Note that all versions of Cashflow Plan contain
a dynamic version of this checklist which is linked to
projected values and ratios,
and provides the basis for an ongoing cash flow improvement program.
| Possible Measures | Assess Benefits Tick box |
Do
Now Tick box |
| 1. Sales Related: | ||
| Increase sales (particularly those involving cash payments). | ||
| Increase prices especially to slow payers. | ||
| Review the payment performances of customers with sales force. | ||
| Become more selective when granting credit. | ||
| Seek deposits or multiple stage payments. | ||
| Reduce the amount/time of credit given to customers. | ||
| 2. Costs & Systems: | ||
| Reduce direct and indirect costs and overhead expenses. | ||
| Use the 80/20 rule to manage inventories, receivables and payables. | ||
| Improve systems for billing and collection. | ||
| 3. Credit Management: | ||
| Bill as soon as work has been done or order fulfilled. | ||
| Generate regular reports on receivable ratios and aging. | ||
| Establish and adhere to sound credit practices - train staff. | ||
| Use more pro-active collection techniques. | ||
| Add late payment charges or fees where possible. | ||
| 4. Purchasing: | ||
| Improve systems for paying suppliers. | ||
| Increase the credit taken from suppliers. | ||
| Negotiate extended credit from suppliers. | ||
| Use barter to acquire goods and services. | ||
| Make prompt payments only when worthwhile discounts apply. | ||
| 5. Inventory: | ||
| Reduce inventory (stock) levels and improve control over WIP. | ||
| Sell off or return obsolete/excess inventory. | ||
| 6. Investment: | ||
| Defer or re-stage all capital expenditure. | ||
| Sell off surplus assets or make them productive. | ||
| Enter into sale and lease-back arrangements for productive assets. | ||
| Use leasing etc. to gain access to the use of productive assets. | ||
| Defer projects which cannot achieve acceptable cash paybacks. | ||
| 7. Financing: | ||
| Use factoring or discounting to accelerate receipts from sales. | ||
| Re-negotiate bank facilities to reduce charges. | ||
| Seek to extend debt repayment periods. | ||
| Net off or consolidate bank balances. | ||
| Defer dividend payments. | ||
| Raise additional equity. | ||
| Convert debt into equity. | ||
| Make medium- and short-term cashflow forecasts - update regularly. * | ||
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