5 steps to build a working capital plan for SMEs

2 min readAug 31, 2021

It is important to plan working capital efficiently to manage operational expenses and to meet long term funding requirements.

Let us understand the steps towards building a working capital plan for SMEs

1. Analyze the long term and short-term fund requirements

For effective working capital planning the short-term funding needs (like payroll, rent, etc) and long-term funding needs (like purchase of machinery and real estate, etc) should be checked and assessed.

2. Analyze scenario

You may analyse your external and internal environment by running a SWOT (Strength Weakness Opportunity and Threat) analysis. Check if there are sufficient funds to manage operational expenses (salary, utility, vendor payments and more) and if you have sufficient funds or source of funds available for further expansion.

3. Review, analyze and automate account receivables and payables

It is a good practice to review the accounts receivables and payables status to analyze and make plans effectively. Hylobiz is a fintech, helping SMEs and other businesses strengthen solvency with efficient working capital management. You can integrate your accounting software/ ERP seamlessly with Hylobiz. The real time dashboard enables you to understand the status of receivables and payables. Hylobiz can help you digitize and automate your account receivables and payables and help you recover from negative cash flow situations. Sign up for free.

You can create, upload, and send branded invoices. You can collect payments digitally through multiple payment modes supported by automated payment reminders. The integrated payment solution on Hylobiz enables you to pay out on time. The static payment links can enable you to collect fixed amounts from multiple clients at regular intervals or in a certain period.

4. Evaluate the access to working capital and find the funding sources and alternatives

Hylobiz connected ERP and connected banking enable easy track of accounts receivables and payables, ensure quick settlements and reconciliation, faster payment and collections, better inventory management and offer invoice discounting and loans. Invoice discounting helps getting loans against accounts receivables.

Hylobiz ke saath you can access working capital loans from its lending partners Bajaj finance and Neogrowth Credit Pvt Ltd. The real time dashboard and automated reports display the accounts receivable which acts as a collateral for loans

5. Update the plans on regular basis

Businesses need to review their financial positions and working capital status periodically and improvise the working capital plans.