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plans and controls
the 
sources and uses of funds 
by the organisation. This is 
achieved by a range of techniques.
(a) 
Cash budgeting
, daily, weekly, monthly, quarterly and annually 
(b) Arranging 
a bank overdraft facility
; borrowing funds in the money markets and capital markets 
(c) 
Repaying
sums borrowed when the loans mature 
(d) Comparing 
actual 
cash flows 
against budget 
(e) Possibly, 
the 
cashier's duties 
of making payments to suppliers, paying wages and banking receipts 
(f) Managing 
foreign currency dealings
, to limit the firm's exposure to the risk of losses arising from 
changes in exchange rates 
1.7.5 Working capital and other matters 
A company's management of its working capital is vital for business success. Working capital consists of 
cash, accounts receivable, accounts payable and inventory. 
Receivables
. Receivables
 
can be managed by effective 
credit control
. Poor credit control has its own 
penalties. 
(a) 
Irrecoverable debts
.
Sales revenue is not received for goods sold. If the purchaser does not pay 
for goods received, and no effort is made to recover the debt, the goods have, in effect, been 
given away. 
(b) 
A company which cannot collect its debts in time might have to use bank 
overdraft finance 
to 
pay its bills. If the bank is concerned about the security of its loan, this might mean the company 
is vulnerable to increases in interest rates, and the bank's credit decisions. 
Payables. 
Many companies delay paying suppliers as long as possible. In effect, they are using suppliers 
as a sort of credit finance. Payments to suppliers are an outflow of funds. However, in the long term it 
may be more important to establish reliable commercial relationships with them than squeeze every 
pound out of them in the short term. Large companies are now required to disclose their policies on 
paying suppliers in their annual financial statements. 
Inventory. 
Inventory levels are a focus of some of the production systems discussed earlier. Inventory 
holding costs must always be managed. 
The finance department is often responsible for 
payroll
. HR and production provide details of wage 
rates, time sheets and so forth. 
1.7.6 Management accounting information 
The finance function plays a critical role in providing information to management to assist in