Balancing your short-term assets and liabilities is a continuous responsibility, and working capital shares a direct relationship with it. WC provides you with the insights of your business’ financial health and also enables you to propel your business forward.
There are many skills and habits you need to infuse in your business for proper WC management. From strengthening the solvency to enhancing goodwill, lots of efforts goes in maintaining the WC. Here are a few ways you can consider to maintain a healthy liquidity ratio for the successful operation of your business:
Manage procurement and inventory well
Inventory management poses as an essential factor for making the most of your WC in business. For instance, an excessive stock can act as a heavy burden on the cash flow and insufficient stock can result into loss deteriorating your customer relationship.
Therefore, it is incredibly significant to streamline and centralise the purchasing process. The millennials are using inventory management tool to give an edge on their businesses budgeting. In the case of a cash crunch, you may consider taking a working capital loan, customised to facilitate all your business needs.
Work on the receivable process
Conduct a baseline assessment of your current status and identify the patterns linking incoming and outgoing assets and receivables. You map out the receivables and payables over a stipulated period. Make sure to shorten the receivable period with a prompt collection system.
Many successful firms take aid of technology to deliver invoices electronically to have a timely billing and collection process. You can also follow the same route to shorten the cash conversion cycle. Always remember shorter WC capital life avails better short-term liquidity for the business.
Opt for well-defined financial decision
Help your business drive sustainable growth and improvements in the WC with a smart financial choice. Create a manageable WC action plan, followed by analysing and evolving the strategies. Cascade the information and understand the scale and scope of the effects of WC.
If it’s running on negative, without further delay find out way outs to infuse money to boost the WC. Various NBFCs offer a customised business loan as working capital loan with competitive rate of interest. It also provides a tailor-made pre-approved offer on business loans, personal loans, mortgage loans, and a host of other premium financial products & services.
This particular scheme simplifies the time-consuming process of taking credit. You can check your pre-approved offer on its website by entering a few details.
Some more benefits of availing a WC loan:
NBFCs provide a substantial financing amount up to Rs. 30 Lakh to maintaining continuity in business and increasing overall goodwill. Moreover, lenders also give a new-age loan for catering to all those unforeseen expenses. This is known as Flexi Loan which will allow you to borrow fund form the sanctioned amount whenever you need it.
Here, you will pay the only the interest as EMIs and that too on the utilised amount. Thus, you can save a considerable fund by shaving off the EMIs by up to 45%.
Financial institutions considering the volatility in any business offer convenient repayment tenure to their debtors. So, you have the advantage to elect a schedule ranging between 12 months and 60 months.
Another benefit of this loan is that it doesn’t pledge any collateral. Borrowers considering WC loan no need to breathe under the fear of property seizure in case of default payments. With less stringent norms and minimum documentation, business finance is easy to obtain. It will take you a 60-second application process to get the loan amount disbursed within 24 hour.
The business landscape has undergone a significant transition after the imposition of GST on WC. So, many businessmen like you might go through a trial and error phase to maintain their WC ensuring the uninterrupted flow of production. Therefore, apart from an appropriate business plan for utilising WC capital needs, a considerable fund is of utmost necessity.
Taking credit from prominent NBFCs can be a feasible way to balance this unstable state. Not to forget, it is imperative to sufficient cash flow, as working capital can make or break a business.
About the Author:
Rupesh Singh is freelance writer and founder of moneyoutline.com You can follow him on Google + & Facebook.