Capgemini Survey Reveals More than 25 Percent of Fortune 1000 Companies' Hiring Capabilities May Suffer Due to Delayed Cash Flow

Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services, today released the findings of its most recent Executive Insight Survey that found Fortune 1000 companies are feeling the pressures of late payments on their bottom line. The top three areas affected by delayed cash flow, as cited by the surveyed executives, include growth (29 percent), hiring (27 percent) and revenue (20 percent).

The survey, commissioned by Capgemini and conducted online in September 2011 by Harris Interactive, polled 304 executives from Fortune 1000 companies and found that nearly half (45 percent) have seen an increase in late payments from their clients. Fifteen percent of executives noted a major increase (a jump of 25 percent or more) in late payments within the past year. Nearly a quarter of those affected by payment delays said that this trend has had a significant impact on their business.

Some companies may adopt tactics to mitigate the impact of late payments from their customers, including outsourcing cash collections. Of those companies that currently outsource the collections function, more than half said it reduced bad debt loss. In addition, companies noted an increase in profitability (34 percent) and increased efficiency on all points of the revenue cycle (32 percent).

“The survey shows a worrying trend, as many top firms are being impacted by an increase in late payments. Our experience in working with some of the world’s largest companies has shown that those organizations that outsource their accounts receivables processes to third-party specialists may significantly reduce their bad debt losses,” said Chris Stancombe, Head of Finance and Accounting Outsourcing at Capgemini. “In this market, the need to stimulate cash flow is critically important to companies looking to remain competitive and sustain a strong workforce.”

The survey highlighted other areas affected by delayed cash flow, including the ability to offer wage increases, support innovation and invest in research and development.

Capgemini’s Business Process Outsourcing (BPO) unit works with clients to help their Order-to-Cash function efficiently generate profitability and increase cash flow. Capgemini has recently enhanced its credit management and collections outsourcing service with the acquisition of the Order-to-Cash business of Vengroff, Williams & Associates, Inc., a leading specialist provider. Capgemini realizes over $39 billion in account receivables collection value annually for its clients.

For more information and to download a summary of Capgemini’s survey results, please visit http://www.us.capgemini.com/OTCinsightsurvey/ .

Survey Methodology

This executive survey was conducted online within the United States by Harris Interactive on behalf of Capgemini between September 14 and 16, 2011, among 304 senior executives at Fortune 1000 companies. Company revenue and number of employees were weighted where necessary to bring them into line with their actual proportions in the larger universe of Fortune 1000 companies.

All sample surveys and polls, whether or not they use probability sampling, are subject to multiple sources of error which are most often not possible to quantify or estimate, including sampling error, coverage error, error associated with no response, error associated with question wording and response options, and post-survey weighting and adjustments. Therefore, Harris Interactive avoids the words “margin of error” as they are misleading. All that can be calculated are different possible sampling errors with different probabilities for pure, unweighted, random samples with 100 percent response rates. These are only theoretical because no published polls come close to this ideal.

With more than 115,000 people in 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2010 global revenues of EUR 8.7 billion (approximately USD $11.5 billion). Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience(TM), and draws on Rightshore (R), its worldwide delivery model.

Capgemini’s expertise is recognized in Business Process Outsourcing (BPO) with a solution portfolio that spans Finance & Accounting, Customer Care & Intelligence, Procurement, Assurance Management, Human Resources and Knowledge Process Outsourcing services. As part of Capgemini’s Rightshore(R) delivery network, BPO professionals provide services to clients worldwide 24 hours a day, seven days a week, in 36 languages, from centers located in Australia, Brazil, Canada, Chile, China, Guatemala, India, Poland, and the United States.

Harris Interactive is one of the world’s leading custom market research firms, leveraging research, technology, and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries including healthcare, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant, and consumer package goods. Serving clients in over 215 countries and territories through our North American and European offices and a network of independent market research firms, Harris specializes in delivering research solutions that help us – and our clients – stay ahead of what’s next.