Effective Financial Management Book

Introduction 1

1 The business plan 3

Review your planning team 3

Revise your business plan 4

Trading results 5

The business strategy in your business plan 11

Risks, contingencies and scenarios 17

2 Assessing projects 23

Discounted cash flow 25

Other evaluation methods 28

Postscript 30

Business acquisitions 31

3 The budget process 35

What is a budget and why does a business need one? 35

Explicit assumptions 36

Start with sales 37

Work up the costs 38

The balance sheet and cash flow 38

Reviewing the budget 41

Wishful thinking 42

4 Cash 45

Manage cash 46

Debt recovery 46

Manage problem accounts 51

Cash forecasting 59

Releasing cash 65

Invoice dates 67

5 Managing costs 69

Cost reduction 69

Review the business by area 71

Focus on the big costs first 73

Staff costs 76

Outsourcing 81

6 Supply 85

Security of supply 85

Terms of trade 86

Stock clearances 92

Credit ratings 93

7 Property 95

Rent 95

Sub-letting 97

Service charges 97

Business rates 99

8 Buying undervalued assets 101

Negotiating the best deal 102

Buying in a bankruptcy 103

Buy second-hand and from the internet 105

Buying cooperatives 106

9 Banks and borrowing 107

Personal guarantees 108

Managing your banking relationships 109

Refinancing 111

Leasing 112

Other forms of finance 113

10 Company accounts 119

Company structure 120

Capital structure and risk 121

To audit or not to audit 123

Accounting policies 124

Issues of fraud 126

Going concern 129

The view when not a going concern 130

Surplus funds 132

11 Administration as a business tool 135

Administration issues 136

Starting again 140

12 Use all those free resources 143

Discounts and grants 143

Reclaim taxes 144

Paying taxes 145