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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