Who typically leads working capital initiatives in larger companies? Accounting,Treasury, or individual departments (AR, AP, inventory replinishment)?

Dear Anonymous:

In regards to the management of working capital Best Practice is that one area should be responsible for COORDINATING the management of working capital across the complex. You continue to have specific departments as the subject Matter Experts responsible for Inventory, Receivables, Payables tracking.it is critical to have one dfepartment responsible for coordinating the target setting, reporting and tracking.

As far as where that role should be housed: during myt 30 year career I have known some companies to establish a VP or Working Capitalmy 30 year, I have known several companies to give the role to the Controller for myself I have been asked to perform the role for 3 large companies as an expanded Treasury mandate (Treasury global in scope, across all lines of business, working capital linkage to cash management and forecsting.

Good luck
David

My two cents. Working Capital (WC) management i.e. WC initiatives should be initiated by top management i.e. the CFO. However, in order to make WC initiatives effective a CFO needs well instructed operational teams to turn WC initiatives into long term results. Good working capital management benefits the continuity of a company as a whole and as such the CFO has the responsibility to explain the necessity of WC management; not only to AR, AP and supply chain / logistics, but also to manufacturing, sales, marketing and customer service.