Cash management

Implementing effective cash flow management in a small, growing company involves a strategic approach to optimise the inflow and outflow of cash, ensuring the business can meet its financial obligations while also investing in growth opportunities. A Fractional CFO can help with the following strategies:

Developing a detailed cash flow forecast that projects future cash inflows and outflows
Creating a strict budget that aligns with the company’s cash flow forecast.
Improving receivables, i.e. invoicing promptly, incentivising early payments and keeping a watchful eye on accounts receivables to identify and address any overdue payments.
Managing payables, i.e. negotiating longer payment terms and prioritising payments.
Reviewing expenses to identify areas where costs can be reduced without impacting operations or product quality.
Monitoring cash flow by comparing actuals against forecasts and budgets.

Effective cash management requires discipline and regular review. As the business grows, these practices should evolve to address new challenges and opportunities, ensuring the company maintains a healthy cash position to support sustainable growth.

Industry: Medical devices

This client needed help to grow from a start-up. They had burnt most of their cash, so cashflow had become tight; they needed to secure further investment. We helped them to get investor-ready (enhanced accounting practices, business planning, forecasting and panning) and secured a cash runway for the next 12 months.

Industry: Big data consultancy

This client needed to improve and model their cash collection process to forecast cash receipts and improve cash flow. We gave them greater visibility of actual cash inflows, expected cash inflows (invoiced but not yet due) and work completed but not yet invoiced to a high level of granularity.

Industry: e-Commerce

Provided a permanent FD and support team to rectify capital management issues by reconciling supplier invoices, bank payments, VAT returns, and bank reconciliations whilst helping the business choose appropriate systems. Our team clarified the internal understanding of supplier liabilities, cash flow forecasting and the budgeting process.

Industry: Listed manufacturing business

Successfully deployed to a public company to provide cash flow and working capital management strategies, conduct investment appraisals on significant capital expenditure and navigate the finance team through treacherous economic conditions.

Industry: Management consultancy

Forecasted cash flow and managed working capital according to the scale of the client, and also implement contingency measures to plan for ‘what if?’ scenarios. Unlocked £500,000 per month by renegotiating better terms with creditors and invoice discounting.

Industry: Biotechnology

We continue to execute contingency measures and lead on implementing financial modelling and cash flow and working capital management strategies in response to the COVID-19 situation. We are delivering at pace; from stress testing the runway and researching national and international government initiatives to working with stakeholders and deploying ‘what if?’ scenario modelling.

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