If 2021 was about recovery, (we hope) 2022 will be about continued reimagining. The COVID-19 pandemic forced businesses to rethink how they approached large parts of their operations. The digital transformation sped up and automation became more commonplace. In 2021, industry emerged from the lowest parts of the pandemic and in 2022 the changes that were initially thought to be temporary, will.
Working capital is crucial for maintaining operations and business growth. It enables companies to manage short-term obligations and “keep the lights on” while keeping an eye on the long term. Maximizing working capital creates a domino effect of benefits that directly impacts the bottom line.
In a perfect world, all customer payments would be received when they’re due, everytime. Of course, this isn’t the case. This is why many balance sheets include an allowance for doubtful accounts as a form of internal insurance for distressed customers.