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.
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!
The topic for this lesson is "Introduction to Cash Management Process". We start with the learning objectives for building requisite functional expertise in cash management process.
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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.
Treasury Management - Functions
Treasury management has become an specialized function. Treasury function helps in managing the Risk-return profile as well as the tax-efficiency of investment instruments. In larger firms, it may also include trading in bonds, currencies and financial derivatives. Learn about the various tasks, activities and imperatives, undertaken by treasuries in in today's context.
Cash Clearing – Accounting Entries
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Learn the steps and accounting entries that gets generated during the cash clearing process.
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