Cash Management

In: Business and Management

Submitted By ashko18
Words 287
Pages 2
The Five basic Principles of cash management are , Increase the speed of receivables collections, Keep inventory levels low, Delay Payments of liabilities, Plan the timing of Major Expenditures, Invest Idle Cash, First, Speed of receivables collections is something that has to be monitored because every customer has to pay in a timely manner, this is to make sure all collection are properly handled and hopefully lead to repeat business. Next, for any business it is vital to keep inventory low because having to maintain a large inventory can be very costly and can create problems with cash on hand and business propositions. Third, Delay Payments of liabilities, this is to make sure that everything is paid on time but not so early that other payment cannot be made because of cash. Fourth, timing of expenditures, overall deals with just about every company, it is every companies goal to grow and be successful, and make sure all the operating, investing, and financing activities are properly in place for anything that is a major business venture, it is something that needs to be paid very close attention to. Finally, Investing Idle cash, in the long run, most companies invest their money that they earn back into the company to build and grow the business. Plus, making sure that the cash on hand keeps making money instead of just sitting around doing nothing; the cash is to benefit the business not sit around. Overall, the principles are all a big part of any business and if the cash budget is not carefully maintained and handled properly it could and most likely will lead to consequences. The cash management is there to improve and maintain the business, not destroy…...

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