The Times 100 Business Case Studies

advertisement
The Times 100
Business Case Studies
Edition 15
Controlling cash flow for business growth
CIMA
Introduction

CIMA – the Chartered Institute of Management
Accountants




The world’s leading professional body for management
accountancy
Has over 172,000 members in 168 countries
Offers the most relevant financial qualification for business
Management accountants



Involved in all sectors of industry
Often in high level roles
Forecast, monitor trends and control cash
flow
Cash flow

Cash is vital to longer term trading




Cash inflow from eg sales
Cash outflow from eg costs of goods or labour
More money spent than received = negative cash
flow
Cash is a ‘liquid asset’


Available for investment
Avoids having to seek credit or
loans
The cash flow cycle

Balances cash inflow
against cash outflow

Lack of cash can:


lead to business
failure
affect the business’
reputation
Improving cash flow

Businesses need to manage cash flow

Pay as little interest as possible




Pay debts on time; consolidate at low interest
Negotiate payment terms with suppliers
Avoid offering discounts
Make better use of assets

eg hire out warehouse space
Benefits of effective
management accounting





Reduces uncertainty
Helps to predict and plan for the future
Ensures enough cash to cover debts or
possible shortfalls
Reduces unnecessary costs
Makes cash work for the
business
Download
Related flashcards

Business

28 cards

Labor

14 cards

Free business software

44 cards

American producers

28 cards

Create Flashcards