Working capital management involves the relationship between a firm's short-

term assets and its short-term liabilities. The goal of working capital

management is to ensure that a firm is able to continue its operations and that it

has sufficient ability to satisfy both maturing short-term debt and upcoming

operational expenses. The management of working capital involves managing

inventories, accounts receivable and payable, and cash. It focuses on three main

issues come under the working capital management such as: holding cash, float

and managing cash.

From the chosen organization you have to complete the following tasks:

Task 01: Evaluate working capital cycle of the organization. (3.a)

Task 02: Apply EOQ model for inventory policy of the organisation. (3.b)

Task 03: Analyse the effects of just-in-time inventory policy on stock control by

the organisation. (3.c)

Task 04: Explain why does the organization need to monitor its creditors? (3.d)

Task 05: Identify the risks of taking increased credit from your chosen

organization’s viewpoint. (3.e)

Task 06: Evaluate the key categories that are to be considered when assessing

the credit-worthiness of a customer by the organization. (4.a)

Task 07: Identify various internal and external sources of information to be used

in assessing the credit-worthiness of a customer of the organisation. (4.b)

Task 08: Analyse techniques applied by the organisation that may be used to

assist in the collection of overdue debts. (4.c)

Task 09: Differentiate between factoring and invoice discounting. (4.d)

Factoring, or invoice factoring as it is most commonly known, is a type of

business financing that is ideal for owners who cannot wait up to 60 days to get

their invoices paid. It provides a person with the necessary working capital to

pay rent, suppliers and meet payroll. And, as opposed to a business loan,

factoring is easy to get. Invoice factoring eliminates the usual 60 day wait to get

paid by the person's customers.

How To Get Working Capital For Your Company

By Marco Terry / www.articledashboard.com

Do you own a business? If you are like most business owners, you probably have

a lot of

responsibilities. First and foremost, you have to meet payroll. Every time. You

also need to pay

rent and suppliers - on time. All this requires working capital.

However, if you are selling products or services to commercial clients or to the

government, you

are probably painfully aware that they can take as many as 60 days to pay their

invoices. Why?

Because if you want their business you have to conform to their terms. There is

no other way

around it.

But this also leads to an impossible situation. You have bills that need to be paid

quickly but

customers that want to pay slowly. Unless you have a lot of money in the bank,

it’s not a

sustainable situation. Sooner or later you’ll miss payroll, delay a supplier

payment, or turn a

large opportunity away.

The solution is simple. You just need working capital. One way to get working

capital is to get a

business loan. However, business loans are hard to get and can prove to be

inflexible. A better

solution is to factor your invoices.

Factoring, or invoice factoring as it is most commonly known, is a type of

business financing

that is ideal for owners who cannot wait up to 60 days to get their invoices paid.

It provides you

with the necessary working capital to pay rent, suppliers and meet payroll. And,

as opposed to a

business loan, factoring is easy to get.

Invoice factoring eliminates the usual 60 day wait to get paid by your customers.

The factoring

company provides you with an advance on your soon to be paid invoices. In

effect, it accelerates

your invoices. By accelerating your invoices, you get the working capital you

need to run and

grow your business. And, unlike a business loan, there are no arbitrary limits.

The amount of

financing you get is only limited by your sales. If your sales increase, so does

your financing.

If you are running a business that is growing – and you can’t afford to wait up to

60 days to get

your invoices paid, consider invoice factoring.