Working Capital Management Research Based On Business Process Management

With the environment of global competition, the enterprises'demand on working capital is becoming more and more strongly. The working capital management has been an important business management activity. On the basis of business process management, this paper analyzes the mechanism affecting the working capital management and builds the models of working capital management. And then, this paper proposes the innovation modes of working capital management which are also based on the business process management.This paper combines working capital and business process. First, this paper analyzes the relationship among business process, activity and working capital. The business activities are composed of three core processes, including purchasing process, production process and marketing process. The working capital, which circulates with the business process, is input from the purchasing process and recovered from the marketing process. The objects of the business process management are activities. Each activity connects with working capital, so the working capital management should begin from the activities. Second, by the analysis of relations between days of working capital and business process, models of days of working capital are proposed based on activities and business process. In these models, the defferences between days of working capital are resulted from accounts receivable, payable, prepayment and advance from customers. Third, on the basis of models, the impacts of activities management on working capital are analyzed from four points, including activity analysis, activity structure, activity term and activity combination. The impacts of business process management on working capital are analyzed from three processes, including purchasing process, production process and marketing process. Fourth, the innovation modes of working capital management based on business process management are proposed by channels. The enterprises apply to different working capital management modes because of business type and scale.In the ending of this paper, combined with the previous study, conclusions are drawn. The working capital management based on business process management is comprehensive, decentralized, timely and harmonious. This paper also proposes the prospects of working capital research, which will be continued in the terms of channel management. The final object of this research is to build an systemic theory to explain the influence factors of working capital management and to make contributions to the enterprises'working capital management.