Description

Managing cash flow means learning to model annual cash flow forecasts as a powerful simulation tool. It also involves building reliable forecasts, securing cash flow by optimizing working capital management, and anticipating potential customer payment defaults.

Who is this training for ?

For whom ?

• For individuals responsible for budget preparation and monitoring.
• For those managing cash flow control.

Prerequisites

• Understanding of basic accounting concepts.

Training objectives

Identify the financial and accounting information sources needed for cash flow forecasting

Assess the company’s cash flow situation by analyzing key financial ratios

Build a projected cash flow budget

Secure cash flow by verifying customer creditworthiness

Optimize working capital requirements

Training program

• Basic Accounting Concepts for Cash Flow Management
  • Understand and interpret the balance sheet.
  • Analyze asset items.
  • Review liability items.
  • Explore the income statement.
  • Identify income statement components: operating, financial, and exceptional revenues and expenses.
  • Study the financial notes: explanations of changes from one fiscal year to another.
  • Practical exercise: build a balance sheet (assets and liabilities) and an income statement from a trial balance.
• Identifying Information Sources for Cash Flow Forecasting
  • Master the operating cycle.
  • Understand cash inflow and outflow dynamics.
  • Develop medium- and long-term investment and financing budgets.
  • Grasp the concept of normative working capital requirement (WCR).
  • Practical exercise: calculate the normative operating working capital requirement (WCR).
• • Perform a static analysis based on the balance sheet.
  • Analyze operational balances.
  • Use cash flow statements to understand cash movements.
  • Analyze margins through the income statement and apply margin optimization principles.
  • Determine the company’s self-financing capacity (CFC).
  • Understand the common causes of unreliable annual cash flow forecast.
  • Analyze top and bottom balance sheet structure.
  • Present a functional balance sheet.
  • Calculate WCR.
  • Assess cash position, and interpret key financial ratios.
• Building a Forecast Budget and Cash Flow Plan
  • Learn the basics of budgeting.
  • Understand the importance of scenario planning in cash flow forecasting.
  • Build a reliable cash flow plan.
  • Adjust raw accounting data for forecasting purposes.
  • Develop and coordinate various budgets.
  • Implement budget control: analyze variances in costs and revenues.
  • Define and apply corrective action.
  • Practical exercise: build a cash flow forecast, analyze it, and calculate variances on revenue and expenses.
• Implementing Customer Solvency Monitoring
  • Understand the value of a client monitoring system.
  • Assess solvency and profitability using key financial ratios.
  • Secure receivables and improve cash collection.
  • Detect warning signs before customer default.
  • Learn the basics of business failure prevention law (July 26, 2005).
  • Focus: overview of the LME law (August 4, 2008) on payment term reduction.
  • Practical exercise: calculate and analyze customer solvency and liquidity ratios.
• Improving Working Capital Requirement
  • Define financial balance: WCR, net working capital, and net cash.
  • Identify actions to improve cash flow.
  • Take steps to enhance margins.
  • Promote a cash culture to manage WCR.
  • Shorten average payment term.
  • Practical exercise: optimize company WCR and reduce customer payment delays.