Working Capital for Business

May 10, 2017 | Publisher: corporatecreditmidwest | Category: Finance |   | Views: 12 | Likes: 5

Working capital is the cash-on-hand available to a business for day to day operations. A retail grocery store may need cash on hand to pay vendors that require payment on delivery. A clothing boutique may need funds to pay for buyers to go to various fashion events to determine what to buy for the coming season and an auto mechanic needs money to purchase parts and supplies to complete car repairs. In terms of finding a few tips on how to manage your working capital, there are three objectives to consider. The objectives include having enough cash to make necessary payments when due, making sure the money does not cost more due to interest on a loan or overdraft protection policy, and planning for increase cash flow needs in the future. Debtors Customers who buy from you on credit, even moderate credit terms like 30 days, have your company's working capital health in their hands. If they do not pay on time, your cash flow can be seriously dented. Creditors Just as you should not overload your household with more debt than your income can support, your business's creditors should be kept to a minimum both in number and accrued balances. When possible, take advantage of early payment discounts or pay cash to avoid interest. Inventory Carrying high levels of inventory when it is in demand is good for business as well as revenues. However, carrying a lot of inventory when demand is low hurts your cash on hand. When cash is tied up in inventory, sales must increase in order to rebuild cash levels. Email info@midwestcorporatecredit.com Phone (844) 220-8826 Fax (630) 281-5915 Address 1S280 Summit Ave STE E2 Oakbrook Terrace, IL 60181

http://midwestcorporatecredit.com/working-capital-for-business/    ......    Working capital is the cash-on-hand available to a business for day to day operations. A retail grocery store may need cash on hand to pay vendors that require payment on delivery. A clothing boutique may need funds to pay for buyers to go to various fashion events to determine what to buy for the coming season and an auto mechanic needs money to purchase parts and supplies to complete car repairs.

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