Harnessing the Potential of Artificial Intelligence in Working Capital Management: Some Considerations

Efficient working capital management (WCM) creates value for both management and shareholders by enhancing cash flows and reducing investment in receivables and inventory. It supports liquidity and minimizes financial distress risks, aligning with the goal of shareholder value maximization. However, traditional manual approaches to WCM are no longer sufficient due to the rapid and complex changes in economic and business environments. As a result, firms increasingly rely on artificial intelligence (AI) in WCM. AI offers advanced capabilities in prediction, monitoring, and problem-solving by processing vast data, identifying variable relationships, and adapting to change faster than human cognition. This paper explores the fundamentals of WCM and AI, their interconnections, and the strategic opportunities AI introduces to optimize WCM in modern enterprises