Working capital is a financial measure commonly expressed as current assets minus current liabilities. Procurement and accounts-payable decisions can influence inventory, payment timing, supplier terms, continuity, and cash needs, but they operate within broader finance and treasury policies. Procurement reporting should not claim working-capital improvement without agreed finance methodology, period, baseline, and attribution.
In plain English
It reflects short-term financial resources available to run the business.
Illustrative example
At Northstar Industrial Systems, finance and procurement evaluate payment terms and inventory effects together, using an agreed method before attributing any change to a sourcing decision.
- Related terms
- Payment terms; Accounts payable; Inventory; Cash conversion cycle
- Lifecycle stages
- Strategy; Execute; Invoice
- Stakeholders
- Finance; Procurement; Executive leadership