Accounting Drive is a platform for aspiring accountants to learn and excel in Accounting. It helps in learning, understanding, and practicing complex accounting concepts in a super simple and easy way. So let's connect to get these accounting guides right in your inbox!
What are the best ways of getting working capital funds? Can you tell the answer
Did you receive it from a friend? Subscribe here for free.
Hello Reader
How are you doing?
Hopefully, you will be fine and doing well. Last week you learnt about the management of working capital. You are aware of the best working capital management strategies. While managing working capital if you or your manager face shortage of funds for working capital. How would you solve this issue? Can you suggest any helpful source of getting WC funds to your manager? Do you know how to get the working capital?
You should know how to get the required working capital. Let’s dive deep into it.
This week’s “Accounting Guide” is about the ways of getting working capital
Concept description
Steps to getting working capital
First, determine how much working capital do your company need.
Calculate how much working capital will you manage and how much funds do you require. You can find it by seeing the working capital ratio if you have lower or less than 1 ratio. It means there is a shortage of funds.
There are many ways of getting working capital funds. Different ways are acquired by different businesses. Some of the best ways are:
Trade Credits are attained from the creditors. In simple words trade credits are the time taken from creditors more than credit terms.
Invoice Factoring is the process of selling un-received invoices at a lower value than its face value.
Invoice Financing is slightly different from invoice factoring. In this company sell its un-received invoices and receive the payments from customers at maturity too.
Business lines of credit are the agreed amounts of credit. A company can borrow money any time when it needs.
Business Credit cards are also used for getting credits for working capital.
| Best Ways of Getting Working Capital |
Did you find value in this newsletter?
If yes, forward it to your friends, classmates, and peers because sharing is caring!
What should I add more in this newsletter? Do give your suggestions.
What do you want to learn more? Or what should I add in it. This newsletter is in its construction phase. Just reply to this email and suggest me.
I read every email. I will answer you sooner or later.
Credit for now
Debit soon
Till then
Hira from Accounting Drive
Tell the world about this newsletter!!!
Accounting Drive
Accounting Drive is a platform for aspiring accountants to learn and excel in Accounting. It helps in learning, understanding, and practicing complex accounting concepts in a super simple and easy way. So let's connect to get these accounting guides right in your inbox!
Did you receive it from a friend? Subscribe here for free. Hi dearReader Are you ready to elevate your skills and master the art of balance sheets? 🚀 For the next 5 DAYS ONLY (27 August to 31 August), you can grab your FREE copy of AD's Kindle ebook: 📚 Balance Sheet Workbook: Practice to Prepare Balance Sheets in Just 10 Minutes Like a Pro: Practice Questions with Working Area & Answer Key 📚 What’s inside? ✅ Practice Questions that mirror real-world scenarios ✅ Working Areas for hands-on...
Did you receive it from a friend? Subscribe here for free. Accounting Drive Hi Reader, I hope you are good and doing great. You may be wondering why I have not sent you the Accounting Guide last week? Well, I have been very busy with my kid because of his examination. That is why I could not write the newsletter for you. But today, you got good news. Ta da, you are going to learn a new topic. You have learnt about the working capital; what it is, how to calculate, analyze and manage it. In...
Did you receive it from a friend? Subscribe here for free. Accounting Drive Hi Reader The last week was very busy for me because of my sister-in-law’s wedding. That is why I am writing a short Accounting Guide for this week (does not includes practice questions and solutions). You know what is working capital, how to calculate and analyze it. But do you know everything about working capital that an accountant needs to know? The duties of an accountant are evolving day by day. Today, an...