11 June 2018

Optimise your working capital

Monthly Economic Update

ING Working Capital Management

There is more liquidity in your company than you think. Furthermore, your operating or working capital is in continual flux. ING unveils your hidden resources for you and examines the opportunities for optimising and making your working capital profitable at any time.

Working capital: management tool and financial indicator

The difference between your current assets – stock, trade receivables and cash – and your current liabilities to suppliers constitutes your company's working or operating capital. This working capital provides scope for growth. It puts a company in a better position, for instance, to negotiate credit facilities or purchasing conditions. It is also an indicator of your company's ability to succeed in difficult periods.

How to optimise your working capital?

You should prevent your working capital from being tied up for long periods of time in the supply chain. The message is thus to optimise the number of days of supplier's credit, number of days of customer credit and stock management. After all, thanks to the more efficient cash flow, you will be freeing up resources to realise your company's ambitions.

ING identifies and lists your resources (hidden and otherwise)

Good liquidity management starts with a proper picture of your company's cash position. That is why we examine with you the financial data and operational processes at the level of suppliers, customers and stock management. By means of that survey and analysis – our Working Capital scan – we also uncover your company's hidden resources. Consequently we provide scenarios to improve your working capital and immediately produce substantial savings.

By choosing ING, you are drawing on our in-depth expertise regarding Working Capital Management. We offer a broad range of solutions for optimally structuring the working capital of both SMEs and large companies.

Solutions for SMEs and large companies
Get paid faster

In order to reduce the number of days of customer credit – i.e. the period from delivery to payment – you can invoice faster, encourage cash payment and conscientiously follow up payment and reminders. ING will also propose practical solutions for even quicker collections. Examples include direct debits, letters of credit and reliable reporting.

Pay later

The number of days of supplier's credit also influences your working capital. You thus control the outgoing payments (that you obviously never make too early) and negotiate payment discounts. Thanks to ING's effective payment instruments, such as a credit card or prior payment, your transfers only take place at the last minute and you thus hold onto your funds for a longer period.

Our expert advisers are active in all these areas on a daily basis. We propose strategies for you to gain the maximum use of your liquidity. And, if your company has specific needs, we will work out a tailored solution for you.

Do you wish to optimise your working capital?

Specific solutions for medium-sized and large companies

Working capital is an essential financial indicator. The larger your working capital, the stronger your company. On the other hand, every euro tied up in this working capital must yield a return that is at least equal to its weighted average cost price. The equilibrium exercise between financial security on the one hand and the profitability of the operating capital on the other hand requires the necessary brainwork.

ING assists large and medium-sized companies – with a turnover of more than 4 million euros – in this regard. We propose solutions that optimise your company's working capital. Supply Chain Financing gives you longer access to your funds, while your supplier is paid immediately. Factoring and Trade Receivables Purchasing enable you to convert larger receivables into cash more quickly.

Supply Chain Financing

ING helps you to improve efficiency within your supply chain with an online payment application. We put you in contact as a large purchaser with your most important local and international suppliers. Your supplier is paid immediately by ING after the goods are delivered (subject to the deduction of costs). You pay the invoice on the due date. The online system provides both parties with full transparency on the status of receivables and debts and on quick automatic payments. In that way, both your working capital and that of your supplier improves.

Factoring and Credit Management

By selling your receivables to ING Commercial Finance, you immediately receive 70-90% of the value of the outstanding invoices. Thanks to this factoring or debtor financing, you already have access to cash resources even though your customer only pays later. You can also leave the entire accounts receivable management to ING. In this way, payment periods are reduced and further working capital is available. We can also protect your operating capital by means of our legal collection service and by taking over all or part of your default risk.

Trade Receivables Purchase programme

ING's Trade Receivables Purchase programme offers you attractive solutions for your financing and balance sheet management. This programme is based on securitisation techniques by which you sell your entire receivables portfolio to ING. The programme is also very flexible: it adapts to the structure and evolution of your portfolio.