Management of Cash

Management of Cash:

In financial management, the management of cash can simply effect on your working capital optimization. When management of cash is not good, you will not do well to manage your working capital. Therefore, you must understand regarding the meaning of management of cash.

Meaning of management of cash:

Cash is the most liquid asset just similar to petrol. Therefore, it is very simple that someone can take it from your control. The management of cash teaches us to control cash in such a manner that:

i) No one can get it devoid of our permission.
ii) It is sufficient for operation of company.
iii) Enhanced system of collection and payment of cash

Management of Cash is the function of treasury department of company. Following are major things which are needed for appropriate management of cash:

A. Bank Reconciliation:

In now days, all business deals are accomplished with banks. You have so many cheques to go to bank for collection and number of cheques are issued to other parties. However, you cash book does not match with your bank statements. For appropriate cash management, you must learn bank reconciliation. It means to take care the causes of not matching cash book with bank statements.

B. Management of Online Cash:

Your business might be fast online just similar to e-bay or Amazon. All such sites give you secure payment section for buying products. However, their treasury department has to do hard work to administer online cash. All online cash is watched by the treasury experts.

C. ATM Transfer:

Even ATM transfer can be found from the bank statements. However special care of ATM transfer will be obliging to your for better management. Company's officer might use ATM transfer for paying money to abroad staff. Therefore, treasury audit officer must check whether it is issued to correct employee by appropriate authority.

D. Proper Transfer of Store or department cash:

When there is big number of stores of your company, at that time, appropriate transfer of store cash to head office is very essential. Only use single bank account for all stores is not a good method. Use different bank account for various store or department. When transfer the money to that bank account, it can be tracked. After all different banks transfer to chief bank account.

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