27/07/2026
A business can make millions in profit and still struggle to pay salaries on time. 💭
How is that possible?
Because profit is not the same as cash.
Working capital management is about keeping the money moving through the business. Cash buys stock, stock becomes sales, sales become customer payments, and those payments return as cash.
The challenge is timing.
If customers take 90 days to pay but suppliers need payment in 30 days, the business may be profitable but still face a cash shortage.
That is why accountants monitor:
📦 Inventory days
👥 Debtor days
🏦 Creditor days
Together, they reveal how efficiently a business converts operations into available cash.
Financial Management is not just about numbers on a statement. It is about understanding what keeps a business alive.
