What are the aspects of Working Capital Management

A) inventory management
B) receivable management
C) cash management
D) all of the above

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The Correct Answer for the given question is option (d) All of the above

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Answer Explanation for Question: What are the aspects of Working Capital Management

Table of Contents

Working Capital Management

Working capital, also known as net working capital (NWC), refers to the difference between business assets and liabilities. Maintaining sufficient cash flow to meet a company’s short-term obligations and operating costs is essential to working capital management. In order to effectively manage working capital, several tasks must be coordinated, such as managing short-term investments, granting credit to customers and collecting on that credit, managing inventory, and managing payables. Some of the aspects of working capital are:

Inventory Management

A company’s inventory management system is used to avoid product overstock and outages. It includes several features, including order management, asset tracking, product identification, etc. Inventory management systems aim to reduce the overall cost of carrying. In addition to cost savings, increased efficiency, and warehouse management, inventory management tools possess several other advantages.

Receivable Management

In account receivable management, critical questions like when payments are due, how much is due, etc. are answered. Here are the main characteristics of account receivable management tools; allows the transfer of account receivable information for analysis, forecasting, presentation, reports, etc., Make sure complete customer information is kept, such as sales history, balance, deposit amount, last payment, etc., and Minimize errors in data entry and allow printing of invoices, credit memos, debit memos, etc.

Cash Management

A working capital management system should integrate the cash management module with other modules like accounts receivable/payable, payroll, and general ledger. The cash management tools includes main features like; highlighting current and future balances for all cash accounts, providing full bank reconciliation, allowing for the export of information for analysis, forecasting, presentation, reports, etc.

Lastly,

I hope after going through this post you might have clearly understood the Question: What are the aspects of Working Capital Management

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I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,

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What are the aspects of Working Capital Management | Accounting Quiz