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Working Capital Management: A Key to Business Success Startup Perspective

by CA Abhay Gundecha

CA Abhay Gundecha emphasized that efficient working capital management is an important constituent of sustainable growth of a business organization. The benefits of efficient

Working Capital Management especially for startups are:
a. Helps in streamlining processes
b. Reduces the cases of theft and frauds
c. Cutting down sundry expenses.

Further he said in working capital management, Cash in hand is majorly used for three purposes, namely – Speculation, Precaution and Transaction. All the three are quite pivotal in deciding the growth of a small business. He said inefficient working capital management can lead to insolvency and failure of business organization. He explained all the components of working capital management namely, Inventory Management, Cash management, Account receivable management, account payables, operating cycle etc.

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