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Cash is King... Cashflow management

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

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Cash is King... Cashflow management

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  1. Cash is King... Cashflow management

  2. Working capital

  3. Working capital

  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 • Don’t include lots of work on one invoice • Don’t 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

  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

  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

  7. Tax Get accounts done quickly if there’s 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

  8. Other tips • 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?

  9. Contact us 3 Centro Place Pride Park, Derby, DE24 8RF T: 01332 295544F: 01332 295600 14 Park Row Nottingham, NG1 6GR T: 0115 9580212 F: 0115 9588800 1 Colton Square Leicester, LE1 1QH T: 0116 262 9922F: 0116 262 8219 cooperparry.com

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