A Publisher’s Cash Management Plan:
Part 1–Managing Your Cash Flow

October 2002
by Howard Fisher & Dan Siburg

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The growth and survival of your business depends on active management of one asset–cash. The simplest cash control is the mantra “Never overspend!” However many moving pieces are involved in managing cash and we’re going to cover the major components in this and subsequent articles.

Actively managing your company’s cash in-flows and out-flows allows you to meet routine financial obligations, purchase equipment, and grow your business with liquidity. Cash management is a combination of using cash controls; managing accounts receivable, royalty advances, production costs, inventory purchasing and levels, payroll and payroll taxes, and accounts payable; maintaining lines of credit; and knowing when to purchase capital assets.

Good cash management is exceptionally important for publishing companies because they face double jeopardy–slow payment from wholesalers and “payment” in the form of returns by many accounts.

 

Cash Controls

Here are three of the most important cash controls you can put in place:

 

Use Purchase Orders and Signature Authority

Stop the expense before it actually happens. Let employees know what their

signature authorization level is before they start purchasing items for the company. Control expenses and authorization levels with a purchase order system that provides documentation to management and a forecast of cash needs for a…IBPA Members – Click here to view the full article (login required).

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