In 100 words or more reply to statement below about working capital generates cash flow

Working capital generates cash flow by businesses keeping accurate financial records. Good bookkeeping helps a company make the right decisions when spending money and it helps optimize accounts receivable/accounts payable tasks so that the business invoices customers correctly and in a timely manner to further generate cash flow. In addition, accurate financial statements helps generate cash flow because a clear statement allows for a business to make smarter inventory management decisions. A business must have the right amount of inventory to satisfy sales orders without sinking too much money into buying products that won’t move off the shelves fast enough. Another thing to consider is how you are investing in your company. Owners should make sure that they’re purchasing equipment and products that are essential to operations and business growth not just throwing money away on the newest innovations that won’t have a significant impact on processes. Also, consider whether it is the right time to acquire debt from bank loans for business expansion, if the business acquires too much long-term debt that can make it difficult for your business to eventually repay.