Research by global consulting and advisory firm Ernst & Young [I'm sure all these 'global advisory firms' used to be known as accountants, Ed] has revealed that large companies in Europe and the US have as much as $1 trillion tied up in working capital.

The firm surveyed 2,000 large organisations and found that many companies are simply not managing their working capital particularly well - despite a renewed focus on days payables and inventory management, forced by the current economic climate.

"Despite a much stronger focus on cash, the findings indicate plentiful opportunities for many companies to release additional liquidity from working capital," David Sage, a partner for working capital management at E&Y told the Financial Times. "The amount of $1,000bn is equivalent to 6 per cent of sales for these businesses."

The story goes on to say that companies should change bonus schemes to reward improvements in cash performance and modify payment terms for customers and suppliers "where necessary".

The problem is, of course, that by doing so there will always be a loser. Whether this is the customer, the buyer or the supplier.

A better way to reduce this huge volume of working capital, it would seem, is to promote the use of supply chain finance - something the Bank of England seems to understand and which corporates are slowly but surely beginning to understand too...