25th September 2009
Cash planning and working capital management are set to be top of the agenda for many months as lending conditions remain tight. But an interesting divide is beginning to emerge between the world’s largest and smallest businesses. Large companies are paying down bank loans at an unprecedented rate as they seek to escape the vice-like grip of the banks. With improving capital markets and business sentiment, larger businesses are turning to other sources of finance, such as debt for equity swaps, rights issues and corporate bonds and using the proceeds to pay off bank debt. But smaller businesses do not have access to the same sources of finance and may become increasingly cash starved as banks continue to shore up their own balance sheets. So once again “Cash is King” – not because of the overtrading which characterises the good times but because of worsening credit conditions. This all means that cash planning should be a priority for every business? But do they have the right tools? Next week FSN examines the market for cash flow planning and forecasting systems.