IntelBank

The cheapest capital in 2026? The cash you already have.

nstaropoli@eragroup.com (Nick Staropoli) — Mon, 09 Mar 2026 05:20:24 GMT

Private equity is navigating the toughest liquidity conditions since the GFC. High-for-longer interest rates, tighter bank covenants, cautious credit committees and capital markets that haven't fully reopened are putting pressure on every part of the PE operating model.

Across the portfolio businesses I work with the CFO themes are consistent:

Loan portfolio resets landing at materially higher interest rates
Debt facilities under increased scrutiny
Longer cash conversion cycles
Lenders aggressively interrogating working capital discipline

When the cost of capital rises this sharply, the maths stops being theoretical and becomes operational. Interest cover tightens, covenant headroom narrows, and inefficiencies that once felt manageable start carrying real balance sheet risk. Proactive CFOs aren't waiting for conditions to normalise or capital markets to open back up. They're engineering additional capacity inside their own businesses because...

...the cheapest capital available in 2026 isn't external funding. It's the cash already sitting on their balance sheets.

This isn't a cost conversation. It's a covenant protection strategy.

In a high rate environment, disciplined working capital management does three things: it strengthens interest cover, protects covenant headroom and reduces reliance on expensive external funding. When you can demonstrate that discipline and it's backed by clear benchmarks and governance, the tone of lender conversations shifts from scrutiny to respect. In this market, that shift is a strategic advantage in its own right.

Across the portfolios I work with, four levers consistently unlock meaningful internal liquidity.

1. Working capital discipline

This is where the real cash sits. Visibility isn't usually the problem, consistent control is. I routinely see receivables stretch by 8–15 days across mid-market portfolios, not because customers won't pay, but because no one truly owns DSO across sales, operations and finance. Inventory creeps as forecasting discipline softens and payment terms drift when teams are reacting rather than negotiating. A structured working capital review is often worth more than a revenue project.

2. Invoice automation and straight-through processing

This lever matters most in businesses that have grown through acquisition and are running across fragmented systems with AP workflows patched together. Manual touchpoints slow cash conversion, inflate labour costs and create errors that ripple downstream. Automation delivers direct working capital upside: better accrual accuracy, fewer disputes, faster approvals and cleaner audit trails.

3. Treasury management systems

Poor treasury discipline is expensive at the best of times. In a high rate environment, it's a liability. When cash isn't centralised, visibility drops, and so does your negotiating leverage with banks. Modern TMS tools give CFOs real-time clarity across liquidity, FX exposure and debt servicing risk. That strengthens both your internal decision making and external credibility.

4. Line item level procurement analysis

Most CFOs I work with believe they have strong cost control because their category level spend reports look stable, predictable and under control. The problem is that leakages, price creep, maverick spend and spec drift don't show up at the category level. They're only visible when you go to the line item. These costs compound quietly with small pricing variances accumulating into significant EBITDA erosion - and it's far more common than most finance teams realise.

No matter the business type, I consistently see line item level analysis identify 3–8% of recoverable spend that can be converted into immediate cash and margin improvement.

In one aged care portfolio business we partnered with, line item analysis revealed double digit price variance on standard consumables that had been completely masked by aggregated reporting. The opportunity to defend margin and improve covenant resilience was sitting there the whole time, it just hadn't been visible.

Control is the strategy

When you combine these four levers, you're not just cutting costs, you're protecting covenants, easing capital cost pressure and buying breathing room inside the business. Top performing CFOs I work with are approaching this systematically, reinforcing their balance sheets while their competitors wait for external relief that may not come. In this environment, control of existing cash isn't just prudent financial management; it's the most reliable funding strategy available.

Indirect spend is the fastest way to improve EBITDA (if you stop running it on autopilot)

nstaropoli@eragroup.com (Nick Staropoli) — Fri, 06 Mar 2026 06:16:43 GMT

If you’re a CFO who suspects your indirect costs are higher than they should be, but can’t quickly prove it, you’re not alone. Most Australian organisations have spent the last two years doing what was required: absorbing supplier price increases, managing wage pressure and defending EBITDA through discipline alone. Cost control became a survival reflex, and for a period, that was enough.

The environment has shifted with competitors reinvesting in capability, customer experience and growth. Your organisation, however, may still be carrying a quiet drag in your cost base that hasn't been examined in years. That drag is indirect spend, and it didn't happen overnight.

It happened through small annual uplifts, surcharges introduced as temporary measures that were never unwound, contracts renewed on legacy scopes and service levels that drifted while pricing continued to climb. Across insurance, facilities, logistics, waste, IT, labour hire and professional services, the pattern is consistent: pricing moves faster than governance.

That matters because indirect costs sit directly below your EBITDA line, are rarely revenue-generating and are genuinely difficult to see without the right data. Left unmanaged, they erode margin and reduce the flexibility your business needs when growth opportunities reappear.

Indirect spend doesn't blow out overnight, it creeps, and by the time it's visible on your P&L it's already expensive.

Why internal reviews hit a ceiling

Most internal cost reviews stall not because your team lacks capability, but because they lack the category-specific intelligence needed to challenge suppliers with confidence.

Your team knows what you're paying, but probably not:

What "good" pricing looks like in today's market
How supplier margin structures actually work
Where commercial leakage typically hides
Which cost increases are justified, and which aren't

That gap is where value quietly disappears. Having run cost programs under board pressure, the ceiling becomes clear quickly: without benchmark data and genuine supplier-side insight, it's difficult to push back with conviction. Commercial conversations change entirely once your team understands how supplier markets actually move - pricing cycles, margin tactics and category-specific behaviour. That shift is what consistently unlocks 20 to 38% reductions across indirect categories, without compromising service or quality.

A 4 step review that consistently unlocks value

The following framework is what Australia's top-performing organisations use to identify and recover trapped cash in indirect spend, typically in 12 weeks and without touching your headcount.

Step 1: Rebuild the baseline

Start with data, not assumptions. That means reviewing 12 to 24 months of your invoices, contract indexation clauses, surcharges and any rebates or service credits that were owed but not claimed. In today's market, where repeated price increases have become routine, this step alone regularly surfaces material misalignment between what's contracted and what's actually being charged.

This work requires people with genuine category depth, specialists who understand the economics, pricing cycles and commercial tactics of the suppliers your business relies on. If that capability doesn't exist internally (and in most mid-market organisations it doesn't) you need external expertise.

Step 2: Define what good looks like now

Your contracts were likely negotiated on the basis of what your business needed two or three years ago. This step requires an honest assessment of your current requirements: service levels, delivery models, compliance obligations, technology capability and commercial terms.

With that clarity, it becomes straightforward to identify which of your suppliers are genuinely fit-for-purpose and which are simply “clipping the ticket”. Across a range of sectors, the same patterns appear regularly: suppliers subcontracting core services, bundling components you no longer require or charging for capability your business stopped using long ago.

Step 3: Select & Implement with precision

This is where value is either locked in or quietly leaked back. Once your preferred suppliers and commercial terms are confirmed, implementation needs to be treated as a commercial project in its own right, not a procurement handover.

That means updated pricing and indexation terms properly embedded, SLAs and KPIs reset, rebates and credits documented and tracked, and your internal stakeholders properly briefed. Organisations that negotiate well but implement loosely give back a meaningful share of what they secured at the table. The discipline applied at this stage determines how much of the benefit actually reaches your EBITDA line.

Step 4: Build visibility that holds

Savings don't sustain themselves. Without structured monitoring of agreed pricing, service-level compliance, rebates owed and supplier-initiated scope changes, costs creep back into your business. Many organisations experienced exactly this over the past 18 months as suppliers adjusted terms through the inflation cycle, not through bad intent, but through weak visibility on the buyer's side.

Top-quartile performers don't rely on goodwill. They rely on data, clear accountability and governance that is systemised and doesn't depend on memory.

Your business doesn't need to rely on annual reviews or goodwill. Maintaining ongoing visibility and holding suppliers to agreed terms as a matter of routine, not exception, is what separates organisations that sustain margin improvement from those that give it back within two years.

What this delivers in practice

When all four steps are executed properly, the outcome is clear: suppliers that are genuinely fit-for-purpose, commercial arrangements benchmarked to current market rates, a cost base your executive peers and board can see and trust, and cash that flows back into growth rather than disappearing into supplier margin.

I see around 10% of organisations sustain this consistently. It’s not because the methodology is complex, but because it requires the right focus, structure and category expertise applied together over time. The ones that do get there treat indirect spend governance not as a project, but as a commercial discipline that runs alongside everything else your business is already doing well.

The Procurement Blind Spot: Why CFOs lose margin, cash and control without knowing it

nstaropoli@eragroup.com (Nick Staropoli) — Sun, 01 Mar 2026 06:23:50 GMT

It’s easy to believe that your procurement function is under control and functioning like a well oiled machine. Your dashboards look healthy, you have long term secure contracts in place and variances appear manageable. Yet across businesses in Australia and New Zealand, I still see Executives surprised by margin erosion, cash leakage and supplier underperformance that “no one saw coming”.

It’s not malicious, nor is it a failure of your team, it’s simply The Procurement Blind Spot. And it’s more common than you might think.

The illusion of control

In many organisations, procurement teams remain operationally busy and strategically invisible, with most reporting focusing on activity rather than outcomes. Think number of contracts signed, new suppliers onboarded, spend categorised or compliance percentages reported.

What this reporting rarely answers is arguably the most important procurement question “Are we getting full value for every dollar committed? And how do we know?” In today’s market, where cost inflation has normalised at higher levels and working capital is under scrutiny, “set and forget” procurement has now become a risk.

Where your cash flow is quietly leaking

Working with businesses across the country, I rarely see the biggest losses come from headline categories, they come from the blind spots that no one is measuring properly:

Contracts implemented but not enforced
Suppliers drifting off agreed pricing or service levels
SLAs signed, then never validated
Approved suppliers charging above market rates over time
Maverick spends hidden inside business-as-usual activity

Individually these look immaterial, but collectively they compound to erode cash flow, distort forecasts and weaken negotiating leverage. To understand their full financial impact, you don’t need more process, just better evidence. You need proof that pricing remains market-aligned, that negotiated savings are actually being banked rather than sitting in a spreadsheet as theoretical value, and that suppliers are delivering against their agreed commitments. Ultimately, this creates early warning signals you can manage proactively, rather than post-quarter explanations you and your team are left scrambling to justify.

The leadership shift to illuminate your blind spots

To protect margin and cashflow we see high-performing organisations making a decisive shift to managing procurement as a continuously validated system with:

Outcome-based measurement - Spend is linked directly to margin, cash, risk and service outcomes.
Ongoing diagnostics, not annual reviews - Supplier pricing, compliance and performance are tested continuously.
Active supplier governance - Contracts are treated as live instruments, not historical documents.
Transparent real-time reporting - Clear, comparable data over time that you and your executive peers can rely on, not just procurement-centric activity metrics.

This gives leaders incredible confidence in their numbers, early visibility of risk and stronger negotiating leverage with suppliers. While protecting cashflow this converts procurement from a back office function into a strategic lever that safeguards your enterprise value.

The uncomfortable truth

Most procurement underperformance survives because it doesn’t look broken. There’s no crisis, just a gradual drift that quietly erodes your margins and cash flow. In a market where capital is expensive and tolerance for surprises is low, unverified procurement performance is exposure. If you can't independently confirm supplier performance, current pricing and sustained savings, you are relying on trust where governance should exist.

Procurement is either quietly protecting your margins or inadvertently undermining them - the difference comes down to visibility.

Supplier contract management and margin protection in growth businesses

nstaropoli@eragroup.com (Nick Staropoli) — Sun, 01 Mar 2026 05:16:18 GMT

If you’re carrying margin accountability in a rapidly growing business, you’ve likely felt this already. Revenue is moving in the right direction, yet the cost base feels less predictable than it should. Supplier contracts were negotiated properly at the outset, commercial terms looked sound and savings were recorded, creating the assumption that value was locked in.

In practice, supplier contract management does not protect margin on it's own. As the organisation scales, contracts become static documents attached to a moving cost base and unless governance evolves alongside growth, the gap between negotiated intent and financial outcome gradually widens.

Why margins drift after contracts are signed

Margins rarely deteriorate because of a single poor decision. They erode gradually as negotiated savings stop reconciling cleanly to reported spend, operating leverage underperforms expectations and forecast confidence becomes harder to defend with precision. In my experience, this is rarely about how well the contract was negotiated, it's about what happens after it's signed.

In growing businesses, contract ownership moves between departments, incremental scope adjustments are approved locally and supplier oversight shifts toward continuity rather than structured commercial validation. Finance reviews category totals, yet the behavioural shifts underneath them receive less scrutiny than they once did. None of these decisions is negligent, staff just made a call to keep the business moving. Over time, however, they reshape the cost base in ways that no one deliberately intended.

Contracts remain technically compliant, yet the underlying economics move away from their original commercial intent because governance frameworks designed for a smaller operating model were never recalibrated for complexity. The result is not a visible cost event, but a steady softening of margin that becomes increasingly difficult to isolate.

Negotiated savings only convert to EBITDA when contract discipline is actively maintained.

Controls that strengthen supplier contract management

In scaling environments, sustained EBITDA performance depends less on renegotiation and more on control architecture. Across businesses where margin predictability has been restored, three disciplines are consistently present.

Line item visibility linked to margin impact

High level category reporting is rarely enough once volume increases. Visibility at SKU, site and usage level allows finance to reconnect cost directly to gross margin assumptions. It shifts conversations from explanation to control and reduces surprises in monthly reporting.

Live market benchmarking

Supplier pricing should be tested periodically against current market conditions rather than rolled forward from the original agreement. Growth often creates inertia in supplier relationships. Structured benchmarking reintroduces commercial tension and strengthens negotiating position without destabilising operations.

Active oversight of change

Scope adjustments, substitutions and incremental add ons require defined approval thresholds and documented review cadence. Without this discipline, value erodes gradually. With structured oversight, cost behaviour remains aligned with margin expectations and working capital control improves alongside revenue growth.

What this looks like in the real world

In a recent hospitality procurement review, a single contract delivered refunds exceeding $3,500 from unexplained pricing adjustments. We then put the items out to tender, and supported a supplier transition which generated an additional 15% annual savings on a $200k agreement, while improving ordering discipline and stabilising monthly variances. On their own, these figures may appear modest. Across multiple categories in a scaling organisation, they materially influence EBITDA trajectory and restore confidence in cost forecasts.

This is the pattern I see repeatedly. Growth does not automatically generate operational leverage. It requires disciplined supplier contract management to convert scale into sustained margin performance and protect working capital controls.

A rational next step

If your revenue has scaled faster than contract governance in your organisation, a structured procurement review will clarify where margin drift is occurring and quantify recoverable value. The objective is not cost cutting, it's reinforcing financial controls so that negotiated value consistently converts into EBITDA performance as the business grows.

For CFOs focused on margin protection and enterprise value, supplier contract management is not administrative oversight. It is a financial control system.