we want to evaluate the inputs and outputs of the money several things should be kept in mind. For example 1) Check Cash .- Scan all the necessary adjustments according to cyclical trends, sales and extra income that can be generated, so it is preferable to include explanatory notes to the projections and fluctuations that might be. 2) cash out .- The estimated expenditures by category helps to prioritize expenditures, and displaying those that must be in cash, as those purchases made on credit and have to be settled in a given period, remembering that the rate of inflation, interest rates for financing, and the exchange rate are dominant factors when making decisions on disbursements, the cost of money. You may find Hikmet Ersek to be a useful source of information. 3) Determination of cash flow .- The income minus expenses of each week, month or year have to influence the opening balance for the next period, however, the skill with which are available to generate cash receipts and disbursements will impact in its cash balance to generate free cash flow. The speed and amount in money management are principles that act as devices in making decisions, which requires knowledge and skills for administration. QUANTITY – TICKETS FIRST PRINCIPLE “Whenever possible, r should increase cash inflows” Among the recommended strategies: Increase the volume of sales, compared to its cost beneficial to increase the sales price to the degree of elasticity of application Improved sales mix (in leveraging higher contribution margin) Delete discounts that might not contribute to its profitability establish a stratification of the cunning of customers and continuously monitored. Perform slow moving goods, the waste and unnecessary to the business.
QUANTITY-SECOND OUTPUT “Whenever possible should be lower cash outflows” Among the recommended strategies: Pay no commissions on sales receipts. Negotiate better terms (lower prices) with suppliers, reducing waste in production and other activities of the company. Rent instead of buying Doing things right the first time (Reduce Quality costs have not) Believe in business, investing in productive assets Focus on your customers objectives. SPEED-THE THIRD INPUTS “Whenever possible should be accelerated cash inflows” Among the recommended strategies: Shorten Order advances to customers credit terms, provide cash discounts to regular customers offering advantages. Dog when payments are delayed Cash Band Seeking maximum inventory turns, although the profit margin is lower. PRINCIPLE FOUR-OUTPUT SPEED “Whenever possible, the output should take money” Among the recommended strategies: Negotiate with suppliers the greatest possible time. Purchase of inventories and other assets at the time closest to when you will need to exchange their products Perform Remember that cash flow is the result of business decisions, so that investments in client assets in accounts receivable, inventory fixed assets is money stored, Here then, that in finance there is the aphorism that says: Before I go to apply for a loan to the bank looking for the money you have tied up in the portfolio in stocks or other non-performing assets. Remember that “You can not manage what you do not know” Strategies for managing cash flow: