![]() ![]() ![]() In this case, your assets are anything that can easily be converted into liquid cash within a 12-month period, which often includes accounts receivable, cash, and inventory.Įfficient working capital management focuses heavily on ensuring that the business is able to maintain the liquidity needed to keep business running while hopefully leveraging assets as investments. It is, simply put, the difference between a business’s current assets and its current debt and financial liabilities. This often involves careful management across multiple departments within a company, and may include revenue collection, inventory management, debt management, and accounts payable. Working capital management is essentially the efforts and strategies that ensure that companies are leveraging both their assets and liabilities in order to keep things running smoothly. Both can do serious (and potentially irreparable) harm to your business that can be difficult to recover from, so let’s take a look at how working capital management can protect your business and help you thrive all at once. ![]() It is even more important to manage your cash flow and your capital management now as more companies are extending their Days Payable Outstanding. One thing that you never, ever want to slip, however, is your cash flow and your capital management. At any one point there’s so much to keep up with that it’s not uncommon for things to start to slip. There’s so much to keep up with, including peaks and falls in the market, shifting consumer behaviors, and new developments in the industry. There’s no denying that running a business is an exhausting and complex task. ![]()
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