According to industry experts, a typical one billion dollar company spends approximately $27 million on unnecessary working capital and inefficient processing functions because they lack visibility into the financial supply chain. Optimizing Back Office Operations: Best Practices to Maximize Profitability uses examples and case studies to show how cost optimization—and not cost reduction—in the core back office operations is the right approach to maximizing profitability and enterprise value. Implementation guidance is provided for Executives, CFOs, and Controllers on transitioning from outdated processes to a fully-optimized financial supply chain.
Table of Contents:
Preface ix
CHAPTER 1 Profits: The Reason a Business Exists 1
Profitability Defined 2
Profitability Equation and Related Metrics 9
Liquidity, Growth, and Financial Flexibility 19
Conclusion 25
CHAPTER 2 Cost and Capability: Strategic Choices 27
Capability: One Size Does Not Fit All 28
Cost: You Get What You Pay For 34
Measuring Capability 41
Conclusion 44
CHAPTER 3 Financial Supply Chain: Entering the Gold Mine 45
What Is the Financial Supply Chain? 45
Working Capital Defined 50
Working Capital Processes 59
Conclusion 65
CHAPTER 4 Platform for Execution: A System for Maximizing Profits 69
Process Benchmarking 74
Process Optimization 86
Process Automation 86
Process Integration 88
Process Standardization 89
Conclusion 92
CHAPTER 5 Optimizing Accounts Payable 95
Implications of A/P Effectiveness 97
Best Practices 99
Enabling Technologies 115
Conclusion 122
CHAPTER 6 Optimizing Accounts Receivable 125
Implications of A/R Effectiveness 126
Best Practices 130
Enabling Technologies 137
Conclusion 144
CHAPTER 7 Optimizing Purchasing 147
Implications of Purchasing Effectiveness 149
Best Practices 152
Enabling Technologies 160
Conclusion 168
CHAPTER 8 Optimizing Treasury Operations 171
Implications of Treasury Effectiveness 175
Best Practices 179
Enabling Technologies 193
Conclusion 200
Epilogue 203
Index 207
About the Author :
ZAHID KHALID is Managing Partner at The Hardstone Group, a management consulting practice specializing in helping clients increase profitability through improvements in financial supply chain processes. He has authored numerous articles on finance and technology in various industry publications and is a frequent presenter at events related to working capital optimization. He can be reached via the firm's Web site: www.hardstonegroup.com.
