Cash is King... Cashflow management. Working capital

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Transcript of Cash is King... Cashflow management. Working capital

  • Slide 1
  • Cash is King... Cashflow management
  • Slide 2
  • Working capital
  • Slide 3
  • Slide 4
  • Debtors: speed up cash collection Put in place credit control procedures Check invoices are being paid before they are due Get commitment re payment date Speak to the customer if invoice is likely to be contentious Dont include lots of work on one invoice Dont leave invoicing til month end Concentrate production resources on items which can be completed and billed in the month Interim bills? Put cash collection at the top of YOUR priority list Be hard with non paying customers STOP Credit checking and credit limits
  • Slide 5
  • Stock Clear out old stock even if at a loss, convert to CASH Speak to suppliers just in time/consignment stock/return unwanted stock Resource locally if exchange rate, transport costs, minimum order quantities and payments in advance are an issue Extend credit taken from suppliers
  • Slide 6
  • Why forecast? To quantify how much cash you need To be on the front foot in discussions with your bank To see if you are going to breach banking covenants To help fulfil your legal obligations as a director To force you to review every aspect of your business
  • Slide 7
  • Tax Get accounts done quickly if theres a loss File VAT returns on time and pay by direct debit for an extra 10 days credit For self employed, can you reduce your payment on account? HMRC more accommodating in cases of difficulty making tax payments
  • Slide 8
  • Be ruthless in your review of cost Make cash YOUR priority Strong leadership is vital this is YOUR job Take control of the cheque book Take security for directors loans Do you have surplus assets you could sell? Other tips
  • Slide 9
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