Bus 2.2 improving cashflow

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  • Created by: Millie
  • Created on: 17-02-14 11:06
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  • 2.2 Improving Cashflow
    • Cashflow
      • The amounts of money flowing into and out of a business over a certain period of time.
    • Ways of improving cashflow problems
      • Increase cash inflows
        • Short term loan- a sum of money provided to a firm or an individual for a specific agreed purpose, repayment is usually less than 2 years
        • Factoring- a factoring company (usually a bank) buys the right to collect credit sales from an organistion
        • Leaseback of sale assets-when assets that are owned by the business are sold to raise cash and then rented back so the company can still use them for an agreed period of time
  • Causes of cash flow problems
    • Cashflow
      • The amounts of money flowing into and out of a business over a certain period of time.
  • Lack of planning
    • Causes of cash flow problems
    • Poor credit control-customers are not paying on time
      • Allowing customers to long to pay debts
        • Seasonal demand and unexpected changes/events
          • Overdraft- an agreement with the bank allowing a business to withdraw more money than is in its account up to an agreed limit
            • Increase cash inflows
              • Short term loan- a sum of money provided to a firm or an individual for a specific agreed purpose, repayment is usually less than 2 years
              • Factoring- a factoring company (usually a bank) buys the right to collect credit sales from an organistion
              • Leaseback of sale assets-when assets that are owned by the business are sold to raise cash and then rented back so the company can still use them for an agreed period of time

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