Managing the cash tied up in operations — inventory, receivables, payables — so the business doesn't starve while profitable.
How to apply working capital management
- Map the cash conversion cycle
- Negotiate terms: payables up, receivables down
- Fund inventory with the right instruments
The #1 mistake to avoid
Growing revenue while cash gets scarcer.
The metric that matters
Frequently asked questions
What is working capital management?
Managing the cash tied up in operations — inventory, receivables, payables — so the business doesn't starve while profitable.
Why does working capital management matter for my business?
Because it directly affects how well your business performs — get it wrong and it costs you in measurable ways. Done right, it becomes a competitive advantage.
How do I apply working capital management?
Start with the practical steps: Map the cash conversion cycle; Negotiate terms: payables up, receivables down; Fund inventory with the right instruments. The key is to start small, measure, and expand what works.
What is the most common mistake with working capital management?
Growing revenue while cash gets scarcer.
IDAP Finance Division
This glossary entry is maintained by the IDAP Finance division — specialists who deliver this capability on demand to businesses worldwide.