Cash management refers to the process of managing an organization’s cash flow to ensure that there is enough cash available to meet the company’s financial obligations. This involves monitoring cash inflows and outflows, forecasting future cash needs, and making decisions about how to allocate cash resources. Effective cash management is critical for businesses of all sizes, as it helps to ensure that the company can pay its bills on time, avoid costly overdraft fees, and maintain a healthy financial position. Cash management strategies may include optimizing cash collections, managing cash disbursements, investing excess cash, and using financial instruments such as lines of credit or short-term loans to manage cash flow fluctuations. By implementing effective cash management practices, companies can improve their financial stability, reduce financial risk, and position themselves for long-term success.
