Working capital
See what sits between profit and cash.
What customers owe, the value held in stock and production, and what is owed to suppliers — for each company at a stated date, with days outstanding and the cash conversion cycle.
Working capital example
Working capital example
One company, one date, one measure.
Receivables, stock and work in progress, less supplier balances — with recorded cash shown separately.
- Customer invoice balances outstanding
- £3,140,200
- Includes £486,900 overdue — part of this total, not an addition to it.
- Raw materials and finished goods
- + £1,606,300
- Stock held, excluding work in progress.
- Work in progress
- + £364,200
- Production started but not completed. Not counted in the line above.
- Supplier balances outstanding
- − £2,061,800
- Illustrative operating working capital
- £3,048,900
The measure used on this page only. It is not net current assets and not a complete financial-position measure.
- Recorded cash in the company's bank accounts
- £4,820,400
- Not part of the measure above.
What is included, and what is not
Included: what customers owe, the value held in stock and production, less what the company owes suppliers.
Excluded: cash, payroll and tax balances, VAT owed to or by the tax authority, loans, accruals and prepayments.
In the product, the working capital screen reads receivables, supplier balances and stock for the selected company at a stated date, with days sales outstanding, days payable outstanding, inventory days and the cash conversion cycle. A ratio without enough trading history is shown as not measurable, never as zero.
A snapshot of balances does not on its own explain the difference between profit and cash. Comparing balances between dates, alongside completed cash-flow analysis, is how that is investigated.
Fictional example: Northgate Components Ltd, a single UK company, GBP, balances at 30 April 2027. Not customer data.
Receivables
What customers still owe.
- Not yet due
- £2,653,300
- 1–30 days overdue
- £304,100
- 31–60 days overdue
- £118,600
- Over 60 days overdue
- £64,200
- Total outstanding
- £3,140,200
Ageing uses each invoice's due date at 30 April 2027.
- Customer receipts collected
- £1,806,240
- A movement during April, not part of the balance at 30 April.
Balances, not revenue
Balances are what customers still owe on issued invoices: VAT included, less credit notes and receipts already allocated (the fictional example's assumption). Revenue is reported separately, excluding VAT.
The collections worklist ages each open item by days overdue and opens the customer record.
Stock and production
Understand the value held in stock and production.
- Raw materials
- £604,800
- Work in progress
- £364,200
- Production started but not completed.
- Finished goods
- £1,001,500
- Completed goods awaiting sale.
- Total carrying value
- £1,970,500
Value held, not cash
Carrying value is the recorded cost of stock and production at weighted average cost. It is not cash already paid, and it is not what the goods will raise when sold.
Work in progress is a stock state in the same inventory records, so it is never counted twice.
Supplier balances
What is owed, and when it falls due.
- Due within 7 days (1–7 May)
- £412,600
- Due in 8–30 days (8–30 May)
- £771,900
- Due in 31–60 days (31 May–29 June)
- £562,400
- Due beyond 60 days (after 29 June)
- £314,900
- Total supplier balances
- £2,061,800
No supplier balances are overdue in this example. Each invoice falls in exactly one period.
Due is not paid
An invoice due date says when a supplier expects payment. It is not an approval and not a payment.
Approving a payment, handing it over for payment, and recording settlement when the bank confirms it are separate steps. A balance stays owed until settlement is recorded.
In the product, supplier balances are aged and overdue items are listed with days late.
Operating cycle
How a goods business ties up and releases working capital.
- Stage 1
Buy on supplier credit
Materials or goods arrive; a supplier balance is created and falls due later.
- Stage 2
Hold stock or production
Value sits in stock, or in work in progress for businesses that make things.
- Stage 3
Sell
An invoice is issued and a customer balance is created.
- Stage 4
Pay suppliers
Cash leaves when supplier payments are settled.
- Stage 5
Collect from customers
Cash arrives when customers pay.
The order of paying suppliers and collecting from customers varies. Supplier terms can be longer or shorter than customer terms, so cash may leave before or after it comes back. Not every business holds work in progress.
Intelligence and payments
Ask about the position. Keep money movement separate.
SynqLedger Intelligence
Can answer what is tying up working capital — receivables, supplier balances, stock and unapplied cash — and report days sales outstanding, days payable outstanding, inventory days and the cash conversion cycle, naming any ratio it cannot measure. It can also read completed cash-flow analyses. It explains and suggests; it cannot post journals, approve actions, move money or change records.
About IntelligencePayments
Outgoing supplier payments and incoming customer receipts follow separate steps: authorisation, payment handling, recorded settlement and accounting. Available in Sandbox. Live money movement is not enabled.
Payment OrchestrationBenefits
What finance and operations teams get.
Review outstanding customer balances
Balances aged by due date, with overdue amounts shown inside the total.
Understand value held in stock and WIP
Raw materials, work in progress and finished goods at recorded cost.
See supplier balances and due dates
What is owed, when it falls due, and what is overdue.
Investigate changes in operating working capital
Compare balances and ratios between dates to decide where to act.
Connected across the platform
Related areas.
- Customers & RevenueCustomer invoices, receipts and collections.
- Inventory & OperationsStock quantities and value at weighted average cost.
- ManufacturingWork in progress from materials to finished goods.
- Procurement & SpendSupplier invoices and approvals.
- Cash & TreasuryRecorded cash, expected movements and reconciliation.
- Finance & AccountingThe ledger these balances come from.
- Management AccountingCash-flow analysis, budgets and forecasts.
- Group & Multi-entityCompany results read together; company ledgers unchanged.
See working capital in action
A guided walkthrough of the working capital, receivables, supplier and stock views in a sandbox company.