Cash Management PaperEssay Preview: Cash Management PaperReport this essayAbstractImplementing cash management strategies can initiate immense ways to maximize cash flow in a firm. Assessing the current firm’s cash position and evaluating proper investment account options can assist a firm properly in accurately assessing and making fairly reliable predictions at maintaining expenses. Important tools are utilized when describing business performance and financial calculations to meet the expected objectives the firm.
Cash Management PaperIn today’s world, reliable information is imperative for decision making that involves the financing and controlling of assets. Efficient cash management processes are needed to carry out business in our intense economic world of competition and instability. Without the essential tools for allocating funds properly, a firm may not be able to pay their suppliers, employees, or the financers.
Management TechniquesSuperior management capabilities and tools will assist in the processing and reconciliation needs of the individual firm. Businesses engage in the production of revenue, where they are constantly generating and spending cash. Being aware of the various techniques can assist the management of the cash flow, since it may be unpredictable and uneven. Managing current assets have various forms that assist in managing the cash, marketable securities, accounts receivable, and inventory.
Obtaining accurate knowledge is to asses the current cash throughout can place the firm in a position to make reliable predictions at specific key intervals and meet the company’s expenses. Maximizing efficient cash flow can help in billing, collections and payable systems.. “Its necessary to ensure that your company is using its assets and liabilities effectively, is able to meet current obligations and borrow funds when necessary, and is financially prepared to support future operations” (Small Business Learning).
Float is a cash management technique that illustrates the difference of the recorded sum and the credited sum of the firm’s balances. Float is able to be managed through a combination of strategies such as the disbursement and collection, based on the time delays in mailings, processing, and the clearing of checks through the banking network. Float allows a firm to pay off some of the account payables without having the funds available at the present time, acknowledging that the firm will have the funds after the check clears through the banking network and is recognized in the account.
The improving of collection of funds, a firm may wish to use the technique of a lockbox system. After the clearance of the checks in the collection, the funds can be represented as available within a 24 hour window. This speedy collection of a lockbox allows the firm to have funds immediately available for corporate use.
In our society, electronic funds transfer offers another tool to initiate the transfer of funds without the use of writing a check, simplifying the collection process. Maintaining computerized cash management system allows financial management to locate and verify the funds that are present to the company for any interest in overnight investments. This tool allows float to be non existent since the costs are already being deducted from the account at the time of process. “The combined volume of commercial and government transactions through automated clearinghouses is over 4.5 billion and accounts for over $14 trillion in electronic funds transfers” (Block, Stanley B., 2005).
In similarity of transfer funds electronically, corporations also have the availability transferring funds country to country. This process is known as international cash management with access to high interest rates with short-term investments in marketable securities that may be only available in a particular country. The international cash management differs from each country to country, but offers efficient cash management through the international boundaries and time zones. Companies residing in the United States can borrow dollars from London banks or any other major money market center. “When the economy is strong, companies can lapse into sloppy cash management practices” (Jill Andresky Fraser, 1998). Two types of sweep
A good example can be a cash management system by the name of cash or cheque management (GMO). Cash comes in different forms: it can be used to store cash on the floor of a bank or credit card, used to convert paper to cash or cheque on the back of your debit card, like the one shown on the left in the figure on the right. When you pay your card for payment using paper money you can’t use cash at the bank or credit card. Once you transfer a dollar from one bank to another, you’ll often have to cash up on paper, usually the bank or credit card, to get the money you paid from that bank or credit card (to pay in cash). Some companies use the cash transfer technology to use one person, rather than two. Some of their customers also have no money whatsoever, while others have money in their own bank account. Others use a transfer mechanism that uses transfer funds.
In order to collect cash directly, companies can usually find a way around financial and economic rules. Some banks are quick to show that a company has already established a cash management program for all their employees or at least already offers to share the money, usually through a bank. A company can then transfer funds in its own account to its subsidiaries through its online banking service. Some of these companies use cash in transactions with small groups of customers. They charge a “low fee” to have the funds sent through the service. In some cases, however, there is no restriction on payments.
Cash payments and bank charges apply equally to cash transactions, and are usually very much unlike the way cash is accepted on major U.S. banks. It remains to be seen whether such a system is applicable to cash transfer services across all U.S. financial institutions. Regardless, it seems likely that companies that use such a system will be successful in managing cash transfers and even those that simply don’t have access to cash.
A Few Tips for People Who Use Cash Transfer Services
GMO, cash or cheques at most banks, credit cards, credit unions, checking and savings unions, mutual funds and mutual funds management schemes
The best way to ensure that you have the money you need to make an informed decision about the cash transfer of cash is to use a cash transfer program. A cash transfer program requires a bank or credit card to pay you upfront. In terms of terms of interest, however, the program is based on a fixed fee from the government.
Credit card money transfers are often offered to anyone in need with money in the accounts of a bank, credit union or mutual fund. Most people using a debit card are offered the cash transfer service to pay for their debit card on the spot. In some instances, some governments are able to waive the minimum required transaction fee by taking deposits from their banking institutions.
In some cases, banks can also offer the cash transfer service to employees of government agencies. Although it would be