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What is management of cash?
Management of cash is a process of collecting, managing and investing cash. Cash is the most liquid form of current assets which ensures a company’s financial stability and solvency thus management of cash is the most important areas of overall working capital. It is the responsibility of the finance department to see that various functional areas of business have sufficient cash for their various operations. On the other hand it needs to be ensured that funds are not blocked in the form of ideal cash. Hence, successful cash management not only involves avoiding insolvency, but also speeding up the collection of receivables, delay in payment of liabilities, investment of ideal cash, keeping inventory levels low and create a cash budget in order to improve a company’s overall financial profitability.
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