Cash Agility: The Underrated Power Lever in Private Equity Value Creation

In an industry where growth is often measured in multiples, and value creation is expected to be both scalable and repeatable, operational excellence is no longer a supporting function—it’s a strategic enabler. Yet one of the most fundamental enablers of value creation remains underdeveloped across many private equity-backed businesses: the financial value chain.

This system—spanning everything from working capital and liquidity to payments, banking, and treasury technology—often determines whether a company can scale without friction, execute M&A efficiently, or respond to volatility with speed. And at the heart of that system lies a single objective: cash agility.

Why Cash Agility Matters in PE

Private equity firms have long emphasized growth acceleration, M&A, and operational leverage as core value drivers. These remain powerful levers—but they are increasingly vulnerable to delays, integration challenges, and market-driven volatility. What’s less volatile, and arguably more repeatable, is a firm’s ability to control and redeploy its own capital faster.

Cash agility describes the capability to mobilize internal liquidity—whether to seize investment opportunities, fund strategic initiatives, or manage downside risks—without unnecessary friction or reliance on external capital. It represents the intersection of visibility, control, and speed across the financial value chain.

In this sense, cash agility is about creating an institutional capability to convert operational execution into strategic flexibility.

The Financial Value Chain: A Missed Opportunity

In many portfolio companies, the financial value chain is fragmented. Processes have evolved piecemeal, often in response to tactical needs rather than strategic planning. Treasury sits apart from commercial functions. Working capital is optimized through isolated projects. Systems don’t talk to each other. Spreadsheets fill the gaps between data, decision, and executionAs a result, CFOs and PE sponsors alike struggle with basic questions:

How much cash is available across the group today? Where is it trapped? Can it be upstreamed, invested, or deployed without delay?

In our recent project with a mid-market portfolio company, the finance team had to manually consolidate bank balances from over 200 accounts across 30 entities to produce a weekly liquidity report—consuming hours of effort and often resulting in outdated insight. The company had been growing fast through M&A, but its cash visibility had not kept pace. This created real constraints when the group needed to move quickly on a bolt-on acquisition, forcing reliance on external bridge financing and delaying execution by weeks.

This scenario is common across mid-sized and even large PE-backed businesses. And while every firm understands the importance of “cash control,” few have turned that awareness into a repeatable capability.

From Fragmentation to Agility: What Good Looks Like

Building cash agility starts with aligning the components of the financial value chain into a cohesive, strategically designed operating model. This typically includes:

• Real-time cash visibility across all entities and currencies, ideally enabled through TMS/ERP integration and automated bank feeds.
• Forecasting processes linked to operational and commercial drivers, integrated with actual cash positions—offering a forward-looking, actionable view of liquidity rather than a static snapshot.
• Banking architecture designed for mobility over rigidity—supporting automated sweeps, intercompany lending, and minimal account fragmentation.
• Payment processes embedded with control but freed from manual bottlenecks—using centralized workflows, audit trails, and fraud prevention tools.
• Capex and working capital governance that prioritizes ROI, liquidity impact, and execution timing over pure budget conformance.
• Cash flow management as a continuous fitness program for liquidity—driving productivity, improving free cash flow, and delivering more sustainable performance than reactive working capital initiatives alone.

For PE investors, the ultimate test of these systems isn’t operational elegance. It’s whether they enable faster execution, more efficient capital deployment, and consistent delivery of the investment thesis.

Common Bottlenecks

Across Zanders’ private equity engagements, several recurring issues tend to slow progress toward cash agility:

• M&A Complexity: Acquisitions bring in diverse systems, bank setups, and control environments. Without a clear treasury integration playbook, complexity compounds.

• Underinvestment in Treasury: Many companies have no dedicated treasury function or treat it as a back-office necessity despite a highly positive business case. This leads to disjointed tools, lack of ownership, and reactive problem solving.

• Disconnected Systems: ERP, TMS, and bank portals often operate in isolation. Without an integrated architecture, data is delayed, duplicated, or distorted.

• Legacy Banking Landscapes: Companies often maintain outdated banking setups, including hundreds of rarely used accounts or manual payment processes that create risk and inefficiency.

• Static Forecasting: Forecasts are built manually, reviewed infrequently, and rarely integrated into daily cash decisions.

Solving these challenges requires more than a few process tweaks. It demands a step change in how financial operations are conceived, designed, and executed.

Case in Point: When Financial Architecture Drives Value

In one engagement with a global consumer technology leader generating over $40 billion in annual revenue, Zanders helped transform an inherited web of disconnected financial operations into a single, scalable treasury architecture. The company had expanded rapidly, but its cash remained fragmented across geographies and systems. We centralized liquidity into a unified control structure, redesigned the firm’s bank strategy and FX risk setup, and implemented automated cash processes through an in-house bank.

The results were transformational. Annual costs dropped by $18 million, and over $8 billion in trapped cash was unlocked for reinvestment. Treasury operations became leaner, with over $10 million in savings achieved through rationalized account structures and reduced IT system costs. Perhaps more strategically, the business freed up $17 to $35 million in withheld taxes by migrating treasury entities—capital it could now allocate to growth, innovation, or debt reduction. What had once been an operational bottleneck became a value multiplier.

Another engagement with a multinational education group revealed the power of standardization at scale. With 80+ campuses across continents and multiple ERP systems, treasury processes were fragmented and reactive. Zanders introduced a centralized target operating model, implemented a TMS integrated with the group’s ERP infrastructure, and deployed straight-through-processing to streamline reporting and control.

As a result, the company now saves $3.8 million annually, has released $1.7 million in working capital, and accumulated a projected $14 million benefit over a five-year horizon. More importantly, it has increased cash forecasting accuracy, reduced manual workload, and enhanced operational resilience—capabilities that will serve the group across future growth cycles.

Cash Agility: A Lever for Repeatability

For private equity investors, the question isn’t whether cash agility creates value. It’s whether it creates value that’s consistent, transferable, and visible to the next buyer.

Too often, value creation initiatives focus on EBITDA expansion—growth, margin improvement, pricing, procurement. These levers are critical, but they are also cyclical, competitive, and often constrained by talent or timing.

The financial value chain offers a different type of leverage. When optimized, it unlocks value that is self-funding, recurring, and resilient. Cash agility enhances decision velocity, reduces the cost of capital, and minimizes execution risk. It also makes businesses more attractive at exit by demonstrating financial discipline, liquidity control, financial risk awareness and systems maturity.

This is especially relevant in today’s environment, where LPs and acquirers scrutinize not just the numbers, but the operating backbone behind them. Clean books and good margins are important—but increasingly, buyers want to know: Can this company manage growth? Can it scale its financial systems? Can it fund itself efficiently?

These are questions cash agility helps answer.

Where Zanders Fits In

Zanders works with both PE sponsors and portfolio companies to build this capability. Our role is to serve as an external financial operating partner—focused on aligning finance execution with investment priorities.

We combine strategic thinking with hands-on implementation, delivering projects that range from working capital diagnostics to full treasury transformations. Our clients include global PE houses, mid-market sponsors, and management teams navigating carve-outs, integrations, and digital finance initiatives.

What distinguishes our approach is the focus on outcome: measurable improvements in cash visibility, efficiency, and control—not just slideware or process maps. We work with the CFO, but we work for the investor.

Cash Agility as a Strategic Outcome

Ultimately, cash agility is not an end in itself. It’s the enabler that turns capital into capability.

It allows portfolio companies to reinvest faster, fund growth internally, and respond to uncertainty with confidence. It gives CFOs the tools they need to lead, not lag, in execution. And it helps investors translate operational improvements into multiples—by building the infrastructure of repeatability.

In a market where capital is no longer cheap, and execution risk is rising, agility is not a luxury. It’s a requirement.