Cash Management Processes

1. Thomas W. Zimmerer
Norman M. Scarborough
Doug Wilson

2.  Cash management is the process of forecasting,
collecting, disbursing, investing, and planning for cash
a company needs to operate smoothly. They further
added that cash management is a vital task because it
is the most important yet least productive asset that a
small business owns. A business must have enough
cash to meet its obligations or it will be declared
bankrupt. Creditors, employees and lenders expect to
be paid on time and cash is the required medium of
exchange.

4.  Controlling accounts receivables requires business
owners to establish clear, firm credit and collection
policies and to screen customers before granting them
credit. Sending invoices promptly and acting on past
due accounts quickly also improve cash flow. The goal
is to collect cash from receivables as quickly as
possible.

5.  When managing accounts payables, a manager's goal
is to stretch out payables as long as possible without
damaging the company's credit rating. Other
techniques include verifying invoices before paying
them, taking advantages of cash discounts, and
negotiating the best possible credit terms