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Cash Management

By | August 2008
Page 1 of 3
Cash Management Paper

Cash Management Paper
Jim Matseen
MBA 503/ University of Phoenix

It is a real challenge for even the largest firms in the world to manage and sustain working capital while managing the flow of cash through-out the organization. There are techniques or strategies to ensure that your operation makes the best use of its available cash. They combine cash flow budgeting and resources from outside the walls of the company. This may take tons of diligent research and wherewithal to find the right match but can pay off in the long term planning for your company. The techniques we will look at include cash flow management options, managing your working capital, effectively managing business risks, and monitoring your cost and inventories.

Cash Flow management
Cash management in handled though the cash-flow cycle. …”This cycle relies on when and how funds are collected as well as paid out and how fast the banking system is (Block and Hirt, 2004).” Banks and other financial institutions are eager to provide your company with a range of cash-management services that offer convenience and opportunities to better manage your cash flow. Most banks have business-banking centers that focus on lending and relationship building with small and midsize businesses. Some of the cash-management options these service centers offer include: Lines of credit, lockbox services, electronic bill payments, sweep accounts and payroll services. Collecting receivables is another technique used in cash flow management. This is a strategy that requires aggressive collection of overdue accounts. It reduces the time between delivering the product or service to the customer to assuring payment is received by the customer in a shorter cycle. It is very important and beneficial to do this because this is cash just sitting there you just need to bring it to the business.

Managing your working capital
“Working capital is the...

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