The main importance or significance of cash management can be highlighted as follows:
1. Meet Daily Requirements
Effective cash management helps to fulfill daily cash requirements in the organization.
2. Investment Opportunity
It provides adequate cash for investment in the profitable venture.
5. Prevents Bankruptcy
Efficient cash management helps to avoid bankruptcy.
It provides adequate cash for investment in the profitable venture.
3. Cash Inflow/Outflow
Proper cash management helps to manage cash inflow and outflow
Proper cash management helps to manage cash inflow and outflow
4. Financial Stability
Another importance of cash management is that it helps to maintain solvency and financial stability of the business.
Another importance of cash management is that it helps to maintain solvency and financial stability of the business.
Efficient cash management helps to avoid bankruptcy.
6. Meet Financial Obligations
It helps to meet current financial obligations of the business firm.
It helps to meet current financial obligations of the business firm.
7. Discount Benefit
It helps the firm to get the benefit of cash discount and special purchase.
It helps the firm to get the benefit of cash discount and special purchase.
8. Operational Efficiency
It ensures smooth operation of the business activities by providing adequate cash to purchase raw materials and other needs.
It ensures smooth operation of the business activities by providing adequate cash to purchase raw materials and other needs.
9. Profitability And Productivity
It helps to improve productivity and profitability of the firm.
It helps to improve productivity and profitability of the firm.
10. Maintain Creditworthiness
Effective and proper cash management helps to build build goodwill and creditworthiness of the business firm.
Effective and proper cash management helps to build build goodwill and creditworthiness of the business firm.
