Cash flow planning allows you to effectively distribute the budget. But in practice, often there is a lack of funds due to uneven income and violation of payment terms. So there are cash gaps. This is usually an inevitable problem in any enterprise. But a well-coordinated payment control system helps to cope with it.
Essence
Cash gap (in English cash gap) is a temporary lack of funds. It occurs when there is a need to spend money, but there are no planned receipts. Cash problems can arise in organizations of all forms of ownership. The concept of a “cash gap” should not be confused with a “budget surplus”. In the first case, we are talking about the uneven flow of funds, and in the second, the excess of income over expenses.
Background
Cash gaps are a common occurrence in enterprises. The reasons for its appearance may be:
- replenishment of resources due to short-term bank loans;
- uneven expenses;
- provision of a commodity loan;
- sale of goods at a discount;
- quick sale of assets.
Prevention
To control cash flows, enterprises draw up budgets for cash flows (BDS) and income, expenses (BDR). Based on these documents, a "Payment Calendar" is formed, which indicates to whom, how much and when to transfer money.
Another way to manage cash gaps is to control receivables. You can try to stimulate counterparties to quickly return funds by providing them, for example, bonuses for future purchases.
By providing a commodity loan, an enterprise should:
- keep records of settlements with debtors;
- rank debt;
- set the correct loan limits;
- carry out claims work on overdue amounts.
But it is worth remembering that even if a company maintains a clear cash control system , this does not mean that it will not have cash problems.
Short-term loans
For a temporary solution to the problem, you can try to negotiate with suppliers a deferred payment. Counterparties are most often interested in continuing cooperation with regular customers. Having received financial assistance once, the company is unlikely to change the supplier.
The cash gap at the enterprise can be corrected by factoring. Banks redeem receivables only for trusted customers and at a large discount (up to 25%). This measure is more suitable for large enterprises that need several sources of financing.
To finance the cash gap, you can get an overdraft or a loan at the bank. If the time between expenses and cash flow to the account will be just a few hours, then it is better to use an overdraft. To receive it you need to provide a deposit. The paperwork process will take much less time. The limit usually does not exceed 50% of the revenue for the past month.
Loans
You can also get a regular loan from a bank to finance cash flows. But without a guarantee, the amount can be very small. To get a loan in the right frame and in advance, you should follow simple rules:
- Applications for loans must be submitted simultaneously to several banks. So it is possible, firstly, to distribute the general need for borrowed funds, and secondly, to earn a positive credit history in several institutions at once. Beginners have to wait longer, but when you apply again, the terms and conditions of service can be revised in favor of the client.
- Cash gaps are a lack of cash to finance current needs. Therefore, it is better to apply for a loan not for a large (10-15%) amount. Only in this case is it possible to get the really necessary amount of cash. The reduction of the cash gap in this case will be accompanied by an increase in the cost of securing a loan ( inventory valuation , property insurance, etc.) and payment of an unused limit (1% of the amount).
- If possible, provide security that does not require state registration as security, that is, anything but real estate. If OS is used in this capacity, then you should try to get access to funds before registering a mortgage agreement. Some banks make such concessions.
- Handle a new application in advance. For example, a month before the end of the old contract, draw up a new one under the same security. The next month, most of the proceeds go to repay the loan, and all current needs are financed by a new loan.
Example
The company received its first loan in August 2015 in the amount of 10 million rubles. on the security of the room. The contract provides for two payments - in August and September of the same year - 5 million rubles each. If it is a credit line, then the amount can be repaid in installments in a month. The main thing is to meet the monthly deadline.
In September, the company entered into another contract for the same 10 million rubles. under the repeated pledge of the room. But the document stipulates that the total debt under both agreements in August should not exceed 10 million rubles.
As a result, there are 2 contracts for the same amount, but with different terms. Revenues received in August (5 million rubles) are used for full repayment of the first loan (in September). All current payments are made at the expense of a new loan. This scheme ensures the safety of working capital.
How to calculate the cash gap?
For an example of costing, let’s take a dairy company. Purchases are made on Mondays with payment for the goods on a daily basis. Sale is carried out on a deferred payment basis for 5 days. Cash gap arises in case of violation of the terms of payment by debtors. On Monday, goods worth 1 million rubles were shipped. and at the same time milk purchased for 0.5 million rubles. After paying for the raw materials, the company has 0.1 million rubles left in the account. For the first 5 days, the debtor paid only 200 thousand. There is nothing to pay for delivery next week. There is a shortage of cash in the amount of 300 thousand
Such a simple calculation of the cash gap is possible only in small enterprises. In other cases, you should use the formula:
DS + P - O = ODS, where:
- ODS - cash balance per day;
- DS - account balance at the beginning of the day;
- P - receipt of money;
- About - payment of the current day.
Cash gaps are the negative value of the odds. In addition, it is necessary to analyze stock balances. Perhaps there will be no need for new purchases.
Tax will wait
Cash gaps hit the company's reputation, spoil the credit history, impede work. Especially difficult situations are when you have to choose between payments to the budget and counterparties. Some companies have begun to use a simple algorithm.
Providing a tax return to the fiscal authorities, it is necessary on the same day or a little earlier (VAT, NPP, single tax) to transfer funds to the budget. But no one is in a hurry to draw up a payment order. A penalty is charged on a “hung” payment. But sometimes it’s more profitable to pay a fine to the budget than to cover the cash gap with another loan.
Example
LLC has calculated an advance payment on NPP for the II quarter in the amount of 1 million rubles. The company must also transfer 04.08 to the supplier 0.9 million rubles. In late August, the organization plans to receive a payment of 3 million rubles from the debtor. As of July 28, there is 1 million in the account. We will calculate the cash gap: 1 + 0 - (1 + 0.9) = - 0.9 million rubles. Consider two ways to finance the enterprise.
Option 1
- July 28, the company submits a tax return and transfers funds in the amount of 1 million rubles.
- July 31, the company takes a loan of 1 million rubles. under 20% for 1 month; at the expense of these funds, she pays the debt to the counterparty - 0.9 million rubles.
- 08.20 received a payment from the debtor in the amount of 3 million rubles. LLC returns borrowed funds and interest.
We calculate the overpayment: 20% / 12 = 1.67%.
Amount to be refunded: 1000 + 1000 x 1.67% = 1016.7 thousand rubles.
That is, the overpayment is 16.7 thousand rubles.
Option 2
- July 28, the company submits a declaration, but does not refund the funds.
- 03.08 LLC repays the debt to the supplier in the amount of 0.9 million rubles.
- 08.20 arrives 3 million rubles. from the debtor.
- August 21, the company transfers an advance payment of 1 million rubles to the budget. and accrued interest.
Payment:
The number of days of delay - 24. Refinancing rate - 11%.
Penalty amount: (1000 x 24 x 11%) / 300 = 8.8 thousand rubles.
Conclusion: it is beneficial for a company to delay an advance tax payment. Then the cost savings will amount to 7.9 thousand rubles.