Financial Control

• There's no doubt we've got to tighten up on financial control. Peter, you are in charge of credit control. What do you suggest?

• Well, I've been looking at our payment terms - in other words how long we have to wait for payment - we must reduce the average delay in payment. It's nearly 45 days now from the date we send out the in-voice. We've got to get it down to near 30 days. It's not easy. The sales people always argue it is bеttеr to wait for payment rather than lose a customer, but I think we can tighten up on reminders, statement an & so on.

• What about our payments to suppliers?

• Well, that's more difficult. We are a small firm dealing with big suppliers. They don't have to help-us. Still, maybe one or two of our older suppliers could give us better payment terms.

• Right. Let's look at some more general cost-cutting measures we can take. I'm interested in support services training and personnel development.

• Look. I think we simply mustn't cut these services. They are our long-term investment in people.

• Maybe, but we've got to reduce costs somehow. We can't cut in the production area.

• But our training budget is already very limited. Most of the training programmes are long-term.

• I'm not saying we have to stop any existing programmes but perhaps we should look carefully at future training courses.

• Well, I can let you have details of what we plan. I think you'll see that they are all worthwhile investments.

• I'm sure. Anyway, let me have the programme and we'll discuss it later. We'll have to stop now. I've got another meeting.

• I must be off too. Good-bye.

The Budget Meeting

• Let's get started. Now, you've seen the budget proposals for next year. Rave you got anything to say?

• I think the research figure is too low. We should increase it by at least 5%.

• Well, we could do that, but it means less money for the other departments. I think it should stay the same.

• I agree. We can reduce the figure for marketing, that would allow us to increase the budget for research.

• I felt marketing needed a good figure this year. They've got a big launch mid-year. I think they couldn't manage with less.

• I'm sure they could and ...

• Just a moment. Let's look at the other two department budgets. That's production and sales.

• Well, we can't cut the production budget, that's for sure. I don't know about sales.

• Why do you say we can't cut the production budget? They had a big investment last year. I'm absolutely certain, they could manage on less this year.

• Maybe you are right. Production ought to manage with less money this year, having spent so much last year.

• I'll tell you what: a small cut in the production budget might mean we could increase the research figure.

• Right you are. I'll put that to the Production Manager. Finally, what about sales?

• I think it's a bit high. They might save a bit by spending less on the after-sales side.

• If you ask me, my answer will be: we should spend more on sales.

• That's out of the question. The figure shouldn't be changed.