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You can run out of working capital but not cash

An organization cannot have too much working capital at any given point of time, It must maintain the balance of working capital available all the time. Too much working capital means the money is just just not doing anything. It is often said you can only run out of cash once. The impact of unproductive working capital on a business is devastating. Effective cash flow management practices not only generate more cash for businesses, it gives the much needed plasticity to take advantage of new opportunities without worrying about getting investments or external finance.