Skip to main content
Working Capital in Balanced Scorecards and KPIs

Working Capital in Balanced Scorecards and KPIs

$249.00
Your guarantee:
30-day money-back guarantee — no questions asked
How you learn:
Self-paced • Lifetime updates
When you get access:
Course access is prepared after purchase and delivered via email
Toolkit Included:
Includes a practical, ready-to-use toolkit containing implementation templates, worksheets, checklists, and decision-support materials used to accelerate real-world application and reduce setup time.
Who trusts this:
Trusted by professionals in 160+ countries
Adding to cart… The item has been added

This curriculum spans the design and operationalization of working capital metrics in multi-functional organizations, comparable to a multi-workshop program that integrates strategic scorecard development, cross-functional governance, and system-level execution seen in enterprise-wide performance management initiatives.

Module 1: Integrating Working Capital Metrics into Strategic Frameworks

  • Selecting which working capital components (accounts receivable, inventory, accounts payable) to include in the Balanced Scorecard based on organizational value chain priorities.
  • Aligning working capital targets with strategic objectives such as market expansion or cost leadership without distorting operational behavior.
  • Defining ownership of working capital KPIs across finance, supply chain, and sales functions to ensure accountability.
  • Deciding whether to normalize working capital metrics by revenue, EBITDA, or asset base for cross-divisional comparability.
  • Calibrating scorecard weighting to reflect the strategic importance of liquidity versus profitability in different business units.
  • Establishing escalation protocols when working capital KPIs deviate beyond predefined thresholds in the scorecard.

Module 2: Designing Actionable Working Capital KPIs

  • Choosing between Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO) based on industry-specific cash conversion cycle dynamics.
  • Setting rolling versus fixed-period baselines for KPIs to account for seasonality in manufacturing or retail environments.
  • Adjusting KPI calculations for M&A activity or foreign exchange fluctuations to prevent misleading performance signals.
  • Implementing segment-specific KPIs for divisions with divergent inventory turnover or customer payment behaviors.
  • Determining whether to use gross or net working capital in KPI formulas based on tax and financing structures.
  • Validating data sources for KPI inputs to ensure consistency between ERP systems and financial reporting.

Module 3: Cross-Functional Ownership and Incentive Alignment

  • Assigning accountability for DSO reduction between credit managers and sales teams when payment terms are negotiated at point of sale.
  • Structuring incentive compensation to reward inventory reduction without increasing stockout rates or production downtime.
  • Resolving conflicts between procurement teams optimizing for cost savings and finance teams managing payable days.
  • Implementing joint performance reviews between supply chain and finance to reconcile inventory KPIs with operational realities.
  • Designing escalation paths when regional managers override centralized working capital policies for local market reasons.
  • Integrating working capital performance into promotion criteria for operational leadership roles.

Module 4: Data Infrastructure and System Integration

  • Selecting integration points between ERP modules (e.g., SAP FI and MM) to automate working capital KPI data collection.
  • Mapping chart of accounts structures to ensure consistent classification of current assets and liabilities across subsidiaries.
  • Implementing data validation rules to flag anomalies in receivables aging or inventory valuation before scorecard reporting.
  • Configuring real-time dashboards that update KPIs based on transactional data without manual intervention.
  • Establishing data governance protocols for correcting discrepancies between operational systems and consolidated financials.
  • Defining user access levels to prevent unauthorized modification of KPI inputs in shared financial systems.

Module 5: Target Setting and Benchmarking

  • Selecting appropriate peer groups for benchmarking working capital performance in multi-industry conglomerates.
  • Adjusting internal targets for DPO based on supplier concentration and contractual payment term limitations.
  • Using historical trend analysis versus external benchmarks to set ambitious yet achievable KPI goals.
  • Factoring in planned capital expenditures or product launches that temporarily increase inventory levels.
  • Calibrating targets for subsidiaries in high-inflation countries where working capital ratios behave differently.
  • Revising KPI targets mid-cycle due to supply chain disruptions while maintaining scorecard integrity.

Module 6: Governance and Performance Review Cycles

  • Scheduling monthly working capital reviews with cross-functional leads to interpret KPI movements and assign corrective actions.
  • Deciding whether to include working capital KPIs in board-level scorecards based on liquidity risk exposure.
  • Documenting exceptions to policy (e.g., extended customer credit during market entry) for audit and review purposes.
  • Standardizing commentary templates for KPI variance explanations to ensure consistency in performance reporting.
  • Managing the timing lag between operational actions and KPI reflection in financial data during performance assessments.
  • Conducting root cause analysis when multiple KPIs (e.g., DSO and bad debt) move in conflicting directions.

Module 7: Risk Management and Policy Trade-offs

  • Assessing the impact of aggressive DPO extension on supplier relationships and supply continuity risks.
  • Quantifying the cost of inventory reduction against the risk of lost sales due to stockouts in high-margin product lines.
  • Establishing credit risk thresholds that balance DSO improvement with acceptable levels of customer default.
  • Deciding whether to prioritize working capital optimization over early payment discounts offered by suppliers.
  • Implementing fraud controls when accelerating collections through factoring or receivables financing.
  • Evaluating the tax implications of intercompany working capital transfers in multinational organizations.

Module 8: Continuous Improvement and Adaptation

  • Updating KPI definitions in response to changes in business model, such as shifting from product to subscription revenue.
  • Retiring obsolete working capital metrics when organizational structure or systems are reengineered.
  • Integrating lessons from post-mortems of working capital shortfalls into scorecard refinements.
  • Adopting predictive analytics to forecast KPI breaches before they occur based on leading indicators.
  • Reassessing scorecard relevance annually to ensure alignment with evolving strategic priorities.
  • Standardizing working capital reporting formats across acquisitions to enable consolidated performance monitoring.
!