Webinars On-Demand

Back

---

Managing Cash Flow and Budgeting

---

Overview   

This webinar highlights the importance of effective cash-flow management and budgeting in maintaining business sustainability, meeting financial obligations and supporting informed business decisions. It explores the difference between profit and cash flow, working-capital requirements, cash-flow forecasting and budgeting techniques to help practitioners identify potential cash shortages, manage financial risks and ensure that sufficient cash is available to meet operational and statutory obligations. 

Join Russel Ngobeni for a practical exploration of cash-flow management and budgeting, covering the preparation of cash-flow budgets, management of receivables and supplier payments, calculation of break-even points and financial ratios, and analysis of budget-versus-actual performance. The webinar will also explore scenario planning, capital investment decisions and the use of management dashboards to monitor cash positions, anticipate financial challenges and take corrective action before cash-flow problems arise. 

---

Learning objectives  

By attending this webinar you will gain the following competencies: 

• Understand the difference between accounting profit and cash flow and explain the impact of cash-flow timing on business sustainability. 

• Prepare and manage cash-flow budgets, operating budgets, production budgets and capital budgets to support financial planning. 

• Identify and manage working-capital requirements by analysing inventory days, debtor days, creditor days and the cash conversion cycle. 

• Calculate contribution margins, break-even points, margins of safety and key financial ratios to support business decisions. 

• Analyse budget-versus-actual performance, conduct scenario and sensitivity analysis, and identify potential cash shortages to implement appropriate corrective measures. 

---

Content 

The webinar will cover the following topics:  

• Understanding Cash Flow 

• The difference between profit and cash flow 

• Cash inflows, cash outflows and cash-flow timing 

• The cash-flow cycle: inputs, production, inventory, sales, receivables and cash receipts 

• The impact of payment terms and operating cycles on liquidity 

• Working Capital Management 

• Working capital calculation: current assets less current liabilities 

• Inventory management and inventory days 

• Debtor days and accounts receivable management 

• Creditor days and supplier payment terms 

• Cash conversion cycle calculation and analysis 

• Working-capital requirements and funding gaps 

• Budgeting Principles and Preparation 

• The purpose of budgeting as a financial planning tool 

• Production, operating, capital and cash-flow budgets 

• Revenue forecasting and underlying assumptions 

• Fixed costs versus variable costs 

• Cost estimation and production costing 

• Budget integration and financial planning 

• Contribution Margin and Break-Even Analysis 

• Contribution margin calculation 

• Fixed costs and variable costs 

• Break-even volume and break-even analysis 

• Margin of safety calculation 

• The impact of selling prices, production volumes and costs on profitability 

• Cash-Flow Budgeting and Forecasting 

• Preparation of monthly cash-flow budgets 

• Opening cash balances, cash inflows and cash outflows 

• Forecasting debtor receipts, operating expenses, supplier payments and loan repayments 

• Minimum cash reserves and liquidity requirements 

• Identifying and anticipating cash shortages 

• Updating cash-flow forecasts to reflect changing business conditions 

• Receivables, Supplier and Statutory Payment Management 

• Credit management and customer payment terms 

• Debtor days calculation and reduction strategies 

• Supplier payment terms and creditor management 

• VAT obligations and cash-flow forecasting 

• Income tax provisioning and statutory payment planning 

• Balancing liquidity requirements with supplier relationships 

• Budget Monitoring and Performance Analysis 

• Budget-versus-actual comparisons 

• Variance analysis and investigation of deviations 

• Identification of unfavourable cost and revenue variances 

• Forecast revisions and corrective action 

• Monitoring financial performance against budget assumptions 

• Scenario Planning and Sensitivity Analysis 

• Developing downside, base and upside scenarios 

• Assessing the impact of changes in production, selling prices and costs 

• Evaluating delayed customer payments and production disruptions 

• Stress-testing cash-flow forecasts 

• Identifying financial risks and developing contingency plans 

• Capital Expenditure and Investment Decisions 

• Capital expenditure planning and affordability assessments 

• Evaluation of equipment, infrastructure and asset investments 

• Assessment of purchase, installation, financing, maintenance and insurance costs 

• Payback period and return on investment (ROI) 

• Evaluating the cash-flow impact of capital investments 

• Cash-Flow Monitoring and Management Reporting 

• Key cash-flow performance indicators 

• Weekly management dashboards 

• Monitoring bank balances and anticipated cash receipts 

• Tracking committed expenditure, outstanding debtors and available funding 

• Separating business and personal cash 

• Identifying recurring expenses and preventing cash-flow management errors 

• Ongoing Cash-Flow Management and Corrective Action 

• Updating actual financial results 

• Comparing actual performance against budget 

• Explaining variances and revising forecasts 

• Stress-testing financial assumptions 

• Identifying potential cash shortfalls