What is Cash Management?
Cash management refers to managing a business’s cash flow to make sure that it has enough funds to function in its daily operations. It suggests the utilisation of cash to ensure maximum liquidity and profitability. Cash management is concerned with monitoring, analyzing, and managing cash inflows, outflows, and cash balances held by the firm at a certain point by financing the deficit or investing surplus cash. Management of cash is an essential component of overall working capital management since cash is the most liquid type of current asset. It is a key factor in the financial stability of an organisation.
Geeky Takeaways:
- Cash management, also known as treasury management, is a process that involves determining and managing the cash flow which is
- In cash management, the word cash not only includes money in the form of currency but also includes liquid assets like marketable securities and time deposits.
- It aims to ensure that a company’s funds are not idle and are being used efficiently to maintain a sound cash flow position.
- The cash flow statement is the main element of corporate cash flow.
Table of Content
- Objectives of Cash Management
- Importance of Cash Management
- Functions of Cash Management
- How does Cash Management Work?
- Examples of Cash Management
- Types of Cash Management
- Cash Management Strategies
- What does Working Capital Include?
- Benefits of Cash Management
- Limitations of Cash Management
- How to Improve Cash Management?
- Frequently Asked Questions (FAQ)