1. The Times 100 Business Case Studies Edition 15
Controlling cash flow for business growth
CIMA

2. Introduction CIMA – the Chartered Institute of Management Accountants
The world’s leading professional body for management accountancy
Has over 172,000 members in 168 countries
Offers the most relevant financial qualification for business
Management accountants
Involved in all sectors of industry
Often in high level roles
Forecast, monitor trends and control cash
flow

3. Cash flow Cash is vital to longer term trading
Cash inflow from eg sales
Cash outflow from eg costs of goods or labour
More money spent than received = negative cash flow
Cash is a ‘liquid asset’
Available for investment
Avoids having to seek credit or
loans

4. The cash flow cycle Lack of cash can:
Balances cash inflow against cash outflow
Lack of cash can:
lead to business failure
affect the business’ reputation

5. Improving cash flow Businesses need to manage cash flow
Pay as little interest as possible
Pay debts on time; consolidate at low interest
Negotiate payment terms with suppliers
Avoid offering discounts
Make better use of assets
eg hire out warehouse space

6. Benefits of effective management accounting
Reduces uncertainty
Helps to predict and plan for the future
Ensures enough cash to cover debts or possible shortfalls
Reduces unnecessary costs
Makes cash work for the
business