The working capital management and finance for any company matters the most. Any company not having enough working capital may not sustain for a long time. It is where it becomes a must to increase your working capital and liquidity.
Having enough working capital is key to run any business successfully. Read on and find easy ways to increase your working capital management and finance in this post. For the finance part, one can always apply for the working capital demand loan and meet cash needs.
However, there are multiple ways to ensure proper working capital management.
- Keep shorter operating cycles
Your operative cycle starts when you begin to spend money to initiate a project. When you receive the payment, then only this cycle ends. Hence, if you are able to limit your time between these aspects, it will help you maintain robust working capital. If you start to wait for weeks to send your invoices, it may stagger your gains and affect your cash flow.
- Proper credit checks on customers is a must
A bad credit score of a customer may have a direct impact on your accounts receivable. Hence, you ought to ensure that your customers are able to pay bills on time. As per the type of your order, it will be better to run a credit check on your client before initiating a project with them or signing a deal. New customers with a lower credit limit should be your consideration.
- Collect outstanding invoices on time
Another way to increase your working capital and liquidity is by collecting outstanding invoices on time. Your accounting department should keep a strict watch on all past-due records. You should also send out enquiries if payments are delayed beyond an acceptable time period. Your focus should be to unveil any issues that may have kept you away from your client completing the payment. Sending timely reminders may speed up the outstanding process. You should not wait until the last day to collect your payment or send a reminder.
- Limit unwanted expenses
If you wish to increase your working capital and liquidity, you should avoid indulging in unwanted expenses. There should be complete transparency when it comes to the amount you spend. To begin with, you should start to examine your budget and break it down. If you find there have been some unwanted expenses, you should make efforts to curtail them at all cost.
- Apply for a working capital demand loan
If none of the methods works to help your business elevate its working capital, you can apply for a working capital demand loan. A working capital demand loan is a feasible solution to help you get a considerable amount to cater to your needs. You should check your lender’s eligibility and know how much you will be able to get.
You may get up to Rs.45 lakh as a working capital demand loan depending on your lender’s policies and the eligibility criteria. The lender’s eligibility and required documents are enlisted on their websites so that you can prepare in advance and avoid any loan rejection.
Leading financial institutions like Bajaj Finserv presents pre-approved deals to their existing customers on several financial products such as business loans, home loans, personal loans and more. It can simplify the loan processing and make it faster. You can share your basic details like your name and mobile number to unlock your pre-approved loan offers right away.