Cash ManagementCash ManagementAccording to Wikipedia “, cash management, or treasury management, is a marketing term for certain services offered primarily to larger business customers. It may be used to describe all bank accounts (such as checking accounts) provided to businesses of a certain size, but it is more often used to describe specific services such as cash concentration, zero balance accounting, and automated clearing house facilities. Sometimes private bank customers are given cash management services.”
What is Cash management According to Websters Dictionary, “cash management is the way in which a person or organization manages money.” Cash management is a huge responsibility for a financial manager; which is the key to running a successful business. Financial managers must maximize a firms value, and value is based on cash flow. One of the duties of a financial manager is to determine how much cash should be on hand to run a business adequately. With cash being a nonproductive asset, cash generates no return at all. An example would be a bank a bank makes money off there customers by investing, distributing loans, and other financial services as needed. Just suppose your bank just took the deposit and never moved the money around to make interest off of your money, that bank would not be in business long. When holding money it causes a lower return or no return.
Cash management is important as any company will have. In a business the average person will be able to make $20M-$30M per year.
In comparison to a traditional bank, which generates $20M per year, a cash management company that makes $15-25M
An investment manager can grow your business value as much or as little as he/she wants or needs, with his/her own money. It should take his/her hands off the lever.
Your cash management may be less profitable than a traditional bank, but it is still the most expensive. The difference is that as the number of cash payments, transaction fees, and costs increases the value of money will increase. It may not be possible to get to $20M over 10 years at one company. So it may be a good idea to keep in mind the above three reasons. The first one is that any one of those companies will have a cash management company and a cash management system that’s better than a typical retail-only company.
Many cash management companies work with an automated system that takes an interest on your money and collects or compiles the required cash receipts, in a manner similar to cash management.
This type of cash management allows for a greater number of services while you’re working more and more independently.