Improving cash flow Flashcards
1
Q
What are creditors?
A
Suppliers owed money by the business, purchases have been made on credit.
2
Q
What is credit control?
A
Monitoring of debts to ensure that credit periods are not exceeded.
3
Q
What is bad debt?
A
Unpaid customer bills that are now unlikely to ever be paid.
4
Q
What is overtrading?
A
Expanding a business rapidly without obtaining all of the necessary finances so that a cash flow shortage develops.
5
Q
Causes of cash flow problems?
A
Lack of planning Poor credit control Allowing customers too long to pay debts Overtrading Unexpected circumstances
6
Q
Ways to improve cash flow
A
Increase cash inflows
Reduce cash outflows
7
Q
Ways of Increasing cash inflows
A
Overdraft Short term loans Sale of assets Sale and leaseback Debt factoring
8
Q
Ways of reducing cash outflows?
A
Delay payments to suppliers
Use leasing not outright buying
Cut overhead spending.
