Cash Management Essay

Cash management techniques are an important surgical incision of managing finances. It is impossible to see your specie grow if there are not methods in place to mystify the most of the bullion that you have. A good start to cash management is budgeting, which is the process of tracking bullion in and give away to get a better idea of how cash is really being spent. A budget identifies where the capital is going and where adjustments can be made to decrease expenses or increase tax income. along with budgeting, it is important to track expenses in order to know how much currency is being spent.Expenses can be divided into categories such as office supplies, rent and utilities. Once you have the expenses clearly laid out ways to decrease the expenses can be found which will allow the company to save money. iodin easy way to save on office supplies is to acquire in bulk or buy direct from a distributer. This will get you a lower price for the items then at sell store and can help save money. An separate example is with companies that have vehicles. Gas companies offer neglect separate which could be calld with all their purchases to save money.Additionally, companies that operate fleets of vehicles may benefit from contracting with a gas supplier to get their gas at a expectantly discounted rate. Investing is a great way to make your money generate more funds. This can be done by investiture the money in various ways to allow it to generate interest. The more money you invest or the higher yield accounts that the money is in the more you will get in return. For unmarrieds, investing in a 401(K) plan at work is a great way to save money for the future.This money can be deducted directly from the pay hinderance before it is received and invested into the account. Some companies will even relate the money that is deposited into the account or match a percentage of the money. This helps the account grow even more. Having the money deducted from t he paycheck before it is received is helpful because that money isnt missed. It was taken out before the check was received and doesnt have to be calculated into a familys budget. Companies can invest their money into bonds which will generate interest and return for the company.Additionally, they could invest it in the stock market or other markets and savings accounts where they can get a return for the money. This helps the companies increase their cash and their wealth. In addition to investing, companies acquire to make sure they are collecting on accounts. When they have accounts that are past due, companies are losing money and this money needs to be regained. The accounting department of a company needs to keep contiguous watch on the accounts and identify the ones that are not being paid. These accounts need to be collected in order to minimize the loss of income for the company.Lines of credit are necessary when there is a decrease in cash flow. This could be due to a sl ow month with a decrease in revenue or income as well as an increase in expenses. Companies and individuals need a way to come up to expenses when the cash is limited. Credit plays an important role at this point. For the individual there are credit cards and home equity loans to help cover expenses when the cash isnt available. These options however should be used meagrely as it is best not to use credit and credit can be maxed out if an individual is spending more than their income.Companies can use lines of credit to help cover additional expenses or unbendable expenses when cash flow is limited. One example of credit used by a company is a short term loan. This can provide the business with extra liquid cash that they can use to make ends meet at the time and will have to be paid back in the following months. Like with the individual, if a company is using loans frequently they will find themselves in debt and inefficient to repay it. At this point the company needs to reeva luate the structure of the company and identify ways to decrease their expenses.Generating additional income is important because you want to maximize the amount of money being brought in magical spell minimizing the money going out. The individual individual can maximize the money coming in by working extra hours at work or getting a second job. If a person has a unique skill they can market themselves in their free time to make money from that skill such as sewing or construction. Companies can generate more income by increase marketing campaigns or expanding into new sales markets to generate more money in return.