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SECRETS OF SUCCESSFUL CASH MANAGEMENT 25 Foundation for Cash Accounts Policy 25 General Purpose/Central Accounts 26 Collecting Accounts 27 Disbursement Accounts 32 CONTENTS Payroll Disbursement 33 The Magic of Float 34 Short-Term Investments 36 Cash Parking Alternatives 39 Foreign Exchange 44 Cash Budgeting 47 Weaving the Cash Budget 48 Cash Projection and Monitoring 52 3. ACTION TECHNIQUES FOR MANAGING ACCOUNTS RECEIVABLE 77 Billing Design 77 Tlu' Billing Pn)cess 80 C;ash Discount Policy 83 Account Monitoring 86 5. OVERVIEW AND UNDERPINNING: DEVELOPING MANAGEMENT CONCEPTS 1 Framework of Funding Needs 1 Profits: The Framework Capstone 3 Pyramidal Symmetry 4 The Information Network 5 Better Statement Formatting 10 Keeping Ahead of Results 12 Other Forecast Methods 17 Internal Audit as a Balance Wheel 18 Problem and Success Pinpointing 20 2. 60 Information Collection 62 Non-Financial Attributes— Specific Acvounf Treatment 6-1 Heliability 68 Financial Attributes— Specific Accoimt Treatment 70 Line of Credit 74 Mcxlificafions 75 4. Record bank- ruptcies (both numbers and size; and notorious ones, too). Quite a remarkable- — and woefully incomplete — laundry list. PC's, biotech, and new industries on the one hand; the rust-belt, plant closings and disinvestment on the other.
True, the large inventory will produce more sales as just about ever- customer desire can be fulfilled. The strategic element in this program is the ail.ii)tation of the c slicel to promoting efficient operating profitability, where earnings will be of tangible (not illusory) (juality '111*- tacti( al element is found wi the linc-ilcm r«-vi;mi.i CONTENTS 1. Advertising, training, research and development, moderni/.;jtion and other hallmarks of robustness, which are the key to the fiiture, are likely to suller disproportionately, curtailing prospects and potential What's set out in these pages is a program which may be an alternative to the above scenario, but, hopefiiliy, is more a combination preventati\c- and-energizer. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. No small part of that recognition stems from the realization that overemphasis on transient earnings tends to encx)nragc cannihalization of the fundamental worth of the company, as reflected in the balance sheet. If legal advice or other expert assuslance is required, the services of a competent professional person should be sought. To succeed in these topsy-turvy times, business people have had to be both more steadfast AND more nimble. More and more managers have come to recognize the wisdom, in development of strategies and tactics, of giving the same emphasis to the PREFACE Strength of the balance sheet they have given in recent decades to the hert of the profit and loss statement.