Effective management of current assets of the enterprise is an important aspect of the financial policy of the organization. Unlike non-current, working capital is almost entirely responsible for the solvency of the company in current activities and provides the best rate of return.
The current assets management policy represents a set of measures that are aimed at optimizing and rationalizing the composition, sources and volume of financing of working capital in order to increase the efficiency of its application.
Management of current assets of the enterprise aims to increase the profitability (profitability) of working capital (maximize profits) and ensure sufficient and sustainable solvency of the enterprise. To some extent, these goals are opposed. If you look carefully, to increase profitability, you should invest monetary assets in various types of working capital with a predetermined lower liquidity compared to cash . And in order to ensure a steady level of solvency, an enterprise must constantly have in its account a certain amount of money for making current payments, which it thus actually withdraws from circulation, or this part of the funds must be placed in the form of highly liquid assets.
Management of current assets should solve the problem of their insufficiency. One of the main reasons for the lack of working capital is the lack of stability in the supply of raw materials. Often improperly organized procurement leads to the supply of tens of times more raw materials than the daily consumption rate requires. Volley payments are made, which lead to the diversion of a huge amount of working capital.
The company often faces the problem of non-payments, which also affects the volume of working capital. Management of current assets is designed to solve this problem. Each company should classify its creditors by the term of the debt, and also determine who should be paid in the near future, who could wait for some more period, and who, maybe, should not pay at all.
In the first place in this list are payments to commercial banks on loans, as well as tax payments to the budget. Lack of time in this case is fraught with serious penalties.
Effective management of current assets allows the company to pay for labor and raw materials, to carry out costs that are associated with sales and production activities. To do this, we have to solve the following problems.
The main problem, the solution of which will significantly replenish the company's current assets, is a rational inventory management. Many Western economists argue that nothing affects the sufficiency of working capital as much as the rate of turnover of inventory.
The second aspect of solving the problem of increasing the volume of current assets is the improvement of the settlement system of the company. Management of current assets in this case includes measures to expedite settlements. To do this, compile a register that will contain information about all payers, contractual amounts, settlement dates and other parameters. At the same time, it is necessary to assume from whom the delay should be expected, and for how long, and who may not pay.
The state of the economy in the state has a great influence on the state of working capital. So, in the transition period, many enterprises were faced with a shortage of current assets. This was influenced by rising prices, a general drop in production and other factors.
In market conditions, new management models should be introduced , which should be adopted by enterprises.