Effective working capital management focuses on several key components:
Cash Management: Ensuring adequate cash flow to cover day-to-day operations and unforeseen expenses. Inventory Management: Optimizing inventory levels to avoid overstocking or stockouts, which can tie up funds unnecessarily. Accounts Receivable: Implementing strategies to reduce the time it takes to collect payments from customers. Accounts Payable: Managing payment terms with suppliers to optimize cash flow without harming relationships.