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Five recession-proofing strategies for uncovering hidden capital

During times of economic instability, cashflow, working capital and business resilience take on heightened importance. Faced with today’s potential for recession, enterprises across industries are tightening their finances. 

While that’s a very understandable response in this uncertain climate, such pullbacks can have ripple effects including operational contraction and an inability to direct funds needed for new products, innovation, strategic initiatives and expansion.

Move from enduring to thriving in tough times

For business leaders, the ability to not only endure periods of instability but thrive and grow amidst volatility is an ongoing objective and challenge. Cashflow and working capital are critical to this. Not only do they help secure the foundational aspects of business during economic downturns or disruptions, they open opportunities to modernize and expand growth into the future.

But working capital doesn’t just magically appear for businesses when it’s most needed. Or can it? The answer to that question can be, yes — with the right tools and approach.

Studies by the APQC and others show it’s not unusual for enterprises to be spending 2% of their AP disbursements on duplicate or erroneous payments. As an organization, if you can recover even half of that, you can bolster your cash and working capital by a significant amount. 

Uncovering hidden capital is one of four key focus areas discussed in our new eBook, Business strategies for turbulent times: A leadership guide to recession-proofing. This timely guide is designed to help business leaders identify ways their organizations can thrive despite economic turmoil — and take decisive and targeted action to fortify and grow success. 

Below are five important steps for finding hidden capital overviewed in the eBook. Each of these can help you unlock previously uncaptured funds and working capital for your business.

  1. Clarify payments.

    Perform a methodical analysis of every aspect of your payment processes to gain a clear and comprehensive picture of your payments landscape. With that, you can much more easily identify specific spots where capital is leaking due to gaps in controls or other reasons.

    Our FastCap® Finance Analytics uses rigorous spend forensics, AP post-payment audits and recovery powered by advanced data analytics to comb through volumes of AP data to identify payment errors and initiate targeted recovery. It’s helped our clients recover millions tied to overpayments.
  2. Review contracts.

    Constant reevaluation of contractual arrangements with vendors and suppliers will help you ensure compliance and best terms across your procurement operations.

    Leveraging contract analytics capabilities, FastCap digitizes contracts, purchase orders and invoices. We couple this with human expertise to identify key leakage areas — which has led to millions of dollars in recoveries tied to our clients’ procurement contracts.

  3. Zero in on solicitation and recovery.

    This is key to recovering overpayments in a timely manner. 

    One of the FastCap Finance Analytics options is our AP audit teams soliciting statements and communicating with our clients’ suppliers to quickly identify recovery opportunities and find root causes of problems. It’s enabled millions in credits from supplier statements and interactions for our clients.

  4. Determine your best data.

    Understand what’s impacting your company’s bottom line and how to measure it. You can only do this by identifying and capturing data that is truly representative of the everyday workings of your finance operation.

    Through spend forensics in our FastCap solution, Conduent category managers and sourcing experts analyze spend across targeted categories of an organization (e.g., IT, facilities, capital expenditures, contingent labor, third-party spend, etc.) — focused on finding opportunities for quick wins. These targeted projects concentrate on capturing the best data, reducing the number of suppliers, negotiating better pricing and streamlining tail-end spend for broad-scale sourcing savings.

  5. Apply smart analytics.

    The caliber and capability of your analytical tools will determine your ability to separate a real problem from noise in your data. With a broad view and ability to quickly pivot when capital recovery opportunities are identified, FastCap delivers a customized blend of people and technology that helps everyone work smarter.

Leaders of enterprises large and small need the tools, technology and support to strengthen their operations and grow success in the midst of economic uncertainty. Finding capital inefficiencies and unnecessary spend across procurement and AP processes has been a key focus of ours throughout more than 30 years delivering finance, accounting and procurement solutions around the globe. When businesses can harness multidimensional capabilities to uncover cash they didn’t even known was there — it can be a game changer.

Read more details about this and three other key focus areas for recession-proofing in our eBook and how Conduent can help your organization build lasting resilience.

About the Author

Andrea Whisler is general manager for Finance, Accounting & Procurement, Multichannel Communications, and Digital Payments at Conduent. She has over 20 years of experience strategically partnering with commercial clients to drive desired business objectives, address pain points, create more efficient business processes and improve the ability to focus on core business. Andrea has deep expertise in all aspects of the business outsourcing lifecycle and a proven track record fostering deep partnerships to deliver critical outcomes and help clients win in their respective markets.

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