmentation, long supplier lead times and inaccurate forecasting.

By addressing these friction points with precision, companies can potentially free up 10–20% of trapped cash — creating self-funded capacity for reinvestment in growth, technology or debt reduction.

Below is a list of typical issues across DSO, DPO and DIO that we address in our Cash Sprint phase:

DSO	DPO	DIO
Nonstandard Terms	Nonstandard Payment Terms	Excess/Obsolete Inventory
Pricing Mismatch	Inability to Take Advantage of Early Payments	Inaccurate Forecasts
Customer Holds/Credit Limit Management	2/3-Way Match Issues	Ineffective Safety Stock Policies
Missing POs	Missing POs	Long Supplier Lead Times
Proof of Delivery Missing	Missing Funds to Pay Invoices	Missing/Delayed POs
Invoicing Delays/Unbilled Balances	Invoice Reconciliation Delays	Receiving Errors/Put-Away Delays
Customer Portal Issues	Supplier Portal Issues	Inventory Counting/Accuracy Issues
Unidentified Disputes	Inadequate Delegation of Authority	Inefficient Replenishment
Unresolved Disputes	Unresolved Invoicing Disputes	Warehouse Congestion/Space Limits
Customer Master Issues	Master Data Issues	Poor Demand Segmentation
Ineffective Customer Touch	Goods/Services Receiving Issues	Returns/Reverse Logistics Delays
Order/Data Discrepancies	Invoice Reconciliation Issues	Inadequate SKU Rationalization

Step 2: Sustainable Improvement — Process Excellence and Embedded Efficiency

Once liquidity is released, the focus shifts to building resilience. This stage deploys “targeted” long-term sustainable improvements across processes, systems, organization structure/roles and responsibilities and reporting mechanisms to help ensure that improvements don’t fade over time.

Our teams help clients integrate working capital key performance indicators into management dashboards, align incentives to cash outcomes and formalize cross-functional governance. The result: a drive to sustained improvement and an organization-wide “cash culture” where every decision considers liquidity impact.

Step 3: Cash Governance – Governance and Accountability

The final stage enables the organization to independently drive performance improvement. Through organization-wide responsibility of cash ownership, data analytics, automation and predictive insights, clients can gain visibility across their entire cash conversion cycle — turning working capital into a continuous source of strategic advantage.

Over one to three quarters, our clients often see a compounding effect: early wins fund long-term investments, structural changes stabilize cash performance and analytics unlock predictive control over liquidity.

Impact in Action

Across recent engagements, leading organizations treat liquidity not just as a balance-sheet exercise but as a catalyst for transformation, achieving the most durable results. Through the Working Capital Catalyst approach, companies are converting trapped cash into strategic fuel to fund modernization, strengthen resilience and create momentum for sustained performance.

Global Manufacturer: Freed $160 million in cash by optimizing vendor payment terms with over 5,000 suppliers — creating self-funded capital for digital modernization.
Consumer Goods Company: Reduced $1.4 billion in inventory through SKU rationalization, maintaining on-time delivery while improving profitability.
Industrial Services Firm: Improved collections efficiency from 80% to 95% by establishing cross-functional DSO governance and embedding cash metrics into daily management routines.
Technology Company: Released $130 million (18% of accounts receivable) through the Working Capital Catalyst approach, accelerating liquidity and reducing DSO without increasing customer friction.

Each outcome demonstrates that working capital excellence is not a finance project — it’s an enterprise enabler.

Why It Matters

In volatile markets, the ability to unlock and redeploy cash quickly defines the difference between defensive survival and strategic growth. Companies that build a culture of working capital excellence not only reduce their dependence on external financing but can also strengthen investor confidence, improve valuation and create optionality for innovation and expansion.

Working capital excellence delivers measurable results that resonate from the boardroom to the balance sheet — empowering CFOs to drive transformation, resilience and value creation.

For more information or to discuss your potential to unlock immediate value in your organization, please contact our professionals.