Cash Management

Submitted by: Submitted by

Views: 279

Words: 1567

Pages: 7

Category: Business and Industry

Date Submitted: 10/01/2012 05:50 AM

Report This Essay


Top of Form

 Powered by JRank

Bottom of Form

Reference for Business

Encyclopedia of Business, 2nd ed.

Reference for Business » Encyclopedia of Business, 2nd ed. » Bo-Co » Cash Management


Ads by Google

Bill Payment Services - List of Bill Payment Services in Bangalore. Call Now! 

Make Huge income at Home - Sign Up to XForex ™ And Learn How To Increase Your Monthly Income. - 

Course in Risk Management - NISM offers CFERM for working professionals. Flexible schedule. - 

New Projects in Kolkata - Buy Apartment, Villas, Flats, House & Bungalows. Get the Best Deal Now! - 

Cash management is a broad term that refers to the collection, concentration, and disbursement of cash. It encompasses a company's level of liquidity, its management of cash balance, and its short-term investment strategies. In some ways, managing cash flow is the most important job of business managers. If at any time a company fails to pay an obligation when it is due because of the lack of cash, the company is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the prospect of such a dire consequence should compel companies to manage their cash with care. Moreover, efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firm is exposed.

Cash management is particularly important for new and growing businesses. As Jeffrey P. Davidson and Charles W. Dean indicated in their book Cash Traps, cash flow can be a problem even when a small business has numerous clients, offers a superior product to its customers, and enjoys a sterling reputation in its industry. Companies suffering from cash flow problems have no margin of safety in case of unanticipated expenses. They also may experience trouble in finding the funds for innovation or...