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
-
In manual clearing, Bank statement details are to be matched manually considering certain rules. Learn the steps involved in manual clearing of bank transactions.
-
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.
-
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.
-
Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company. Managing activities that were traditionally carried out within the general finance function. Learn about the drivers for this change.
-
Collection Float is the time spent to collect receivables. Collection float is the sum total of time taken by Invoice Float; Mail Float; Processing Float and Availability Float. Explore more!
-
Have you ever wondered what is actually a Bank Statement and why it is needed. What is the information that is available in a bank statement?
-
The Cash Management component ensures that the enterprise has sufficient liquidity for payments that are due and to monitor payment flows. Learn how treasury plays an important role in cash management for the enterprise.
-
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.
-
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'.
