Working capital management is a fairly important issue of our time.This term refers to that part of the enterprise, which is invested in material assets and the assets of the company with a maturity of not more than a year.These costs in full amount returned to the investor, as included in the cost of production.
Working capital management organization is repelled by the two components, such as foundations and current treatment.The first images of the company's resources are used in treatment.A revolving funds include the portion of the assets, which are involved in the production process, losing the material form, and fully carry its own value to the finished product.However, they are not in circulation more than one production cycle.
Working capital management is based on the rational use of these funds.And for this you need to know exactly what items are included in each of them.Thus, current assets include primarily reserves required for the start of the production cycle, that is, raw materials, energy, labor and other items.In addition, this group can include elements such as semi-fabricated at the plant, and work in progress, that is, products which have not passed through all stages of the production cycle.A good example is the individual parts, which come in the assembly shop.Prepaid expenses are considered to be part of a revolving fund.Such costs involve mapping tools that are used to upgrade and improve existing products and technologies at the moment, but will be used in the manufacture of goods in a subsequent period.
treatment with the Fund, the situation is easier as they include the amount of cash in hand and balances with the company used in the calculations, unsold finished products and those products that are in the way, and therefore can not be considered implemented.For the rational use of these resources need to be planned and actual budget and reporting.After all, qualified working capital management has a positive impact on the performance of the company, namely the amount of net income, which remains at the disposal of predpritiya.The specialist is able not only to choose the most convenient way to include ongoing costs in the price of finished products, but also opportunities to reduce their costs by upgrading or sourcing cheaper raw materials.
Of course, the main goal of every leader is to obtain the greatest possible profit at this level of expenditure.At the same time to maintain the image of the company at the appropriate level should be responsible for the quality of the products or services offered.In order to meet the current targets, select the specific methods of working capital management, which will allow to develop a clear plan of action and achieve tangible results.For example, the definition of the norm of working capital allows you to set the minimum amount of resources required to ensure the continuity of the production cycle.
Every company is obliged to make their own accounting policies, which reflects the aims and objectives of the company.In addition, it allows to balance their costs in terms of taxation.Increasing the speed of the production cycle leading to accelerated capital turnover, and thus makes a profit more quickly to the head.Of course, for effective implementation of each method should designate a specialist who will manage the working capital.
