Title: What is Working Capital and What Does it Mean for Your Business? | PayPal
Headings: What is working capital and what does it mean for your business?
What is working capital and what does it mean for your business?
Business Resource Center Grow your business Getting funding
What is working capital?
What does working capital mean for your business?
Working capital management 101.
1. Managing cash.
Forecast cash flow.
2. Receivables are cash on its way.
Establish a receivables policy.
Collecting payments from customers.
Managing customer data.
3. Inventory and supplies: An overlooked asset.
Controlling inventory and supplies.
Counting inventory.
The importance of working capital.
Was this content helpful?

Content: 1. Managing cash. The most basic way for a business to manage working capital is to improve cash flow by increasing the amount of cash coming into the business and decreasing the amount going out. Many businesses maintain positive cash flow simply by collecting receivables quickly and slowing down payables without damaging supplier relationships. But businesses that have long invoice periods or seasonal ups and downs can find managing cash flow more challenging. Forecast cash flow. To effectively manage working capital, you need a solid understanding of income and expenses to create a cash flow forecast. As long as it’s business as usual, most businesses are able to manage and predict what comes in and what goes out. Challenges arise when unexpected costs start to creep into the forecast. It’s impossible to account for every unexpected cost, but you can start by making a ‘worst-case scenario’ list.