In recent years, reducing Working Capital Requirements (WCR) has become one of the major objectives of listed companies or companies that have been bought out through an LBO. There are three areas of work to reduce Working Capital Requirements: reduce inventories, reduce the deadlines agreed with customers or those agreed with suppliers. For listed companies, the benefit lies in improving the presentation of the balance sheet by removing the customer receivables from it and by therefore taking action on customer deadlines. For companies under an LBO, it is about retaining financing conditions while complying with the ratios and covenants set by the bankers. Again, in order to achieve this, removing the customer receivables from the balance sheet is an extremely effective technique. The ideal set-up is to combine off-balance sheet credit insurance and off-balance sheet factoring.
Globalia Conseil is a broker specialised in reducing Working Capital Requirements through off-balance sheet credit insurance and off-balance sheet factoring.