Description
 

Cash flow management is a critical aspect of running a successful business, as it directly impacts a company's ability to pay bills, invest in growth opportunities, and weather financial challenges. Both internal and external factors can affect a business's cash flow, making it essential to understand and address these factors in order to manage cash flow effectively.

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Internal factors, such as excess spending, inefficient operations, and poor credit control, can all contribute to cash flow problems. For example, investing too heavily in production capacity or holding excessive inventory can tie up cash and limit a business's ability to invest in other areas. Allowing customers too much credit or overtrading can also lead to cash flow problems, as can unexpected economic or business changes, such as a sudden drop in demand.

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External factors, such as geopolitical events, natural disasters, and global economic trends, can also have a significant impact on cash flow. Recent events such as the Ukraine war, supply chain disruptions, and rising oil prices have highlighted the vulnerability of businesses to external events beyond their control. These events can cause fluctuations in currency exchange rates, increase transportation and production costs, and disrupt supply chains, all of which can negatively impact a business's cash flow.

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Effective cash flow management involves monitoring both internal and external factors and implementing strategies to improve cash flow and prevent cash shortages. 

 

To run your business effectively, you need to balance the timing and amount of your expenses with those of your income. This Managing Cash Flow PPT training presentation explains the various areas you need to consider when managing and improving cash flow in your business.  

 

Note: This training package includes:

1. Managing Cash Flow training presentation (PowerPoint format, 4:3 standard screen)

2. Cash Flow Forecast template (Excel format)

 

Learning Objectives

 

1. Explain what cash flow means

2. Understand the cash flow cycle and importance of cash flow to a business

3. Identify major causes of cash flow problems

4. Define strategies to improve cash flow

5. Gain knowledge on eliminating waste to improve cash flow

6. Learn how to forecast cash flow

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Contents

 

1.  Introduction to Cash Flow

• Introduction

• How to measure cash

• What is cash flow?

• What are the cash inflows and outflows?

• Why is cash flow so important?

• Cash "flows" around a business

• Manage your income and expenditure

 

2.  Causes of Cash Flow Problems

• What is cash flow problem?

• Main causes of cash flow problem

• Profit is the most important source of cash

• Too much spending on production capacity

• Too much inventory

• Allowing customers too much credit

• Overtrading

• Unexpected economic and business changes

• Seasonal demand

 

3.  Strategies to Improve Cash Flow

• How to handle cash flow problems

• The importance of cash flow forecasting

• Managing working capital

• Improving working capital

• Managing debtors

• Debt financing

• Credit Control

• Trade Creditors

• Managing stocks

• Cash management

• Improving the cash position

• Price discounting

• Bank overdraft versus bank loan

• Sale of assets

• Sale and leaseback

• Checklist for improving cash flow

 

4.  Improving Cash Flow Through Waste Elimination

• The eight types of waste

• Waste elimination and cash flow

• Hard and soft savings

• The eight types of waste in a production system

• Overproduction

• Excess inventory

• Transportation

• Defects 

• Over-processing

• Motion

• Waiting

• Intellectual waste

 

5.  Cash Flow Forecasting

• Budget versus forecast

• Cash flow forecasts

• Elements of a cash flow forecast

• Example of cash flow forecast

• A 12-month cash flow forecast

• Creating and analyzing a cash flow forecast

 

 

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