Working capital

Generally your assets (cash on hand, accounts receivable and inventory) minus your liabilities, but in general terms your own funds available for use in the daily operation of your business. The contents of your bank accounts and so on.

If you are a bank, money you receive in deposits contributes to your working capital. You can’t use all of it (some you have to set aside as regulatory capital), but nor do you have to put the rest of it in little box on your safe with the depositor’s name on it.

You would be surprised how many well-paid people who should know this, don’t.

Client money is working capital too

Client money, from the bank’s perspective, is a regular deposit and contributes to working capital. Client money defines the depositor’s claim on the cash, not the bank’s.