Managing Cash Flow


Course Description

Cash flow is the lifeblood of a company and is fundamental to its very existence. Managers must understand how their decisions on investment, operations and financing lead to specific cash flow movements within the business system. A part of management’s job is to maintain an appropriate balance between the inflows and outflows of cash. Unfortunately an intricate understanding of how cash flows within a company eludes most business managers. Strategic and operational decisions regarding cash flow management are often driven by faulty intuition that is based on either the cultural practices within a company or the past experiences of its managers.

This course will focus on the core issues and techniques of cash flow management such as the management of working capital and corporate cash. In particular you will learn:

  • The techniques for effective collection and disbursement of cash
  • How to forecast future cash flows
  • Management of multinational cash flows


Course Objective

The objectives of the course are such that on completion, the delegates should be able to:

  • Recognize the importance of effective cash-flow management
  • Effectively manage collection and disbursement of cash
  • Develop better relationship with banks
  • Calculate cash operating cycles
  • Understand the importance of cash concentration system
  • Understand the different issues involved with cash budgeting
  • Forecast cash flows
  • Understand the basic issues involved in working capital management of oil and gas industry
  • Understand the basics of managing multinational cash flows
  • Understand the basics of electronic data interchange and the issues involved in its implementation.

Who Should attend?

Cash flow management is an essential skill that should be acquired (though at varying levels) by all the managers in a company. In particular the following will find it very helpful:

  • Financial managers, finance controllers treasurers and inventory managers
  • Senior managers with a direct responsibility for financial management and control
  • Accountants, sale and purchase managers and managers responsible for relationship with banks
  • Any manager, at a medium and senior level, who is a part of the financial decision making team.
  • New interns and trainees with finance related responsibilities.

Course Outline

Introduction to managing cash

Why hold cash?

  • What does cash mean?
  • Cash budgeting
  • Cash cycle


Capital budgeting & investment theory

  • Present value theory
  • Expected value theory
  • Tools of capital budgeting
  • Risk analysis

Inventory management

  • Cash flow timeline
  • A financial dilemma
  • Basics of managing the average inventory balance
  • The optimal quantity to order
  • Monitoring the inventory balance
  • Reducing the size of the inventory investment

Accounts receivable management

  • Trade credit & shareholder value
  • Evaluating the motives of trade credit
  • Managing the credit function
  • Overview of credit granting
  • Establishing a credit policy
  • The credit-granting decision
  • Emergence of expert systems
  • Monitoring and collections

Managing payables and accruals

  • A financial dilemma
  • Accounts payable
  • The payment decision model
  • Monitoring the accounts payable balance
  • Accruals


The payment system

  • A financial dilemma
  • The concept of float
  • Different types of payment systems


Cash collection system

  • The cost of float
  • Types of collection systems

Cash concentration

  • The basic structure of a cash concentration system
  • Cash transfer tools
  • Benefits of a concentration system
  • Cash transfer scheduling
  • Calculating the minimum balance to transfer

Managing the bank relationships

  • Services provided by banks
  • Bank selection & relationship management
  • How banks charge for services

Cash forecasting

  • Importance of cash forecasting
  • A financial dilemma
  • Steps in forecasting process
  • Forecasting- Percentage-of-sales method
  • Forecasting monthly cash flows
  • Forecasting philosophy


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