What are the various sources of cash in an organization. Which sources increase the cash available with the enterprise and which sources results in outflow of the cash? Let us explore!
Every successful company has a pool of cash that sustains the day-to-day activities of business.
It grows with receipts from sales and contributions and shrinks with expenditures for inventory, marketing, labor and other expenses.
The uncertainty of cash inflows and outflows creates the challenge of ensuring that sufficient funds are available at all times to support the operating cycle.
Borrowing becomes necessary when cash flow falls short of covering disbursements.
When incoming funds exceed the outflow, cash is used to repay borrowings or purchase short-term investments until the cash is needed to cover future expenses.
Financial officers need timely information to properly control and use their funds throughout the cash flow cycle.
The Basic Cash Management Process provides that timely information.
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Till reconciliation happens the amounts are parked in 'Cash Clearing Account'.
Why enterprises need cash management. What is the purpose of having a well defined cash management process?
How the inflow and outflow of cash is linked to the operating cycles of the business? Learn the cash management process in an enterprize and it's key components.
Bank reconciliation process is targeted to validate the bank balance in the general ledger and explain the difference between the bank balance shown in an organization's bank statement. Learn the reasons for existence of differences between the two.
Learning objectives for this lesson are: Meaning of Order to Cash Process; Sub Processes under Order to Cash; Process Flow for Order to Cash; Key Roles & Transactions; Key Setups/Master Data Requirements.
Before we dive into cash management, let us fist understand what we mean by cash and what constitutes cash in context of cash management process.
The terms Treasury Management and Cash Management are sometimes used interchangeably, while, in fact, the scope of treasury management is larger and includes funding and investment activities as well. Learn all about Treasury Management here!
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
Complete Bank Reconciliation Process
Bank Reconciliation Process is a eight step process starting from uploading the Bank Statement to finally posting the entries in General Ledger. Learn the Eight Steps in Detail!
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