It's four and a half years now since I started an enterprise with a close friend and classmate, and it has been one rollercoaster ride all the while! I've been thinking a lot lately about what I've learnt from the experience, and decided to write down my thoughts in a series of intermittent blogs. Today's topic - The importance of working capital I'm writing from the perspective of running an unfunded services business in India (the laws and practices might be different in other countries). Requirement of working capital is obvious in a product-development environment but more insidious, and harder to justify, for us services guys. Let me build up the perfect storm pointwise: 1. Accrual accounting: I had no idea what this term meant before I started out. It means simply that the incomes and expenses for a time period are calculated based on the invoices issued during that period, and not the actual cash flows. So, in a year if I have done work and invoiced projects