Generating billions of dollars in savings starts with business leaders taking a broader view of how they deploy working capital, Xandr CFO Ray Carpenter says.
When Ray Carpenter headed a financial planning group within AT&T, he led a task force to help the company make better use of its working capital. The group devised a way to improve visibility into the period when capital is deployed to build an asset and when that asset starts generating revenue.
Simply by creating that visibility, Carpenter said last week in a CFO Thought Leader podcast, the group helped business leaders identify ways to save money by making small changes in their plans without decreasing the quality of their asset or slowing down its development.
“As a company like AT&T grows, it doesn’t take a lot to make a change in a working capital practice that can translate into dollars with a B behind it,” Carpenter said. “An [unused asset creates] fallow capital. We’d much rather have it earning a return, so [with the new visibility] everyone was looking at the same metrics, thinking about working capital in a total fashion.”
Source: CFO Dive