Payroll, credit terms, and cash flow timing
FREE03 – People Professionals and Finance
This CIPD Level 0 video from the FREE03 – People Professionals and Finance unit explores the critical relationship between profit and cash flow, specifically examining how payroll, credit terms, and cash flow timing affect organisational liquidity. The video addresses assessment criteria AC 1.2 by explaining why a profitable business can still face cash pressure, covering essential concepts including seasonality, late payment impacts, and payroll as a cash commitment. By watching this content, learners will understand the distinction between profit and cash, equipping them to recognise why cash flow management matters for HR professionals working within finance-conscious organisations.
Assessment Criteria 1.2
Explain the difference between profit and cash and why it matters.
Indicative Content
To include: cash flow timing; liquidity; payroll as a cash commitment; seasonality; credit terms; impact of late payments; why a profitable business can still face cash pressure.
What You'll Learn
Video covering: Payroll, credit terms, and cash flow timing
About FREE03 – People Professionals and Finance
To develop learners’ understanding of essential finance concepts in business and how people professionals use financial insight to support workforce decisions, budgets and organisational performance.
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