What is Cash
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.
Simply put, cash is money that you can access.
Businesses get cash by selling their products and services. However, businesses also have a variety of additional sources they can tap into when they need cash, called cash equivalents.
These are safe short-term liquid securities that can be converted to cash relatively quickly.
Cash equivalents are short-term investments that can be readily converted into a known amount of cash.
A business considers cash equivalents to be the same as cash in the bank.
Some examples of cash equivalents are investments that mature in less than three months, money market funds, certificates of deposit (or CDs), bonds with short maturity dates and commercial paper.
Related Links
You May Also Like
-
Cash Management - Integrations
Cash Management integrates cash transactions from various sources like Receivables, Payables, Treasury and creates reconciliation accounting entries after matching transactions with Bank Statements.
-
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!
-
Account Reconciliation – How? Learn the three key attributes to perfom account reconciliation.
-
Suspense and clearing accounts resemble each other in many respects but there exists important fundamental difference between the two. Read more to explore these differences.
-
Effectively using cash management with trade finance products brings tangible benefits to both corporates and financial institutions.Learn the various benefits of cash management process.
-
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'.
-
Unravel the mystery behind clearing. Why we use clearing accounts. Find the relevance of word "Clearing" in business context.
-
In manual clearing, Bank statement details are to be matched manually considering certain rules. Learn the steps involved in manual clearing of bank transactions.
-
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!
-
Bank Reconciliation is a PROCESS to Validate the bank balance in the general ledger With Bank Statement. Learn the bank recon process.
