- KredX Editorial Team
- 27 Oct 20
- business,Working Capital

SMEs are perhaps the most crucial drivers of economic growth in India.
According to the latest figures, there are more than 42.5 million SME units, accounting for the production of 6000+ items. However, the numbers also speak of the stiff competition that prevails in this sector. In this context, working capital management is one factor that effectively determines a company’s survival and growth trajectory.
But, there are a few challenges that SMEs face in managing working capital efficiently, like:
- Insufficient resources to undertake data-driven financial planning.
- Delayed payments from customers or lengthy cash cycles.
- Lack of credibility that prompts financiers and suppliers to be reluctant in forwarding credit.
- Dearth of adequate know-how regarding financial management.
Ways To Improve Working Capital Management
Proper management can make a world of difference in how a company performs in the long-run. Hence, for an SME, the primary concern should be to ensure that cash flow problems are kept at bay. While each company’s working capital requirements and ways to improve its management differ, there are a few broad approaches that can be applied to various enterprises. They are:-
Paying Suppliers On Time
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Engage More With The Finance Department
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Streamline Receipts
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Avail Loan
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Credit Check Of Customers
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Deft Inventory Management
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Monitor Expenses Carefully