T: +44 (0) 845 071 2801
Finance - Avoiding Cash Flow Problems
Cash flow problems are accountable for causing nearly 70% of business failure. The real problem is that most of these businesses are actually profitable. So, where is the money going?
There are external risks, such as the impact of negative exchange rates and risks are specific to individual companies, such as borrowing excessively to finance operations.
Different reasons for cash flow problems require different strategies to ensure the companies continued success. Effective credit control could be the answer for a business whose bad debts and days of sales outstanding are increasing, but still the hidden dangers of excessive borrowing and over-investments should not be overlooked. Many small and medium businesses do not take seriously enough the danger of poor forecasting and budgeting, especially where cash flow requires tight control.
It is surprising how often these paramount strategies are left solely in the hands of financial professionals with other managers having little or no understanding of key indicators of cash flow, such as EBITDA (Earning Before Interests Tax Depreciation and Amortisation), DSO (Days Sales Outstanding), Free Cash Flow, Discounted Cash Flow, NPV, and many others.
In partnership with Dun & Bradstreet, the world-leading provider of business information and risk management solutions, Hemsley Fraser have developed an extensive range of first class credit and finance training programmes. Whether delivered as open courses, or as customised programmes, Hemsley Fraser can provide learning solutions for all your credit and finance needs.
For further information on how we can work with you and you finance team, please contact us.