Cashflow Reengineering

"When evaluating a cashflow reengineering plan, there are a limited number of alternatives to consider and specific analytical processes to help you choose the right one."

"Decisions about this most critical asset?cash?are often made without thoughtfully exploring the ramifications. "

"Several popular systems for defining business objectives have confused the task of evaluating business performance."

"The principal areas to benefit from reengineering are those portions of the cashflow timeline that fall outside of traditional financial management."

"Reengineering examines the entire cashflow timeline and considers the redesign of all relevant elements."

"Often, outsourcing has more to do with an unstated "special connection" between organizations and their banks or vendors."

"Cash is an asset, but in operating terms, cash directly affects and is changed by income statement components."

"At the heart of profitability analysis is the concept of opportunity cost."

"The collection segment of the cashflow timeline involves the receipt of cash from the sale of products or services."

"The major reengineering opportunities remain in the design and timing of invoices, the conversion to retail lockbox processing, and the outsourcing of receivables processing."

"Many account payable managers are driven by two conflicting objectives."

"Internal improvement of the accounts payable function can be made by carefully reviewing and analyzing the invoice approval and authorization process."

"The banking and investment of collected monies prior to disbursing them for expenses is called cash concentration."

"There are two primary methods of outsourcing the concentration function: sweep accounts and investment management/advisory services."

"The goal in structuring the balance sheet should be to optimize the debt/equity mix."

"Maintaining current credit information on customers, carefully monitoring the receipt of payments, and contacting customers as soon as there is slippage in payment are the most effective method for assuring the prompt collection of receivables."