Working capital is the heartbeat of every SME—it shows how efficiently your business can meet short-term obligations while keeping daily operations running smoothly. Yet many owners only glance at their bank balance, missing the full picture of what drives liquidity.
Here’s a practical look at the key working capital numbers every SME should watch, and how automation tools like ccMonet help keep them visible in real time.
Formula:
Current Assets ÷ Current Liabilities
A current ratio between 1.2 and 2.0 generally indicates healthy liquidity—enough to cover payables without tying up too much cash in inventory.
Too low means cash strain; too high may signal idle assets.
How ccMonet helps:
AI reconciliation keeps all receivables, payables, and balances updated daily—so your ratio reflects today’s position, not last month’s books.
Formula:
(Trade Receivables ÷ Credit Sales) × 365
This measures how long it takes to collect payments.
The goal: shorten the gap between invoicing and collection.
Why it matters: Slow collections choke working capital, especially for SMEs with thin cash buffers.
With ccMonet: Invoices are auto-tracked, overdue ones flagged instantly, and receipts matched automatically—helping you follow up before delays grow.
Formula:
(Trade Payables ÷ Purchases) × 365
This shows how long your business takes to pay suppliers.
Ideally, payables and receivables move in balance: you collect before you pay.
With ccMonet: Supplier invoices upload directly from email or mobile, allowing you to plan payments by due date—keeping cash predictable and avoiding missed discounts or late fees.
Formula:
Cost of Goods Sold ÷ Average Inventory
Low turnover means stock is moving slowly and tying up capital.
High turnover signals healthy demand and efficient restocking.
ccMonet Advantage:
AI links supplier invoices, production data, and sales automatically, giving live insight into inventory value and its impact on working capital—without manual tracking.
Formula:
Receivable Days + Inventory Days – Payable Days
This metric ties everything together—it measures how long each dollar stays tied up before returning as cash.
A shorter cycle means stronger liquidity and more flexibility for growth.
With ccMonet: Because data syncs automatically from invoices, receipts, and bank feeds, CCC updates in real time—no manual recalculation needed.
Formula:
Current Assets – Current Liabilities
It’s the headline number showing how much liquidity your business actually holds.
Negative NWC doesn’t always mean trouble (especially for fast-turnover businesses), but tracking trends matters.
With ccMonet: Daily reconciliation across bank accounts and payables gives SMEs a live, accurate NWC view—without waiting for month-end reports.
Your working capital snapshot tells you where you stand; your forecast tells you where you’re going.
By combining real-time inflows (customer payments) and outflows (supplier bills, payroll, GST), ccMonet’s AI Insights can predict when liquidity might tighten—so you can act before it happens.
Ten minutes a week keeps you audit-ready, cash-smart, and growth-focused.
Working capital isn’t just accounting—it’s strategy.
With ccMonet, SMEs can monitor liquidity, automate reconciliation, and maintain real-time control over every moving part of their cash cycle—clean data, clear insight, confident decisions.
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