Cash Management Essay

Cash management techniques ar an important part of managing finances. It is unattainable to see your money grow if there are not methods in place to make the most of the money that you oblige. A good write down to currency management is bud make foring, which is the process of tracking money in and turn push through to get a better idea of how money is really world spent. A budget identifies where the money is going and where adjustments ass be make to decrease expenses or increase r flatue. Along with budgeting, it is important to track expenses in order to know how much money is organism spent.Expenses can be divided into categories such as office supplies, rent and utilities. Once you have the expenses clearly laid out ship canal to decrease the expenses can be found which will allow the company to save money. unity informal way to save on office supplies is to buy in loudness or buy direct from a distributer. This will get you a lower price for the items then at retai l store and can service of process save money. Another example is with companies that have vehicles. Gas companies volunteer discount cards which could be used with all their purchases to save money.Additionally, companies that run away fleets of vehicles may benefit from contracting with a gas supplier to get their gas at a hugely discounted rate. Investing is a great way to make your money generate more funds. This can be done by investing the money in various ways to allow it to generate interest. The more money you invest or the high yield accounts that the money is in the more you will get in degenerate. For individuals, 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 forbear before it is have and invested into the account. Some companies will even match the money that is deposited into the account or match a ploughshare of the money. This helps the account grow even more. Having the money d educted 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 nest egg accounts where they can get a return for the money. This helps the companies increase their hard currency and their wealth. In addition to investing, companies need to make sure they are collecting on accounts. When they have accounts that are past due, companies are losing money and this money needfully to be regained. The accounting department of a company necessarily to go by close watch on the accounts and identify the ones that are not being paid. These accounts need to be collected in order to minimize the damage of income for the company.Lines of credit are necessary when there is a decrease in cas h 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 cover 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 sparingly as it is scoop up 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 additive expenses or regular 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 silver cash that they can use to make ends meet at the snip and will have to be paid back in the pursual months. Like with the individual, if a company is using loans frequently they will welcome themselves in debt and unable to repay it. At this point the 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 increase the amount of money being brought in while 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 disengage time to make money from that skill such as stitching or construction. Companies can generate more income by increasing selling campaigns or expanding into new sales markets to generate more money in return.