Cash Inflows And Outflows Flashcards
Give examples of cash inflows/receipts
Cash sales
Credit sales
Loans
Capital introduced- owners capital
Sale of assets
Bank interest received
Give examples of cash outflows
Cash purchases
Credit purchases
Rent
Rates
Salaries
Wages
Utilities
Purchase of assets
VAT
Bank interest paid
2 Advantages of cash flow forecasting
Timings of inflows and outflows are known
Expensive items can be bought at the best time
2 disadvantages of cash flow forecasts
Based on forecasts and therefore may be inaccurate
Takes a long time to produce whilst the time taken could’ve been spent on other tasks
What are two ways to improve cash inflows
Offer discounts for quick payment
Chase up late payments
What is 1 way to reduce outflows
Delay payments to suppliers