How to improve issues with working capital management
Working Capital Management is a complex business of managing short-term assets and short-term liabilities; ensuring your business can afford its daily expenses whilst also investing your business’s assets.
It’s a daily necessity in business and aids efficient operation, as well as helping to improve a business’s earning & profitability, incorporating:
● Inventory
● Accounts payable and receivable
● Cash
● Debt
Among other aspects of accounting.
And, spanning so many areas of accounting, there are a variety of moving parts that can go wrong, lose efficiency or delay this vital process, such as:
● Slow-moving inventory, turnover cycles, and stockpiling
● Delays or reluctance to share information with key employees
● Difficulty in tracking or inability to track KPIs
So, how can some of these problems be solved?
How to solve working capital management problems
Choose and track appropriate KPIs: the key to working capital management is, of course, being able to assess and monitor overall working capital health & performance which, in turn, enables you to act and plan accordingly.
Therefore choosing and tracking/measuring the most appropriate KPIs and setting realistic & achievable goals is one of the most powerful things you can do to improve working capital management - monitoring KPIs regularly then enabling you to produce comprehensive reports, plan and forecast.
Moving all of your accounting online: moving everything you possibly can regarding and relating to accounts - including payment options and invoicing - and investing in automation will help speed up the entire process; significantly reducing delays; enabling you to clearly track payments and forecast cash flow.
What’s more, automated payments and electronic payment processes can also contribute to significant cost reductions.
Fostering good relationships and honest, open communication: in all businesses and within all departments, communication is key and fostering positive relationships and good communication with your customers, as well as your fellow employees, with inevitably help with working capital management; an approachable and friendly team with good communication skills, full of people that respond quickly, will help reduce the risk of delays and encourage others to work with you and provide you with the information you need, when you need it.
Optimise your Working Capital with CreditForce
CreditForce has been designed to optimise working capital - providing an end-to-end credit management software solution that focuses on:
● Cash generation
● Rapid query resolution
● Intelligent workflows
That leads to improved customer satisfaction, DSO reduction by at least 30%, and productivity gains of over 50%.
A total solution, CreditForce addresses collections, risk and working capital management; cash and billing forecasting, query management, exposure tracking and collections target management, with interactive dashboard reporting and analysis.
Solve your working capital management problems with CreditForce; intelligent collections management.
To find out more, please click here or request a demo.