Improve Cash Flow

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Cash flow - is the flow of cash into and out of a busniess.

Managing cash flow - Financal managment is about changing monetary variables such as cash flows to achieve financial objectives such as improved cash flow.

Improving Cash Outflows

  • Delay paying invoices
  • leasing rather than buying
  • Reduce stock orders
  • Improve credit terms with suppliers
  • Use cheaper suppliers

One large cash outflow is wages paid to workers of the busniess. another is payments to other busniess for materials.Takes paid to the government such as value added tax, income tax for its busniess rates and workers.

Improving Cash inflows

  • increasing sales revenue
  • de-stocking
  • reduce crdiet terms with customers
  • encourage customers to pay early (incentives)
  • use short term sources of finance, e.g. overdrafts and short term loans

Main inflow of cash comes from customers who have bought the…


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