Working Capital Mistakes Every Manufacturing SME should avoid !!
Working Capital Mistakes Every Manufacturing SME should avoid !! “Working Capital is the Lifeline of every Manufacturing business!”
What does your company’s financial health look like on the Working Capital Barometer? Is it adequate, healthy or are you struggling with it? Do you have enough funds to manage daily and operating expenses?
Now, let us run a quick reality check. Have you observed any of the following trends or patterns in your company?
Plant Managers purchase excess materials to be on the safer side and avoid stock-outs A high amount of scrap is generated resulting in significant wastage during Production Producing larger quantities than sales forecast ending with excess finished goods Facing difficulty in making timely payment of wages, loan EMIs, supplier payments
If you answered YES, to any or all of the questions above, then it is pretty much likely that you will face challenges of :
Cash flow – Liquid Cash not available to make timely payments. Inadequate Working Capital – struggling to have sufficient working capital.