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Jun 2010

Improving cash flow using credit management

This guide explores credit and cash management in small and medium sized enterprises and includes advice on maximising cash inflows, managing cash outflows, extending credit and cash flow forecasting. It is not intended to be complex or exhaustive, but rather to act as a basic guide for financial managers in smaller businesses.

Cash flow is the life blood of all businesses and is the primary indicator of business health. It is generally acknowledged as the single most pressing concern of most small and medium-sized enterprises (SMEs), although even finance directors of the largest organisations emphasise the importance of cash, and cash flow modelling is a fundamental part of any private equity buy-out. In a credit crunch environment, where access to liquidity is restricted, cash management becomes critical to survival.

"Sound cash management will give your business just as much of an edge in your transactions as, say, an improvement in your manufacturing process or service delivery. Control and prosper."

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Improving cash flow using credit management