EuroFinance

Working capital is once again coming under the spotlight. As companies deal with new supply chain disruptions and cost pressures, there is renewed focus on how internal cash can be put to better use. For many treasurers, the goal isn’t just to improve cash flow—it’s to make working capital work harder for the business.

At EuroFinance’s International Treasury & Cash Management Summit Miami, treasury leaders at Circana, an American market research and technology company and CEMEX USA, a sustainable construction materials company, are shifting their focus: recalibrating payment terms, modernising systems, and forging deeper supplier engagement to turn working capital into a true competitive tool.

A new company-wide mindset

For Daniel Fleming, VP assistant treasurer at Circana, the key challenge isn’t just about numbers—it’s about alignment. At Circana, a strong sales culture often results in generous payment terms, which can strain cash conversion cycles.

“Our sales team is really good at selling,” he said. “And one of the things they do to affect that selling is provide flexibility on payment terms.”

His role has increasingly focused on raising awareness of balance sheet and cash flow impact, not just profit and loss. “It’s not just about financial leadership. You need sponsorship across commercial leadership too,” he added. “I think it’s repeating it, not once, not twice, but over and over again, so there’s no escaping that this is a priority.”

Rather than issuing directives, Fleming aims to influence behavior. “If I’m telling people what to do, I feel like I’m not doing my job,” he said. “It’s really about embedding support for the operating model across teams.”

Also read: Supply chain finance as a strategic tool for managing working capital

Transforming payables             

While Circana works to manage receivables and behaviors, CEMEX USA’s working capital gains have mainly come from the payable side. Francisco Salinas, Treasurer at CEMEX USA shared that in 2016, the company’s average working capital cycle was 21 days. By last year, it had dropped to just four.

“Our DSO has remained disciplined, holding at about 38 days, which we’re happy with,” he said. “The big change came in our payment terms. We went from 30–40 days to 105 days on average.”

The treasury team initially played a supporting role but eventually became more active by offering tools like supply chain finance and virtual cards. “Procurement extended terms, often without considering downstream consequences. Treasury stepped in to mitigate those impacts,” he said.

Salinas emphasised that cultural alignment was crucial. “I’ve spoken to peers at other companies who launched supply chain finance or virtual card programs and saw limited success—because there wasn’t a top-down mandate. If the C-suite isn’t championing it, it won’t stick.”

Unexpected wins from virtual card programs

CEMEX’s embrace of virtual cards began from necessity. After reaching their limit on supply chain finance lines, the treasury team experimented with a card-based program—one Salinas initially viewed with skepticism.

“I thought, what’s the acceptance really going to be?” he said. “But if you target the right vendors—primarily small mom-and-pop shops—acceptance is high. We ended up generating $3 million in incremental EBITDA.”

That once-experimental program has now scaled significantly. “We’re monetising about $200 million in virtual card payments. It’s part of our structural working capital strategy now,” said Salinas. “We’re even considering making virtual cards our standard payment method for new vendors.”

When systems shift, data discipline matters

Fleming also spoke about Circana’s earlier success with a detailed working capital dashboard that offered real-time insights by country. But a recent ERP switch disrupted that progress.

“We had this great dashboard, but switching ERPs broke it,” he said. “That’s the danger—if you get complacent about your tools or the data behind them, you’re vulnerable.”

The dashboard’s absence made it harder for local finance teams to push for change. “They didn’t have the collateral to influence non-finance leaders,” he said. “If you want a global operating model to work, you need consistent data and the systems to support it.”

Also read: “Cash is still king”: treasury leaders tackle working capital challenges and tech transformation

Agreeing on what to measure and how

For the treasury to lead effectively, it’s not just about tools—it’s also about language. Both Fleming and Salinas stressed the importance of having a shared definition of core metrics like DSO and DPO.

“When we were ramping up our working capital efforts, one issue was how we reported the improvements,” said Salinas. “I’m looking at bank balances. Accounting is looking at the ERP. We had to align definitions and make sure everyone’s speaking the same language when we report to management.”

Reevaluating financing as the business evolves

At CEMEX, metrics like cash value added (CVA) help inform whether to continue financing via supplier terms, especially as the company’s credit rating and cost of debt evolve.

“Back in 2016, we had high financing costs. Reducing working capital freed up $650 million in cash flow and helped us deleverage,” said Salinas. “Now that we’re investment grade, we’re asking whether we’re financing ourselves too much through suppliers.”

CVA—an internal benchmark combining net operating profit with the capital charge on assets—guides these decisions. “If a program’s cost is below our CVA threshold, we go ahead. If not, we rethink it,” he said. “But now that our corporate borrowing costs have dropped, we’re reevaluating those metrics.”

Finding the right role for the TMS

When it comes to systems, both leaders agree that ERP and TMS have distinct but complementary roles in managing working capital.

“At Circana, the ERP holds financial statement data and balance sheet items like DSO,” said Fleming. “But our treasury management system tracks intercompany flows and liquidity. The two have to work in tandem.”

His advice? Start with strategy. “What’s the agenda you’re trying to drive? Then ask what data you need to support that. That’ll tell you what to pull from the ERP or the TMS.”

Evolving roles and future ambitions

Both Circana and CEMEX USA show that working capital is not just about the numbers—it is a strategic lever linked to behavior, culture, and cross-functional alignment. Whether it’s standardising definitions, building financial literacy across teams, or trying new tools like virtual cards, treasury leaders are taking on expanded roles as internal change agents.

While their paths differ—Circana focuses on sales behaviors and data quality, and CEMEX on supplier financing and structural programs—the goal is the same: making working capital a source of resilience and long-term value.

As Salinas said, “You need the buy-in, the tools, and the execution—but above all, you need the mandate to challenge how things have always been done.” 

Is your organisation using working capital as a lever for competitive advantage—or just as a liquidity buffer?

We’d love to hear your perspective. Share your thoughts at [email protected]—we may feature your insight in a follow-up piece.