strategies Flashcards
(12 cards)
basic principles of cash flow: DDF
discounts for early payments
distribution of payments
factoring
strategies for working capital management: ALLS
control current Assets
control current Liabilities
Leasing
Sale and leaseback
strategies for the control of cash
cash flow forecasting
systems in place to ensure security, eg separation of duties
strategies for control of receivables
checking customer credit rating
following up on accounts not paid
Factoring
Incentives for early payment
strategies for the control of inventory
ensuring there is enough stock to meet demand (not over/understocking)
just in time (JIT)
strategies for the control of payables
Arranging payment
Implementing internal controls to prevent embezzlement
Shopping around for suppliers that offer attractive credit terms.
Strategies for the control of loans
Minimise these expensive loans
Investigating alternate sources of funds.
strategies for the control of overdrafts
Dont finance large purchases using overdraft due to high interest.
Compare rates charged by the different financial institutions.
other working capital management strategies
leasing, sale and leaseback
profitability management: cost controls (CFE)
establishing Cost centres
monitoring Fixed and variable costs
expense minimisation
profitability management: Revenue controls (IDD)
increasing sales
developing new sales mixes
determining pricing policies
global financial management strategies (HIDEM)
hedging
derivatives
exchange rate
methods of international payment
