How to Manage Working Capital Efficiently

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    09-Aug-2015

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<ol><li> 1. How to Manage Working Capital Efficiently A good way to measure an organization's overall efficiency level is its working capital. For this reason, the task of managing working capital is very crucial in terms of a long term point of view. Keeping this in mind, nowadays, organizations of all scales - large, medium, and small, take time to train their staff in the management of working capital. In this context, it becomes important to mention the huge time and effort invested by some of the working capital Sydney firms in reaching the efficiency level that is right up there with the very best. You can find out the working capital of an organization by deducting the current liabilities from the total value of current assets. Usually, the person in charge of calculating or managing the working capital must always make sure that a proper balance is maintained under all circumstances between the assets and the liabilities. Ideally, the total value of assets must always be a notch higher than the total calculated value of the liabilities. This will indicate towards a sound financial condition in front of the investors and other interested parties. However, for maintaining an ideal working capital balance, the manager must take into account some important factors such as information systems, organization structure, market environment, and supply chain relationships. It's important to realize that if any of these factors get neglected at any point of time, it will affect the working capital and the organization's productivity at the same time. One of the key secrets of managing working capital effectively rests with the forecasting of an ideal cash flow. However, the task of forecasting is by no means an easy one. It requires specialized knowledge and years of experience. Better forecasting of cash flow must invariably include factors like competitor's strategy, customer preferences, market cycles, product cycles, unforeseen events and its probable impact. Almost all the working capital Sydney firms have proved quite good at forecasting. So, you can take their help to resurrect your business at any point of time. The fact that the Sydney firms also provide an online consultation makes them even more approachable. On the other hand, it's absolutely important to design contingency plans along with forecasting of cash flow. The contingency plans invariably include the aspect of risk-management. So, the people in charge of drawing contingency plans should be qualified, experienced, and well-trained to assess the risk in order to safeguard the interest of the company. This will eventually help to improve the standing of the working capital, and the overall financial health of the organization. Dispute management skills not only improves relationship with customers, but also goes to a great </li><li> 2. extent when it comes to freeing locked up cash as a result of long term arguments. When you display such skill efficiently, it automatically influences complex procedures like large cash collection, long distance sales, and purchase order entries. As a result, level of productivity, level of efficiency and of course the working capital standing of the organization enhances by leaps and bounds to an almost new level. The working capital Sydney firms along with many other organizations all over the world have benefited by displaying such skill. Gus Gilkeson, write for a "working capital sydney" the founder of grow-capital. To get more information follow us on twitter This content has been taken from : http://growcapital.wordpress.com/2014/07/28/how-to-manage- working-capital-efficiently/ </li></ol>