{"id":7849,"date":"2023-11-02T12:30:19","date_gmt":"2023-11-01T23:30:19","guid":{"rendered":"https:\/\/forwardaccounting.co.nz\/?p=7849"},"modified":"2023-10-31T13:04:20","modified_gmt":"2023-10-31T00:04:20","slug":"understanding-and-improving-working-capital","status":"publish","type":"post","link":"https:\/\/forwardaccounting.co.nz\/understanding-and-improving-working-capital\/","title":{"rendered":"Understanding and improving working capital"},"content":{"rendered":"
When it comes to running a thriving business, understanding and effectively managing your <\/span>working capital<\/b> is crucial. Essentially, working capital is the cash readily available for the day-to-day running of operations. The more protracted the business cycle, the higher the working capital requirement tends to be. Your goal? To ensure you have enough working capital on hand to cover operational expenses, with a reasonable buffer in place.<\/span><\/p>\n Feeling anxious about your working capital? No worries! To improve it, let\u2019s start by figuring out how much working capital your business actually needs. By using cash flow forecasting, you can proactively calculate when you might run out of cash and determine the minimum capital required to avoid that situation.<\/span><\/p>\n The key to reducing your working capital needs revolves around cutting down on expenses. Here are some strategies to consider.<\/span><\/p>\n Another effective strategy is to shorten your cash cycles.<\/span><\/p>\n Accurate cash flow forecasts can provide valuable insights into your working capital, allowing you to take proactive steps for improvement. Profit-and-loss forecasts, on the other hand, help assess future profitability, enabling you to make informed decisions about your working capital needs.<\/span><\/p>\n The goal is to lessen working capital concerns by understanding what it is, how much you need, and ways to improve it. Once these processes are in place, managing your working capital will become second nature, allowing you to focus on growing your business and boosting profitability.<\/span><\/p>\n Remember, it\u2019s always beneficial to consult with your accountant regarding your working capital needs and possible improvement strategies.<\/span><\/p>\n We\u2019re here to help \u2013 get in touch now.<\/span><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" When it comes to running a thriving business, understanding and effectively managing your working capital is crucial. Essentially, working capital is the cash readily available for the day-to-day running of operations. The more protracted the business cycle, the higher the working capital requirement tends to be. Your goal? To ensure you have enough working capital […]<\/p>\nHow to improve your working capital<\/b><\/h3>\n
Ways to reduce working capital needs<\/b><\/h3>\n
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Shortening cash cycles<\/b><\/h3>\n
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Forecast your cash flow and profit-and-loss<\/b><\/h3>\n
Wrapping Up<\/b><\/h3>\n