The Times 100 Business Case Studies


The Times 100

Business Case Studies

Edition 15

Controlling cash flow for business growth



CIMA – the Chartered Institute of Management


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