How to Improve Cash Flow

Mind Map by 08rymer.hg, updated more than 1 year ago
Created by 08rymer.hg about 7 years ago


Business Studies Mind Map on How to Improve Cash Flow, created by 08rymer.hg on 04/11/2013.

Resource summary

How to Improve Cash Flow
1 A cash flow forecast allows businesses to see where they will be financially in the coming months
2 The business may use the forecast to spot and deal with any future problems
3 It is vital for a business to have a good cash flow
4 Net cash flow = Cash inflow - Cash outflow
5 Closing bank balance = Starting bank balance + Net cash flow
6 How can cash flow be improved?
6.1 Increase Cash Inflow
6.1.1 Get customers to pay in cash
6.1.2 Get customers to pay straight away
6.1.3 Keep a low stock level
6.1.4 Obtain an overdraft
6.2 Decrease Cash Outflow
6.2.1 Sell under-used assets
6.2.2 Spread large costs over a longer period of time
6.2.3 Negotiate longer trade credit terms with suppliers
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