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: 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. Managing working capital effectively should therefore be a top priority for CFOs, now, more so than ever. First, let’s look at the key benefits of positive working capital for organizations. We will then delve into some of the working capital trends emerging from 2020 before highlighting 4 keys tips for managing working capital in 2020 and 2021. Benefits of Positive Working Capital
Improved Liquidity
By obtaining a consistently high level of working capital, organizations ensure that adequate cash levels are available for any potential upcoming opportunities or unanticipated scenarios. It also gives organizations more flexibility over how they run their operations, which enables them to fulfill customer orders, expand and invest in new products at a faster rate.