Working capital funding

Allot of time company look for external borrowing to fund working capital. But with current economic this will be a challenge. Company need to raise cash organically to fund their working capital. This require allot of skills in holding customer accountable to AR Term, Increase Inventory Turn and challenging your vendor for better credit term.

My advice – If you are in service sector make sure you delivery and bill or service faster. This will reduce the turn around time and free up working capital.

Plant and Equipment

Investment in P&E is important for future growth and NPI. But it is very important to manage this investment carefully. This is because you need to spend cash before you see full benefit from this investment.

My advice – Rule of thumb your investment $ should equal to depreciation cost, by this your balance sheet will be inline with profit and statement.

Working with Government Tax Department

Any business needs to file tax on yearly basis. Tax is becoming more complicated area where finance manager need to focus. Also it very challenging to match all the requirement from tax department. In very government organization tax department always has additional resources to conduct audit and crosscheck all filling. We need to work smart to match tax department resources, queries and filling.

My suggestion – If you are small company call your tax agent on how to implement a month process for tax requirement. For large organization get a tax expert in the country and have them to do your filling.