The need for working capital (WCR) is a crucial indicator for managing a company's cash flow. It corresponds to the amount that you need to finance to operate your current business, while waiting for your customers to pay you. The better you control your working capital, the more secure you are in your cash flow and your development projects.
In this article, discover how to optimize your working capital using concrete levers, good management practices... and innovative digital tools such as Bill Up, which make it easy to track and pay invoices.
The working capital measures the difference between the resources you mobilize (stocks, trade receivables) and those you obtain in the short term (supplier debts). If this need is too high, you should finance it with cash, credit or your own funds.
BFR = Stocks + Receivables - Accounts Receivable
This calculation shows you whether you need to finance a cash advance (positive working capital) or if your operating cycle generates resources (negative working capital).
Reducing your working capital allows you to transform sales into cash more quickly. This prevents you from using bank overdraft or borrowing to finance your business.
With a working capital under control, you can forecast your cash flow more accurately, avoid financial tensions and invest more confidently.
Good management of the working capital reinforces the confidence of your partners (banks, suppliers, investors) and improves your financial image.
Encouraging quick payments is essential. This requires fast invoicing, clear payment conditions, and above all a smooth payment solution.
This is where a tool like Bill Up makes a difference.
Bill up allows your customers to pay their bills in a few seconds. They can:
The result: you are paid more quickly, and your trade receivables decrease, which immediately reduces your working capital.
Bill Up is already collaborating with more than 100 European banks, which guarantees optimal compatibility for all your customers.
A good tracking tool helps you detect delays, follow up with your customers, and reduce unpaid bills. The automation of reminders or the use of recovery solutions can also limit excesses.
Inventory is an invisible but real cost. To reduce them:
A well-controlled stock avoids cash immobilization and therefore reduces your working capital.
Ask your suppliers for a reasonable spread of payment, without compromising the business relationship. This allows you to finance part of your business with their deadlines.
Today, digital tools considerably facilitate the monitoring and optimization of your working capital.
Bill up is not limited to paying bills: it also offers a intelligent organization of your documents. Once the bill has been paid, the application automatically categorizes by company, project or beneficiary. This instant ranking allows you to:
Thanks to this, you can adjust your cash flow forecasts and manage your working capital in a much more reactive manner.
Integrate indicators into your dashboard such as:
This helps you manage your business in real time.
Effective management of the BFR involves all departments: commercial, accounting, purchasing, logistics. By making them aware of cash flow issues, you strengthen coordination and efficiency.
Optimizing your working capital means gaining financial autonomy, improving profitability and reducing risks. This is based on three main levers:
Tools like Bill Up help you automate and streamline your flows, to cash out more quickly, and to better classify your accounting documents. A modern, practical and effective solution to make your BFR a performance driver, and not a constraint.
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