Problems with cash can indicate underlying problems within the actual operations and/or reflect a company’s lack of experience in the management of cash. A consultant with cash management experience can help identify these issues and help solve the problems before a crisis situation develops. Related issues to cash management include credit and collection policies and procedures and inventory control.
CASH FLOW FORECASTING
A comprehensive weekly business model with cash flow, inventory, receivables, payables and credit lines provides management with the tools necessary to manage assets in a dynamic environment. The business drivers must be identified with a detailed understanding of the activities that drive the results.
A lender loans a company money based upon the value of its collateral. This value can be determined periodically, frequently weekly or monthly. The computation and management of the company’s assets and its borrowing base is essential for good cash management and is tied directly to its business forecast.