Cash Flow Management Services

Cash Flow Management & Forecasting Services

Cash flow management is the process of monitoring, scrutinizing, and augmenting the net amount of cash receipts minus cash expenses. It is the efficient and effective use of cash inflows and outflows without affecting the operation of the business and advice on cash related inflows & outflows i.e. its proper collection, the right time for further investments, and prioritizes the supplier payments along with inside payments. Tax planning in the light of VAT is necessary for terms of managing the cash. It is advice on the utilization of bank facility and letter of credit facility from the bank for supplier payments, and the effective capital structure by balancing debt & equity ratio. 

Businesses have a volume of cash inflows and outflows that must be cautiously managed in order to see payment obligations, plan for future payments, and keep satisfactory business solidity. The success of a business depends on the proper management of the cash and the proper planning of the investment by the owner.

The cash flow statement is a fundamental component of business cash flow management. The cash flow statement widely records all the cash flows of a business. It includes cash received from accounts receivable, cash paid for accounts payable, investing, and financing. The outcome of the cash flow statement reports the current availability of the cash in hand. 

Reasons to Outsource Cash Flow Management Services in Dubai 

Unproductive financial management can make or break revenue bottom lines and can sternly pull-down growth prospects. If the business repetitively spends more than it produces, remember, it’s in a cash flow problem.

A practical substitute to make better cash flow is to outsource cash management to a specialized service provider. CDA professionals can make you free from the drain of handling routine cash flow management tasks and put the concentration back on obtaining new customers and congealing stakeholder relationships. CDA can also help you make a decision towards the selection of the source of funds internally or through Bank facilities or by further investment.

Situations that Lead Businesses to Cash Flow Management Problems 

• Bad cash flow for protracted periods of time will force many property developers into bankruptcy.
• A business that's undertaking quick extension can run into cash flow problems, higher labour costs, and other expenses.
• The necessity to maintain increased levels of inventory will lead a business into cash flow problems.
• Giving credit to other businesses will make a business run into cash flow problems 
• Customer delay for payment of the invoice can lead a business to a cash flow crisis.

How to Handle Cash Flow Problems?

Cash flow management means delaying outlays of cash as long as possible and encourage those who owe you money to pay it as fast as possible. The following measures can be used for better cash flow management.

1. Measuring Cash Flow 

• Prepare cash flow projections for next year, next quarter and, if you're on shaky ground, next week. 
• Have detailed knowledge of amounts and dates of upcoming cash outlays. 

2. Improving Receivables 

You have to speed up making materials and supplies into products, inventory into receivables, and receivables into cash. Here are specific techniques for doing this:

• Offer discounts to customers who pay their bills rapidly.
• Ask customers to make deposit payments at the time orders are taken.
• Require credit checks on all new noncash customers.
• Get rid of old, outdated inventory for whatever you can get.
• Issue invoices promptly and follow up immediately if payments are slow in coming.
• Track accounts receivable to identify and avoid slow-paying customers.
• Introduce a policy of cash on delivery instead of refusing to do business with slow-paying customers.

3. Managing Payables 

• Watch expenses carefully. 
• Take full advantage of creditor payment terms. 
• Use electronic funds transfer to make payments on the last day they are due. 
• Communicate with your suppliers to make them know about your financial situation. 
• Carefully consider vendors' offers of discounts for earlier payments. 
• Don't always bargain for the lowest price when choosing suppliers; rather go for more flexible payment terms. 

4. Surviving Shortfalls 

There are normal and everyday business practices that can help you manage the shortfall.

• Become aware of the problem as early and as accurately as possible.
• Go for a loan from the bank or from your suppliers
• Consider using factors like discounts for early payment rather than borrowing
• Ask your best customers to accelerate payments. 
• Sell or leaseback assets such as machinery, equipment, etc.
• Carefully choose the bills you'll pay. 

Why CDA Accounting & Bookkeeping Services?

CDA professionals concentrate on understanding our clients’ necessities and prepare a plan for the cash flow utilization that can help our clients accomplish their business events better. Through our effective cash flow management and forecasting services in Dubai, you get a clear insight into the financial prospects of your business.  Our expert financial professionals will examine your financial inflow and outflow to estimate the financial position of your business during a specific period. This comprehensive analysis is competent to forecast your business financial performance so that you can plan your goals in advance.

Outsourcing your requirements for cash flow accounting Services to CDA can make you - 

• Utilize our widespread knowledge. 
• Utilize the services of competent professionals 
• Receive greater services on time 

CDA’s Comprehensive Cash Flow Management Planning Solutions: -

• Prepare proper planning of both inflows and outflows
• Predict cash flows
• Manage financial risks
• Recognize the projected sales
• Recognize the expenditures 
• Recognize the existing commitments
• Analyze the accounts receivable and advise on credit period and collection policy
• Analyze the accounts payable and advise on payment terms
• Analyze the credit terms and policies 
• Introduce techniques for proper credit policy
• Analyze the inventory to identify problematic areas and advise on EOQ (Economic Order Quantity)
• Manage fraud control programs
• Review and analyze expenditures on banking services
• Review contracts for financial and banking services
• Advice on which source of funds to be used, i.e. Bank facility/in house cash/more investment.

CDA force offers various services to the business world, including accounting Services, Auditing & Assurance Services, Vat & Tax Consultant Services, Implementation of Accounting Software Services and Due Diligence Audit Services in Dubai.

Any concerns regarding cash flow management services? Feel good to contact us. Our expert will call you back immediately and will offer you one-hour free consultation.

Frequently Asked Questions [FAQ]

1.What is cash flow management? 

In simple words cash flow is the money coming in and out of your business. Most importantly, it is the cash in your hand to keep your business running. Managing your cash flows is a cumbersome task since it involves monitoring, scrutinizing, and augmenting the net amount of cash receipts - cash expenses, but hiring accounting consultants can help you to improve your cash flows and generate income.

2.What are the signs of poor cash flow? 

Cash flow shows some early warning signs which include: Delay in the payment receivables a not being paid steadily, No discounts received when paying your bills, High short-term debt, High inventory level and sales are down.

3.Why is cash flow important for my business?

Cash flow helps to Keep your business operating, Purchase necessary supplies, Settle the bills and payments, and avoids shortfalls in the business and make projections on the future growth

4.What are some good cash flow management habits I can adopt? 

CDA would suggest you to Sell more than you spend, Focus on your debt and cut down unnecessary costs , Negotiate with your vendors for the best terms of price, Sell off unproductive assets, and build up your reserves ensuring you don’t get into a cash flow crunch. etc.

5.How is a cash flow analysis performed? 

To do a cash flow analysis you need to prepare Cash flow statement indicating inflow and outflow and analyse your operating expenses, investments, financing costs 

In a cash flow analysis, you are examining precise details of where your business sends and earns money. 

6.What is a negative cashflow? 

Negative cash flow arises when your expenses exceed the income. It indicates lack of receivables management and poor credit policy. 

If the negative cash occurs continuously it can cause business failure. In such cases businesses can’t pay their bills or they’re forced to borrow money, pay interest, and hurt the bottom line.

7.How do I know if cash flow statements are correct? 

To ensure that your cash flow statements are accurate and precise, a line by line analysis is required. On handing over your accounting requirements to us we will provide you with ease information at its best quality.

8.What makes the Cashflow statement different from Profit & Loss Account?

The cashflow statements are prepared based on the actual cash inflow and outflow from operating, investing and financing activities. Whereas P&L is created based on the accrual concept.  In P&L the provisions are added whereas in Cashflow no provisions are created as an income.