The Times 100 Business Case Studies Edition 15

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The Times 100 Business Case StudiesEdition 15

• Controlling cash flow for business growth
• CIMA

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Introduction

• CIMA the Chartered Institute of Management
  Accountants
• The worlds leading professional body for
  management accountancy
• Has over 172,000 members in 168 countries
• Offers the most relevant financial qualification
  for business
• Management accountants
• Involved in all sectors of industry
• Often in high level roles
• Forecast, monitor trends and control cash
• flow

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Cash flow

• Cash is vital to longer term trading
• Cash inflow from eg sales
• Cash outflow from eg costs of goods or labour
• More money spent than received negative cash
  flow
• Cash is a liquid asset
• Available for investment
• Avoids having to seek credit or
• loans

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The cash flow cycle

• Balances cash inflow against cash outflow
• Lack of cash can
• lead to business failure
• affect the business reputation

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Improving cash flow

• Businesses need to manage cash flow
• Pay as little interest as possible
• Pay debts on time consolidate at low interest
• Negotiate payment terms with suppliers
• Avoid offering discounts
• Make better use of assets
• eg hire out warehouse space

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Benefits of effective management accounting

• Reduces uncertainty
• Helps to predict and plan for the future
• Ensures enough cash to cover debts or possible
  shortfalls
• Reduces unnecessary costs
• Makes cash work for the
• business