Working capital management for operators in the day nursery sector primarily consists of achieving the right balance between accounts payable (such as key supplier payments) and accounts receivable (collection of outstanding fees). If these areas are managed effectively, it could be a key source of liquidity for your business.
Some businesses may be tempted to use short-term fixes in order to improve their working capital position. Common examples might be temporarily delaying payments to key suppliers, or imposing tighter payment terms on parents. While this may improve your cash position in the short term, the long-term effects could be damaging for your business. Continued delay of payments could lead suppliers to revise their prices upwards, while parents may consider moving their child to another setting where the payment terms meet their own needs more effectively.
Register now to continue reading
Thank you for visiting Nursery World and making use of our archive of more than 35,000 expert features, subject guides, case studies and policy updates. Why not register today and enjoy the following great benefits:
What's included
-
Free access to 4 subscriber-only articles per month
-
Unlimited access to news and opinion
-
Email newsletter providing activity ideas, best practice and breaking news
Already have an account? Sign in here
