FIN MGMT
1. Select an organization of your choice and discuss the cash Management system in that organization. Give your Views or suggestions on the prevailing system of cash management in that organization and any suitable changes to be brought about, to improve the present system?
Cash management is a set of strategies or techniques a company uses to collect, track and invest money. Although cash by definition refers only to paper or coin money, in cash management, companies usually also work with cash equivalents such as checks. This is becoming increasingly common as the money system becomes more abstract, using electronic methods.
Cash management lets companies process and use their money in such a way that they have adequate funds available for regular costs like paying employees. It ensures that the company has some money for the things they did not plan on, such as a higher-than-expected increase in the cost of materials. The business also uses these techniques to check that people are paying as they should and that the funds are used for their original intent—that is, it prevents payment loss and heightens financial and overall operational accountability. These strategies influence cash flow, as well, making it more likely that the business will have the funds it needs at the right time.
Considering an example of Dimensional Info Tech, we have following cash management practices in use.
Use online banking (e.g., electronic fund transfers, online bank reconciliations on a daily basis)
Consolidate bank accounts
Implement an automatic cash application system
Post checks from photocopies in order to avoid delays in check posting
Collect receivables through lockboxes
Implement physical cash sweeping (e.g., zero-balance accounts)
Verify cash discounts
Implement a materials management system (e.g., material requirements planning)
Time invoice payments
Explain each of them….. Got this info from these websites
Cash management is a set of strategies or techniques a company uses to collect, track and invest money. Although cash by definition refers only to paper or coin money, in cash management, companies usually also work with cash equivalents such as checks. This is becoming increasingly common as the money system becomes more abstract, using electronic methods.
Cash management lets companies process and use their money in such a way that they have adequate funds available for regular costs like paying employees. It ensures that the company has some money for the things they did not plan on, such as a higher-than-expected increase in the cost of materials. The business also uses these techniques to check that people are paying as they should and that the funds are used for their original intent—that is, it prevents payment loss and heightens financial and overall operational accountability. These strategies influence cash flow, as well, making it more likely that the business will have the funds it needs at the right time.
Considering an example of Dimensional Info Tech, we have following cash management practices in use.
Use online banking (e.g., electronic fund transfers, online bank reconciliations on a daily basis)
Consolidate bank accounts
Implement an automatic cash application system
Post checks from photocopies in order to avoid delays in check posting
Collect receivables through lockboxes
Implement physical cash sweeping (e.g., zero-balance accounts)
Verify cash discounts
Implement a materials management system (e.g., material requirements planning)
Time invoice payments
Explain each of them….. Got this info from these websites