Working capital management refers to the process of managing a company's short-term assets and liabilities in order to ensure that it has sufficient liquidity to meet its operational needs. This includes managing the company's cash, accounts receivable, inventory, and accounts payable.
Optimal working capital management involves finding the right balance between having too much working capital, which ties up resources and reduces profitability, and having too little working capital, which can lead to liquidity problems and financial distress.
Financial constraints can have a significant impact on a company's ability to manage its working capital effectively. For example, if a company has limited access to credit, it may have difficulty financing its inventory or accounts receivable, which can affect its ability to meet customer demand or take advantage of supplier discounts. Similarly, if a company has a high level of debt, it may be required to maintain a higher level of working capital to meet its debt service obligations, which can also impact profitability.
To address financial constraints, a company may need to take steps such as improving its creditworthiness, negotiating more favorable terms with suppliers or lenders, or finding alternative sources of financing. It may also need to implement more efficient working capital management practices, such as streamlining its accounts payable process or using just-in-time inventory management techniques, in order to reduce the amount of working capital it needs to hold.
Company perspective
- The company will be able to optimize the asset site of its balance sheet, by
- Optimizing working capital using PRI® CrediSoft;
- Monetizing open account receivables through PRI® inside;
- And will be able to reduce funding costs
- As part of the trade-off between direct payment of invoices of creditors and payment discount optimizing the credit site of the balance sheet using PRI® Supply Chain;
- And creditors will monetize the account receivables and in addition can optimize working capital using PRI® CrediSoft.
Qube added value
- Qube Financing (and its affiliates) have developed the Qube platform, supported by its proprietary PRI® inside infrastructure, front-end to back-end fully automated receivables financing platform (“Qube Platform”), as one of the earlier Fintech 3.0 initiatives in the market and is fully equipped to be the winning platform of the third wave.
- This Qube Platform is fully operational and has been fully adopted by institutional investors, including the standardized procedures, ‘modus operandi’ and underwriting process steps & criteria.
- Qube targets European SME and Mid Market Corporates with a fully standardized approach as well as tailored solutions for multinationals, predefined underwriting criteria that are agreed with institutional investors and supported by PRI® inside and the add-on credit & collection management application PRI® CrediSoft and PRI® Supply Chain.
- Offering consolidated multi jurisdictions multi operating companies fully automated working capital financing solutions based on invoiced turnover, whereby PRI® inside directly interfaces with the Corporate's ERP systems, the Connection.
- The Qube Platform benefits from a modular design and standardized processes and legal infrastructure.
- US version of PRI® infrastructure can be calibrated for US time zone and jurisdiction.