All business enterprises have an essential need for working capital. Businesses use cash to pay labor, buy materials, pay the utilities, and find the next sale. No business can continue to exist long without sufficient working capital.

Working capital is the phrase used to describe the funds available to meet the needs of the day-to-day operations of businesses. Daily sales produce cash and checks that are deposited into the bank. Credit card sales are deposited into the business account a few days after the sale. Some clients pay in advance for future delivery while some buy on credit and pay in 30 days. These are all sources of working capital.

Most businesses pay their employees at least every two weeks. Some suppliers ...

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