Financial Management Strategies: Cash Flow Management

Question 1

Cash flow statements

Answer 1

Create cashflow forecasts to anticipate shortfalls in cash so that these can be managed proactively e.g. by getting an overdraft organised

Question 2

Distribution of payments

Answer 2

Managing inflows and outflows of cash e.g. only paying suppliers once money has been received from customers

Question 3

Discounts for early payment

Answer 3

Offering customers a discount if they pay early or on time

Question 4

Factoring

Answer 4

Selling unpaid customer invoices (accounts receivable) to a factoring company in return for immediate cash.