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Cash Flow Management Services
- Written by Alastair Macduff
We will review your existing financial systems and controls, make recommendations for improvements, and if necessary, design and implement a cash management system that will allow you to take control of your cash flow and also provide you with the detailed information required to run your business efficiently. With extensive experience across a wide variety of clients and industries, we have developed focused, hands on, yet personal approach, which ensures that solutions are practical and tailored to your needs.
STAGE 1 - Establishing the current situation
In order to understand your business, we will undertake a thorough review of the following:
- The latest financial statements or management accounts
- Financial systems & controls
- Existing bank facilities, loans & security
- Debtors & Creditors
- Trading terms & conditions
- Current aged analysis
- Overdue accounts,
- Returns & Credit note history
- Stock levels and potential write offs
- Plant and equipment
- Leases, any other liabilities or commitments
- Cash book processing & current bank reconciliation
- Sales forecasts and expenditure budgets
- Capital expenditure forecasts
STAGE 2 - Designing the cash flow management system
We will design & implement a suitable system that will give you accurate and up-to-date information. We will train your staff to ensure that they understand the systems & procedures. The system will provide you with the following:
- Weekly /monthly cash flow forecasts
- Monthly management reports
- Sales forecasts
- Production costs and margins
- Overhead expense forecasts
- Breakeven analysis
STAGE 3 – Converting surplus assets and overdue accounts into cash
In conjunction with you, we will review your latest Balance Sheet and Fixed Asset Register, to establish whether there are any assets that are surplus to your immediate requirements and make recommendations as to how they can be sold off and converted into cash. We will also review all lease agreements & hire purchase contracts to see if any surplus contracts can be cancelled.
After reviewing the aged analysis of the debtors’ ledger, a debt collection plan will be implemented and vigorously pursued, to bring in all overdue accounts.
Items under dispute will either be handed over for collection or a cash settlement negotiated.
The current stock holdings will also be investigated and any obsolete or slow moving items will be sold off at a discount, in order to generate cash.
The aged analysis of the creditors’ ledger will be reviewed and if appropriate, selected suppliers will be approached to request additional credit terms. Once the cash flow forecast has been completed, we suggest that creditors be approached to inform them of the proposed repayment plan with details as to how the overdue balances will be paid.
STAGE 4 – Negotiations with the bank and any other secured creditors
When the cash flow forecast has been prepared, we will assist you with a presentation to your bankers to inform them of the current situation and to set out the recovery steps that you have taken. We have been involved in many turn-around situations, which were successful, due to the active support and co-operation of the bankers.
STAGE 5 - Monthly monitoring and ongoing support
We have found that it is vital to the success of the project that there is ongoing monitoring to ensure that systems and procedures are being followed and that reports are produced on time. This means that the monthly management meetings must be held, and action plans monitored.
If required, we will attend monthly management meetings, as the presence of a third party tends to ensure that the information is produced on time, and we can provide a broader perspective to the business and make a contribution to proceedings.
At the end of the assignment and transition process, you can expect:
- A disciplined cash flow management program will be in place
- Monthly management reports
- Monthly cash flow reports
- Control over Capex & overheads
- Better communications & relationship with your bankers
- Personal control of the direction of the business