The document discusses cash flow management for businesses. It provides tips on managing cash flow through debt collection, payment of suppliers, monitoring inventory levels, and reducing costs. The document emphasizes creating a cash flow forecast to anticipate potential cash shortages. Overall, the document provides advice to businesses on improving cash flow through better management of sales, debtors, inventory, costs and financial planning.
The changing landscape of business, pressures on cash flow, budgetary cuts and evolving legislation force companies to critically assess how to fulfil their business objectives without compromising their bottom line.
The key to staying afloat in this climate is to closely monitor and improve cashflow especially in the SME sector as small businesses are more vulnerable to changes in economic activity and tend to battle more with cashflow problems in many cases.
To speed up cash collection, especially after providing a service, here are quick practical tips that will help in improving cashflow.
Dynamic Discounting and Late Payments DirectiveSAP Ariba
Is your supply chain at risk due to late payments and restricted supplier cash flow? Does your company have cash earning next to nothing in this low interest rate environment?
In light of the recently effective European Union directive on late payments that mandates payment within a certain time frame, now is the perfect time to consider Dynamic Discounting which allows your suppliers to receive early payments and you to earn a good return on short term cash.
In this session we will discuss some of the key implications of the Late Payments Directive that you need to consider in order to comply, as well as how you can utilize dynamic discounting as a tool not only for compliance, but to earn significant savings as well.
The changing landscape of business, pressures on cash flow, budgetary cuts and evolving legislation force companies to critically assess how to fulfil their business objectives without compromising their bottom line.
The key to staying afloat in this climate is to closely monitor and improve cashflow especially in the SME sector as small businesses are more vulnerable to changes in economic activity and tend to battle more with cashflow problems in many cases.
To speed up cash collection, especially after providing a service, here are quick practical tips that will help in improving cashflow.
Dynamic Discounting and Late Payments DirectiveSAP Ariba
Is your supply chain at risk due to late payments and restricted supplier cash flow? Does your company have cash earning next to nothing in this low interest rate environment?
In light of the recently effective European Union directive on late payments that mandates payment within a certain time frame, now is the perfect time to consider Dynamic Discounting which allows your suppliers to receive early payments and you to earn a good return on short term cash.
In this session we will discuss some of the key implications of the Late Payments Directive that you need to consider in order to comply, as well as how you can utilize dynamic discounting as a tool not only for compliance, but to earn significant savings as well.
Lawyers - Managing your risk by building great client relationshipsPeggy Gruenke
Giving you ideas and tools to help you be proactive about avoiding a malpractice claim and to help you grow your practice by creating habits focused on building great client relationships. The presentation includes:
- Client Intake and Selection
- Conflict Checks
- Fee Agreement Contracts
- Non-Engagement, Disengagement and Thank You Letters
- Managing Client Documents
Audaxis a mis en place un projet OpenERP dans une université avec comme spécificité la finance pour le secteur public : gestion budgétaire multi-départements, gestion des régimes mixtes de TVA, gestion de la comptabilité et des budgets publics.
Lawyers - Managing your risk by building great client relationshipsPeggy Gruenke
Giving you ideas and tools to help you be proactive about avoiding a malpractice claim and to help you grow your practice by creating habits focused on building great client relationships. The presentation includes:
- Client Intake and Selection
- Conflict Checks
- Fee Agreement Contracts
- Non-Engagement, Disengagement and Thank You Letters
- Managing Client Documents
Audaxis a mis en place un projet OpenERP dans une université avec comme spécificité la finance pour le secteur public : gestion budgétaire multi-départements, gestion des régimes mixtes de TVA, gestion de la comptabilité et des budgets publics.
1. Andrew Guerin FCPA AITI
Andrew Guerin Associates.
www.aguerin.ie
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 1
2. Managing cash flow for Businesses
Personal cash flow issues
Own Personal experiences
Revenue Commissioners
Tax planning
Personal financial planning
Bank negotiations
Wealth management
Future of Euro
Budget 2012
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 2
www.aguerin.ie Phone 021-4840721
4. Cash is King
Profit V Cash
Profitable businesses will always survive !!
What happens if profit is tied up in working capital ?
Stock, debtors, work in progress
Impact of bad debts !!
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 4
www.aguerin.ie Phone 021-4840721
5. “Cash flow is the movement of
money in and out of the business”
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 5
www.aguerin.ie Phone 021-4840721
6. Cash
Debtors
Purchases
Sales
Stock
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 6
www.aguerin.ie Phone 021-4840721
7. •Regular management meetings
•Debtor management
•Supplier / creditor management
•Stock control
•Cost management
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 7
www.aguerin.ie Phone 021-4840721
8. •Short term funds
•Long term funds
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 8
9. •Cash generated within business(profits)
•Trade creditors
•Bank overdraft
•Leasing/hire purchase
•Debtor financing
•Employment and R & D grants
•Invoice discounting
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 9
10. • Retained profits
• Equity investors/Share capital
• Long term leases
• Capital grants
• Business expansion scheme EIIS
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 10
12. Document in house collection procedures
Assign responsibility for implementation
Encourage up front payments
Offer discounts for Early payment
Monitor credit limits regularly
Use internet banking
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 12
14. Bill early( ideally before completion)
Issue invoices early and follow up with monthly
statements
We frequently get what we deserve !!!
Problems frequently arise on issuance of invoices for
services provided but forgotten
Cash on delivery
Get paid while still needed (once goods or services
provided supplier is no longer priority)
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 14
15. Get deposits for new and or bigger orders
Consider invoice discounting
Accept post dated cheques
Re-present bounced cheques(talk to bank)
Accept/encourage electronic payment
Arrange early face to face meetings to resolve accounts
in dispute.
Don’t accept current perceived entitlement to discount
Accept debit/credit cards
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 15
16. Avail of credit terms
Negotiate discount for early payment ( cash !!)
Continually review costings (look for 3 quotes)
Pay electronically
Switch utility suppliers
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 16
17. Surplus stock incurs unnecessary costs including bank
interest, insurance premises.
Monitor stock turnover(purchases/stock)
Identify slow moving stock and dispose of
Monitor security procedures to minimise pilferage
What are the optimum stock levels
Consider just in time.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 17
18. Identify Key cost Drivers
Review all cost categories
Implement action plan to reduce business costs
Spread larger cost including insurance over
year.
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 18
19. Sales
Purchases
Gross profit margin
Net profit margin
Stock turnover(stock/net purchases)
Debtors days (debtors/gross sales per day)
Creditors days (creditors/purchases per day
Monthly cash payments
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 19
20. Why !!!
Will help predict cash shortages thereby enabling
businesses arrange funds to ensure that sufficient
funds are available during these periods to sustain the
business.
The days of ringing the bank to increase the overdraft
facility temporarily are now a distant past. Those were
the days !!
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 20
21. Cash flow statement is similar to the profit and loss account with
a few notable differences including:
P & L figures are historic
Cash flow statements usually are projections for the future.
Cash flow statement ignore amounts due and reflects expected
cash receipts and payments i.e . It reflects what is expected to
go through the bank.
P & L accounts are vat exclusive if the business is registered
for vat. The figures in cash flow statement are vat inclusive.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 21
22. • Discuss with accountant
• Use the previous years P & L account as starting
reference
• Project figures for next 12 mts
• Use an excel template or accounting package
• Keep up to date
• Anticipates potential cash shortages
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 22
23. Estimate sales and cash receipts for next 12 months.
Quantify costs including loan repayments ,tax
payments, leasing , capital expenditure etc.
Include no trading receipts including grants, tax
rebates, loans received capital and revenue grants.
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 23
24. €
Cash receipts 50,000
Cash payments 70,000
Surplus payments 20,000
Opening Bank Balance 25,000
Closing Bank Balance 5,000
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 24
25. Simple Cash Flow projection
3 months to 31 march 2012
Month Jan-12 Feb-12 Mar-12
€ € €
Income
Sales receipts (vat inclusive) 10000 8000 4000
Vat refunds 2000 0 1000
Grants received 0 0 5000
Total cash received 12000 8000 10000
Less cash payments
Wages 6000 6000 6000
Rent 2000 2000 2000
Miscellaneous expenses 5000 4000 4250
Total payments 13000 12000 12250
Surplus payments over receipts -1000 -4000 -2250
Bank Summary
Opening bank balance 10000 9000 5000
Surplus payment over receipts -1000 -4000 -2250
Closing Bank Balance 9000 5000 2750
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 25
www.aguerin.ie Phone 021-4840721
26. MAY JUN JULY AUG SEPT OCT NOV DEC JAN FEB
11 11 11 11 11 11 11 11 12 12
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 26
27. Be ruthless
Take immediate action/don’t delay
Directors loans/personal cash injection
Avoid personal guarantees
Be pro active
Talk to creditors
Agreement with creditors
S 201 arrangements
Examinership
Liquidation
Andrew Guerin Associates-Business and Taxation Advisers
www.aguerin.ie Phone 021-4840721
21 May 2012 27
28. Collect/ agree fee before conclusion(Revenue audit)
Test the water (small invoice)
Letter of engagement/documentary agreement
(court case)
Bank relationships (bounced cheques)
Advance agreement
Tyre kickers (Numerous previous agents)
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 28
29. Foreign customers (Dutch partnership)
Monthly statements
House renovation (invoices)
Black economy
Issuance of invoices before completion
Timing of collection
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 29
30. Corporate V Sole traders/partnerships
Corporate tax rate 12.5%
Tax breaks for new companies
Salaries for spouses/partners in family businesses
Children's salaries in family businesses
Company cars
Claiming civil service mileage rates
Bes relief
Research and development credits
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 30
31. 4year rule for claiming tax refunds
Medical expenses and other tax credits
Basis for accounting for vat
Recovering vat on bad debts
Entertainment expenses
Timing of tax receipts
DD for tax payments
Electronic tax filing
Revenue online & Paye Anytime
Loss relief
5/10 % surcharge (File & don’t pay !!)
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 31
32. Electronic returns
Electronic payments
Paye,Vat, CT, IT, RCT,Capita taxes
Revenue Audits
Instalment arrangements
Post dated cheques
5/10% surcharge
Revenue E brief 71/11 Tax payment difficulties
Andrew Guerin Associates-Business and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 32
33. Tracker mortgages to preserved at all costs
Life assurance
Transferring properties to Companies
Creating group structure/inter co financing
Golden shares for group structure
Revenue settlements
Tax deferrals
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 33
35. Limited funding
Will fund businesses that are viable and have strong cash
flows
Restricting/reducing credit for struggling businesses
Detailed management information required including
monthly accounts, projections, debtors listings etc.
Repayment capacity key lending criteria
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 35
36. Surviving businesses will be leaner, with cash
retention, good monitoring systems , and strong
management.
Be pro-active
Bank want to see owners funds in business.
Want evidence that business is capable of returning to
solvency in foreseeable future.
Identify new opportunities /markets.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 36
www.aguerin.ie Phone 021-4840721
37. o Detailed documentation
o Strong management
o Tax clearance
o Copy of premises lease if leased by individual
to Company
o Attitude softening in relation to loan
repayments on property transactions
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 37
38. Will probably be determined at the EU leaders
summit in Brussels next Friday.
Collapse will obviously have major
repercussions for everyone and doesn’t bear
thinking through.
Lets hope the European leaders come to an
eventual agreement before its too late.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 38
www.aguerin.ie Phone 021-4840721
39. Return on investments
Dirt rates
Potential devaluation
Foreign currencies
Exchange rate risks
Current deposit rate in excess of 4% unsustainable
Spread deposits to benefit from €100 k
Government guarantee.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 39
40. How accountants operate
Basis for charging
Avoid bottlenecks
Provide all relevant information
Minimise accountants time on routine work and get
advice on growth ,potential savings, tax planning and
strategic management
Added value services
Obtain written recommendations
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 40
41. Consider audit exemption
Company V Sole Trader
Review annual letters of audit findings and
letters of recommendation
Agree /document and monitor an action plan
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 41
42. Vat rate up 2% to 23% from 01/01/2012
Property Tax €100. Will increase in future
Prsi extended to unearned income including
rental ,deposit interest and other investment
income
Dirt increased to 30%
Capital gain tax
Capital acquisitions tax
Andrew Guerin Associates-Business and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 42
43. BES /EIIS investments
Film investments
Pension Top ups
Corporate Pensions - 4 year time limit for
overlooked tax claims
File outstanding tax returns to avoid surcharge
increasing from 5% to 10%.
Make negligible value loss relief claims.
Andrew Guerin Associates-Business and Taxation Advisers
21 May 2012 www.aguerin.ie Phone 021-4840721 43
44. Know your key performance indicators
Prepare monthly management accounts
Continually review your cash flow projections
Match short /long term funding to nature of
expenditure.
Keep bank on board
Stay ahead of the dreaded tax man
Andrew Guerin Associates-Business and Taxation
21 May 2012 Advisers www.aguerin.ie Phone 021-4840721 44
45. Sales are vanity
Profit is sanity
Cash is reality
Andrew Guerin Associates-Business and Taxation
21 May 2012 45
Advisers www.aguerin.ie Phone 021-4840721
46. As outlined at the start of this presentation one of
the oldest proverbs in business is
“Cash is King”,
this is still very much the case and will be tested
to the limit over the next few days , weeks and
months.
Andrew Guerin Associates-Business
and Taxation Advisers www.aguerin.ie
21 May 2012 Phone 021-4840721 46