现金流管理-managing cash flow.doc

Excellence in Financial Management Managing Cash Flow Prepared by: Matt H. Evans, CPA, CMA, CFM  Chapter 1 Cash Flow Cycles Introduction Cash is the most liquid of assets and it represents the lifeblood for growth and investment. In order to generate cash, we must efficiently and effectively manage the activities that provide cash. These activities include billing customers as quickly as possible, disbursing payments only when they come due, collecting cash on overdue accounts, and investing idle cash. Therefore, managing cash flow involves several objectives: Accelerating cash inflows wherever possible. Delaying cash outflows until they come due. Investing surplus cash to earn a rate of return. Borrowing cash at the best possible terms. Maintaining an optimal level of cash that is neither excessive nor deficient. This course will attempt to outline how these objectives can be met. We will try to answer the following questions: How much cash do we need to run our business? How much cash is locked-up in other current assets? How long does it take to collect our cash from customers? How much cash should we hold? How do we cover cash deficits? How do we identify problems with cash flow? Two Cycles: Disbursements and Receipts As we indicated, cash flow management consists of several activities: Collecting accounts receivable, processing vendor payments, etc. We need to understand the time involved with each of these activities before we can properly plan our cash flows. Since cash consists of disbursements and receipts, we can think of cash flow in terms of two cycles. Disbursement Cycle: The total time between when an obligation occurs and when the payment clears the bank. Example 1 - Disbursement Cycle Time Specific Activity Day Obligation to Supplier 0 Process Invoice from Supplier 10 Run Payables and cut checks 25 Payment clears the bank 35 Total Cycle Time for Disbursement = 35 days The overall objective within the Disbursement Cycle is to incre