Finance is considered to be the lifeblood of any business.
Keeping business running and meeting all the cash flow requirements is where the financial management courses come into the picture. One of the finance management topics is working capital management.
Let’s understand working capital management and everything about it.
What is Working Capital Management?
Working capital management is through which your business’s operational activities keep running smoothly. It is a difference between current assets and current liabilities. It helps companies manage cash flow and meet short-term business objectives. It even includes unexpected costs.
Factors to Consider for Working Capital
These are working capital factors that one needs to keep when running a business or being employed somewhere with fintech courses.
Liquidity Management
To meet everyday business needs, an organisation must have adequate cash resources, which are ensured by effective liquidity management. Additionally, it matters because it impacts a business’s financial stability, which can determine whether it succeeds or fails.
It could be difficult for a corporation to maintain efficient cash flows or to settle its short-term debts if a more significant portion of its assets is invested in illiquid assets.
Manages Account Payable
Money that a business owes to its vendors and is listed as an obligation on its balance sheet called accounts payable.
To ensure efficient working capital, managing accounts payable is crucial. Late payments may incur penalties or fines and harm a company’s credit standing. Non-payment in some circumstances may necessitate the compulsory sale of assets to satisfy creditors. A significant part of working capital management is controlling accounts payable and guaranteeing on-time payment.
Manages Short-Term Debt
Similar to liquidity management, managing short-term financing should focus on ensuring that the organisation has enough liquidity to monetize short-term operations without taking significant risks.
The selection of the ideal financing mechanism and the sizing of the available funds are necessary to effectively manage short-term financing.
Manages Stock
The primary asset of a business used to produce sales revenue is inventory.
Investors see stock turnover as a crystal-clear sign of a company’s sales potential as well as its reliability in terms of purchasing and producing. While extremely high inventory levels may imply inefficient use of working capital, low inventory levels suggest the company is more likely to lose revenue.
Manages Account Receivable
Debtors owe the business balances known as accounts receivable. The sum becomes owed when products or services are provided to a customer but have not yet been paid for.
A business could experience cash flow issues if it struggles to get payment from its creditors. The collection ratio frequently determines the average time it takes for a business to receive compensation after making a credit sale.
We have attached all the information about the financial management course from IIM Tiruchirappalli.
You get to
- Decode financial statements, including profit & loss, trading accounts, and balance sheets
- Leverage all possible financial management acumen
- Knowledge of Financial technology and analytics
- Helps with identifying finance functions and business operations
- Discuss the relationship between finance & sales, production, and materials management
To get yourself enrolled in Post Graduate Certificate Programme in Financial Management program, you need to have:
- Graduate degree with at least 50% from a recognized university
- 1 year of relevant working experience
Who is this program for?
- Professionals working in marketing, production, corporate strategy, or HR procurement
- Professionals working in the finance sector
- Graduates wanting to work in the banking sector or financial institutions
What is the salary structure of fintech courses in India?
The salary structure of such professionals who get certified in fintech courses in India or capital management is as follows:
| Salary Structure | |
| Senior Manager Finance | 25 Lakhs Per Annum |
| Head | 27 Lakhs Per Annum |
| Assistant Vice President | 32 Lakhs Per Annum |
| Partner | 33 Lakhs Per Annum |
| General Manager | 37 Lakhs Per Annum |
Source credit: https://drive.google.com/drive/folders/1MSZ74_sqTTN_bA5WKHOYzjUEp2-RTjLy
Conclusion
Working capital is one of the pillars of the business and having knowledge about it means ensuring that you can manage an entire business operation. Companies value employees who excel at managing cash flow since all problems are solved if the company has consistent cash flow and works smoothly.
Get yourself enrolled in the fintech course and witness the change. You can earn and learn, meaning you don’t need to leave your current job. Just spend a few hours, and you are ready to get a job in the finance sector.
