Optimal Management of Working Capital

This course teaches participants the significance of Working Capital Management as the tool or managerial accounting strategy to always guarantee the efficiency of the business and its short-term financial health. Positive working capital is required to ensure that an enterprise is able to continue its operations, and has enough working capital at any one time to meet the short-term obligations, like buying inventory or covering payroll, or paying its loans, etc. Participants will also learn how Working Capital Management structures the working capital cycle. The longer the working capital cycle is, the longer a business is tying up capital without earning a return on it to keep the business sustainable.

Course Contents

Day One

Introduction

• Importance of Working Capital Management

• Cash flow and profit relationship

• Risk and return trade-off.

The Working Capital Cycle Basics

• Cash conversion Cycle

• Inventory

• Debtors and account receivables

• Creditors and account payables.

Working Capital Optimization Best Practice

• Economic order quantity

• Process improvement

• Credit control

• Stock control techniques

• ABC
• VED
• SDE
• MRP
• JIT

• Debtor management and its costs

• Outsourcing of debt management.

Day Two

Financing Working Capital

• Bank current lines

• Supplier financing

• Alternative receivables funding.

Technology Solutions

• Payment systems.