Originally appeared in Accounting Today: August 26, 2020
Working capital is best described as the funds used to run day-to-day business operations. Whether it’s buying raw materials and services, paying employees or keeping the lights on, working capital is an integral factor in any company’s financial strategy and outlook.
Undoubtedly, maintaining consistent cash flow to pay operating expenses and fund well-thought-out investments is crucial for healthy operations. It can be just as critical for business owners and finance leaders to have clear visibility and control over their company’s untapped working capital — particularly in times of economic uncertainty such as now.