epwn cash management basics 130529 mr

30 mai 2013

Cash management

basics

Morgane Rol lando,

Synerf ia, Founder and

CEO

2 Cash management basics by Synerfia

CASH MANAGEMENT BREAKFAST WORKSHOP


CASH MANAGEMENT BASICS

Dash Board

Reporting

Business Plan

Cash recovery

Due Diligence

Cash Flow Working Capital

Budget

Cash Projection

Equity

Operational Cash Flow Investments

WACC

EBITDA Debt

Ratios

Gross Margin

Operationnal Income Net Income

Financial Communication

Company Valuation

Shareholders



CASH IS KING when i t comes to the f i nanc ia l management o f a

g rowing company.

At i t s s imp les t , cash f l ow management means de lay ing ou t l ays o f

cash as l ong as poss ib le wh i l e encourag ing anyone who owes you

money to pay i t as rap id l y as poss ib le .

Measur ing Cash F low

Improving Rece ivables

Managing Payables

Surviving Shor t fa l ls



MEASURING CASH FLOW

1. Building a cash-flow statement

a. Cash Cycle

b. Chose / design your cash flow management tool

c. Plan your own cash Flow statement

2. Follow-up on Cash Flow Statement

a. Update and understand current Cash-Flow

b. Update cash-projections

3. Tips and tricks on how to optimize cash position


MEASURING CASH FLOW

CASH CYCLE MANAGEMENT

1. Operating Cash Flow or Working Capital

=> Cash generated from, or needed for Operation

Accounts Receivables / Accounts Payable / Inventory / Salaries

Financing: Equity, loans, overdraft

2. Investing Cash Flow

Cash generated internally from non-operating activities

R&D / Equipment or other Fixed assets

Financing: Equity, subsidies, MT-LT debt or loan

3. Financing Cash Flow

=> Cash to and from external sources, such as lenders, investors and shareholders


MEASURING CASH FLOW

CASH FLOW STATEMENT

1. Use of standard statement

=> Ready-made model, easily accessible from internet platform (APCE and other

websites)

• Issued from income statement, accouting model

• You need to drown yourself in for each update

2. Build your own cash-statement

=> Tailored to your own activiy

• Easily understandable by yourself, who will manage / update it

• Need time to be built


MEASURING CASH FLOW

BUDGETING YOUR OWN CASH-FLOW STATEMENT

Exercise based on 3 business cases

1. Turn Over

• List all incoming items from your business model

• Adjust these incoming items with TIME-TO-CASH weightings, such as:

season/ payment terms / likelihood of signing the deal

• Local aspects impacting turn over or client’s decision: VAT, customs, freight,

shipping time, planning time…

2. Cost Of Sales

Link each item of the business model to:

• R&D => amount and related time to development

• Input costs, raw materials, production cost

• Contractors, external fees

• Logistics, packaging


MEASURING CASH FLOW

3. DECAISSEMENTS

3A. D'exploitation

Cout directs d'exploitation

Logistique

Packaging

Production produits dérivés

2. ENCAISSEMENTS

2A. D'exploitation

Chiffre d'affaires encaissé

Prestation

Ventes

Hotline

janv-13 févr-13 mars-13 avr-13 mai-13 juin-13 juil-13 août-13 sept-13 oct-13 nov-13 déc-13

1. SOLDE EN DEBUT DE MOIS

2. ENCAISSEMENTS

2A. D'exploitation


Prestation

Ventes

Hotline

Remboursement de TVA

2B. Hors exploitation

Apport en capital

Apports en comptes courants d'associés

Emprunts à moyen et long terme

Apport investisseur

Emprunt court terme

Subventions

A. TOTAL ENCAISSEMENTS

3. DECAISSEMENTS

3A. D'exploitation


Rétrocession droits

Règlement distribution


Marketing & communication

Salon

Supports de communication

Relations presse

Site (hébergement, mise à jour)

Deplacements

Transport (Train/Avion)

Honoraires

Divers

Loyer

Autres ch. externes (fourn.bureau/petits outillages)

Frais postaux, téléphone

Assurances

Documentation

Intérêts d'emprunts

Frais tenue compte banque

Salaires

Impôts, taxes et versements assimilés

Impôts sur les bénéfices

TVA versée

3B. Hors exploitation (immobilisations)

Développement activité

Règlement développeur (inclus animation)

Règlement musique et voix

Rétrocession droits auteurs Avances à la commande

Développement international

Immatriculation & Frais d'établissement

Création site internet

Immobilisation corporelle -Informatique et matériel

Immobilisation corporelle -mobilier

Remboursement d'emprunts (capital)

B. TOTAL DECAISSEMENTS

4. SOLDE DU MOIS = A-B

5. SOLDE DE FIN DE MOIS = 1 + 4


MEASURING CASH FLOW


3. Marketing and communication

• List all action, and support with related amounts and time in the calendar

4. Salaries and related

• List all the people you need to accomplish previous action

• Planning and time at which they should « come in »

5. Overhead / Fixed Costs

• List by priority, according to specific needs

6. Other costs and taxes


MEASURING CASH FLOW

3. DECAISSEMENTS

3A. D'exploitation


Salon


Relations presse


Deplacements


Honoraires

Divers

Loyer



Assurances

Documentation



Salaires



TVA versée



2. ENCAISSEMENTS

2A. D'exploitation


Prestation

Ventes

Hotline



Apport en capital



Apport investisseur

Emprunt court terme

Subventions


3. DECAISSEMENTS

3A. D'exploitation






Salon


Relations presse


Deplacements


Honoraires

Divers

Loyer



Assurances

Documentation



Salaires



TVA versée
















MEASURING CASH FLOW


7. Financing Operations

• Investment and fixed assets • Material

• Immaterial

=> Calculate amount / Financing needs

• Working Captal needs


MEASURING CASH FLOW



Règlement développeur










2. ENCAISSEMENTS

2A. D'exploitation


Prestation

Ventes

Hotline



Apport en capital



Apport investisseur

Emprunt court terme

Subventions


3. DECAISSEMENTS

3A. D'exploitation






Salon


Relations presse


Deplacements


Honoraires

Divers

Loyer



Assurances

Documentation



Salaires



TVA versée
















MEASURING CASH FLOW


8. Available Resources

• Equity, resources from founders

• Existing resources from operations

9. Identify Cash needs

• What needs to be funded (operations vs structure, Short Term vs Long Term…)

• Time of repayment capacities

• Amount REALLY needed

10. Apply cash sources related to your activity and company’s life cycle

• Subsidies

• Equity increase, investors

• Bank loans / other loans


MEASURING CASH FLOW



2. ENCAISSEMENTS

2A. D'exploitation


Prestation

Ventes

Hotline



Apport en capital



Apport investisseur

Emprunt court terme

Subventions


3. DECAISSEMENTS

3A. D'exploitation






Salon


Relations presse


Deplacements


Honoraires

Divers

Loyer



Assurances

Documentation



Salaires



TVA versée
















MEASURING CASH FLOW

Other costs & taxes

OverHead & fixed costs

Salaries & HR


Cost Of Sales

Turn Over

Cash Needs



2. ENCAISSEMENTS

2A. D'exploitation


Prestation

Ventes

Hotline



Apport en capital



Apport investisseur

Emprunt court terme

Subventions


3. DECAISSEMENTS

3A. D'exploitation






Salon


Relations presse


Deplacements


Honoraires

Divers

Loyer



Assurances

Documentation



Salaires



TVA versée















Cash Resources

Other Assets

Assets Investments

Cash-In

Cash-Out

Cash Position

Period



MEASURING CASH FLOW


a. Cash Cycle








UPDATING CASH-FLOW STATEMENT

1. Updating current statement

• Regular update with bank statement

• Update CF Statement with « real » receipts and payments

• Critical period: weekly basis

• Strong rise: bi-weekly

• Cruising Speed: (bi) monthly

2. Variances analysis

• Identify reasons for variances => wrong anticipation, client’s bankruptcy,

supplier’s delay, change in tax system, collection delay….

• Plan and anticipate receipts and payments • Realism

• TIME-TO-CASH

MEASURING CASH FLOW



UPDATING CASH-FLOW STATEMENT

3. Updating cash projections

• According to variance analysis

• According to new aspects of the business, new certainty

• Frequency



MEASURING CASH FLOW


a. Cash Cycle








OPTIMIZE CASH POSITION

OPIMIZE YOUR CASH POSITION

1. Improving Receivables

=>Improve the speed with which you turn:

• Materials and supplies into products

• Inventory into receivables

• Receivables into cash

=>Useful thinking

• Focus on CASH, not only revenue

• Follow-up closely on accounts receivables

• Give incentives to customers to pay early

• Include Milestones payments on big operations

• Ask customers for a down payment on big project




2. Managing Payables

In a growing business, increase in expenses (and payment) happens BEFORE we

see the increase in revenue (and receipts).

• WATCH your expenses carefully, restrict them to critical expenses

• Post-pone any expense that will not have a direct effect on cash receipt

• ALWAYS discuss payment terms with suppliers

• Post-pone any expense that is not priority

• Beware of inventory => consider its « adding-value »

• Communicate with suppliers and financial partners about your financial

situation (and also great perspectives)




3. Surviving Pitfalls

Sooner or later you will find yourself in a situation where you lack cash to pay your

bill.

The key is to become aware of the problem as early and as accurately as possible,

and ANTICIPATE

• Discuss a credit-line with your bank before you are short

• Keep very transparent with your shareholders => they might help financially if

they are aware

• Communicate with partners (customers, suppliers). They are interested in

keeping you going

• Choose carefully the bills you pay

• Sell non-critical assets

• Decrease inventory



A TAILORED CASH STATEMENT MEANS

• First Step for Balanced Business Plan

• Regular Monitoring

• Anticipates relationswith financial partners

• Think TIME TO CASH



Morgane ROLLANDO

Tel +33 6 14 31 97 17 [email protected]

www.synerfia.com

Thanks for your attention

mailto:[email protected]

http://www.synerfia.com/