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.