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: 4 Tips for Effectively Managing Working Capital - SoftCo
4 Tips for Effectively Managing Working Capital
Blog - 29 Oct 2020
Regardless of a company’s size or industry sector, working capital is an important metric in assessing the long-term financial health of the business. The level of working capital available to an organization can be measured by comparing its current assets against current liabilities. This tells the business the short-term liquid assets remaining after short-term liabilities have been paid off. The Covid-19 pandemic has raised significant working capital challenges and uncertainties for organizations. Supply chain disruptions have been a major challenge, along with changing consumer demands and the collection of receivables. Generally, companies will strive to achieve a high level of working capital. Having a high level of working capital indicates a well-managed company with a greater potential for growth. There are also several benefits to having a high level of working capital including improved liquidity , operational efficiency, and increased profits. Working Capital management is particularly important since it is an accurate barometer for assessing the long-term financial health of a business and ensures that adequate cash flow is always maintained to meet its short-term commitments. In times of economic uncertainty, having such financial protection is vitally important.