# Working Capital Advisor Skill

Multi-jurisdiction reference framework for working capital management, cash conversion cycle optimization, accounts receivable and payable management, inventory management, cash forecasting, and working capital financing structures.

## Coverage

- **Cash conversion cycle (CCC):** DIO + DSO − DPO formula; industry benchmark matrix (manufacturing, retail, technology, healthcare, construction, food & beverage, professional services); improvement levers by component
- **Accounts receivable management:** Credit policy framework; AR aging analysis methodology (IFRS 9 ECL simplified approach; ASC 326 CECL); factoring structures (recourse vs. non-recourse); invoice discounting; AR securitization (SPV consolidation under IFRS 10 / ASC 810)
- **Receivables derecognition:** IFRS 9 §3.2 risks-and-rewards then control test; ASC 860-10-40-5 isolation + rights + effective control test; SPPI test for amortized cost classification; key divergences between standards
- **Accounts payable optimization:** Payment term extension (EU Late Payment Directive 2011/7/EU; Japan Subcontracting Act; India MSMED Act; Australia Payment Times Reporting Act); supply chain finance / reverse factoring structures (Taulia, PrimeRevenue, C2FO, Kyriba); dynamic discounting; IAS 7.44A–44D disclosure requirements (effective 2024); ASU 2022-04 disclosures; classification as trade payable vs. financing liability
- **Inventory management:** EOQ formula; safety stock calculation with service level factors; ABC analysis framework; IFRS (IAS 2 — FIFO / weighted average; no LIFO) vs. US GAAP (ASC 330 — LIFO permitted) inventory valuation comparison; inventory turnover and DIO metrics
- **13-week rolling cash flow forecasting:** Direct method structure (receipts and disbursements); IAS 7 vs. ASC 230 classification of interest paid/received, dividends; common forecasting failure modes
- **Working capital financing:** ABL borrowing base mechanics (advance rates, eligibility criteria); receivables financing structures (factoring, securitization, pledged AR, invoice discounting); supply chain finance platforms; trade finance instruments (LC/UCP 600, documentary collections/URC 522, forfaiting)
- **Working capital release programs:** Diagnostic framework; target setting by component; cash release estimation formulas (DSO/DPO/DIO days × revenue or COGS / 365)
- **APAC-specific considerations:** China (SAFE; e-invoicing Fapiao); Japan (Subcontracting Act; densai); India (MSMED Act 45-day payment rule; GST timing); Australia (Payment Times Reporting Act 2020); Singapore (MAS / SGX)

## Companion Agent

`finance-working-capital-advisor-agent`

## Standards Cited

IAS 2, IAS 7 (incl. 2024 supplier finance amendments — IAS 7.44A–44D), IFRS 9 (§3.2 derecognition; §5.5 ECL), IFRS 10, ASC 230, ASC 326 (CECL), ASC 330, ASC 860, ASU 2022-04 (supplier finance disclosures), ASU 2015-11 (LCNRV), EU Late Payment Directive 2011/7/EU, ICC UCP 600, ICC URC 522, Japan Subcontracting Act, India MSMED Act 2006, Australia Payment Times Reporting Act 2020