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Cash Flow Management

This is a presentation on the management of cash. This is particular useful to managers and owners that are looking to improve their cash flow. This discusses many sides of cash flow management covering: - Customers - Customer orders - Order fulfilment - Supply chain management - Invoicing / Credit control - Banking - Cost avoidance. For more solutions see us at

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Cash Flow Management

  1. 1. Cash management Optimise- GB Cash flow management is a vital business survival. Does it matter how much turnover you have, if customers do not pay you?
  2. 2. - Borrowing unnecessarily from the bank - Poor credit rating for not paying suppliers - Unable to expand due to lack of finances - Liquidation / going out of business - Personal problems - Relationship issues Optimise- GB Cash flow issues leads to:
  3. 3. Cash Flow Process Optimise- GB You start spending money as soon as a customer places an order: - Staff to run the business - Premises costs - Stock on hand or to order Customer Order Process Credit Control Invoicing Supplier & Inventory Management Order Fulfilment
  4. 4. Cash Flow Process Optimise- GB 1 Day from order to production line -30 Days supplier payment terms 10 Days to fulfil order 3 Days to send invoice 30 Days credit terms Order to cash cycle as an example is 14 days Customer Order Process Credit Control Invoicing Supplier & Inventory Management Order Fulfilment
  5. 5. - Ensure you know the payment terms of your customers and suppliers - Ensure you know all the Direct Debit payments / BACS transfers - Identify payment dates for VAT and PAYE - Identify all suppliers for utilities, telecommunications - Check your balances each day to review forecast - Flex your costs in line with revenues 1 Cash Flow Forecast Optimise- GB
  6. 6. - Get several quotes to compare prices - Ask for discounts on early payment - Negotiate better payment terms with suppliers - Ensure that you have contracts for large supplier - Only pay for goods when due or pay early if discounts are offered 2 Supplier Negotiation Optimise- GB Cash Flow Process
  7. 7. - Only buy stock when you have a customer order - Ask suppliers for consignment stock - Ensure you use space effectively to reduce storage costs - Do not set up premises too far away from your customers 3 Inventory Management Optimise- GB Cash Flow Process
  8. 8. - Perform a Credit Check on large customers (Experian / Equafax) - Provide discounts for customers to pay early - Be clear about charging interest on late payments - Provide a contract of service and explain payment terms - Identify the best contact to maintain a strong relationship 4 Customers Optimise- GB Cash Flow Process
  9. 9. - Ensure customer orders are worked on as soon as possible - Used scheduling systems to ensure orders are tracked - Quality check goods / services at the point of delivery - Confirm customer is satisfied with the goods / services - Ask accounts to raise an invoice immediately upon delivery - Send invoice with goods / services - Pay staff incentives for good quality, fast order fulfilment 5 Order fulfilment Cash Flow Process Optimise- GB
  10. 10. - Ensure that you invoice immediately after order fulfilment - Make sure that the invoice details are accurate - Make sure you have the right contact name and address - Send the invoice on email as well as the post - Confirm with the customer that they have received the invoice - Confirm that there are no issues with the invoice - Ask when the invoice will be paid 6 Invoicing Optimise- GB Cash Flow Process
  11. 11. - Produce a weekly debtors list and chase debts daily - Sort out invoice disputes before payment terms have been reached - Provide feedback of late payments to relationship manager - Provide customer with payment in instalment options - Consider using a debt collection agency company - Make sure that you do not supply them with any more goods - Request for payments to be made by BACS and not cheque 7 Credit Control Optimise- GB Cash Flow Process
  12. 12. 8 Banking Facilities - Ensure you talk with the bank in regards to your cash flow - Ask your bank on lowering its overdraft fees and banking charges - Benchmark your current banking facilities with others (free period) - Consider debt factoring to give you cash flow a boost - Ensure you have enough funds for two / three months of non-trade - Deposit surplus cash into bonds, high interest accounts etc Optimise- GB Cash Flow Process
  13. 13. - Turn off all electrical appliances at night - Consider energy efficient lights / heating - Reduce travel and use conference / Tele conference facilities - Buy goods only if it has a benefit for the end customer - Do not pay staff for being off sick 9 Cost Avoidance Optimise- GB Cash Flow Process
  14. 14. <ul><ul><li>For solutions </li></ul></ul><ul><ul><li>Contact Simon Misiewicz through </li></ul></ul><ul><ul><li>Email: [email_address] or </li></ul></ul>Optimise- GB