Title: 4 Tips for Effectively Managing Working Capital - SoftCo
Headings: 4 Tips for Effectively Managing Working Capital
4 Tips for Effectively Managing Working Capital
Blog - 29 Oct 2020
Benefits of Positive Working Capital
Improved Liquidity
Operational Efficiency
Increased Profits
Achieving the Correct Level of Working Capital
The State of Working Capital in 2020
Tips for Effectively Managing Working Capital
1. Manage Procurement and Inventory
2. Pay vendors on time
3. Improve the receivables process
4. Manage debtors effectively
Conclusion
Posted by
James Duffy

Content: One important aspect of working capital is to send out invoices as soon as possible. Companies should reassess invoicing processes in order to eliminate inefficiencies that may be causing delays in sending invoices to your debtors. Such inefficiencies may include manual processing, lost invoices, and high volume of invoices to manage. Professional services firm, Deloitte recommends using accounts receivable technology to deliver invoices electronically in order to speed up billing and collection, and ultimately shorten the cash conversion cycle. It is also vital to ensure that invoices are accurate before they are sent to your debtors to avoid delays in payments. Maintaining an accurate debtor’s ledger ensures that you are on top of debtor collection dates and can send timely reminders to your customers regarding payment. 4. Manage debtors effectively
The best way to ensure you have enough working capital available is to make sure money is coming in on time. Reassessing your contracts and credit terms with debtors may be necessary to make sure you are not giving debtors too big a window to pay for goods and services, as this may be impacting negatively on your own company’s cash flow. CFOs should review credit terms with company management to ensure that the level of credit being offered to debtors is appropriate for your company’s cash flow needs.