Tuesday, April 9, 2019
Cash Management Essay Example for Free
Cash Management EssayCash management techniques are an important get appear of managing finances. It is impossible to see your notes grow if there are not methods in place to imprint the most of the coin that you have. A good start to cash management is budgeting, which is the process of tracking bills in and out to get a better idea of how bullion is really being spent. A budget identifies where the coin is going and where adjustments can be made to decrease expenses or increase revenue. on with budgeting, it is important to track expenses in order to know how much capital 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. atomic number 53 easy way to save on office supplies is to bargain for in bulk or buy direct from a distributer. This will get you a lower price for the items then at retail store and can help save money. An otherwise example is with companies that have vehicles. Gas companies offer send away card which could be habitd 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 majusculely discounted rate. Investing is a great way to make your money generate more funds. This can be done by expend 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 various(prenominal)s, 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 plosive speech sound before it is received and invested into the account. Some companies will even snatch 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 the 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 aim 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 remnant 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 slow month with a decrease in revenue or income as well as an increase in expenses. Companies and individuals need a way to get through 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 slenderly 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 invariable 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 ineffectual to repay it. At this point t he company needs to reevaluate 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 eyepatch minimizing the money going out. The individual psyche 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 change magnitude marketing campaigns or expanding into new sales markets to generate more money in return.
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