What is Cash
Before we dive into cash management, let us fist understand what we mean by cash and what constitutes cash in context of cash management process.
Simply put, cash is money that you can access.
Businesses get cash by selling their products and services. However, businesses also have a variety of additional sources they can tap into when they need cash, called cash equivalents.
These are safe short-term liquid securities that can be converted to cash relatively quickly.
Cash equivalents are short-term investments that can be readily converted into a known amount of cash.
A business considers cash equivalents to be the same as cash in the bank.
Some examples of cash equivalents are investments that mature in less than three months, money market funds, certificates of deposit (or CDs), bonds with short maturity dates and commercial paper.
Related Links
You May Also Like
-
In the previous article we talked about the meaning of the account reconciliations. Now as you now the definition of account reconciliation, in this article let us see why it is carried out.
-
Although there is no straight forward answer to the question, how to best organize a treasury function, this article provides an generic view of the way large MNCs creates departments or sub-functions within the treasury function.
-
Learning objectives for this lesson are: Meaning of Order to Cash Process; Sub Processes under Order to Cash; Process Flow for Order to Cash; Key Roles & Transactions; Key Setups/Master Data Requirements.
-
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
-
Suspense and clearing accounts resemble each other in many respects but there exists important fundamental difference between the two. Read more to explore these differences.
-
Disbursement Float is the time taken from payment creation to settlement. Collection float is the sum total of time taken by Payment Float; Mail Float; Processing Float and Availability Float. Learn more!
-
Account Reconciliation – How? Learn the three key attributes to perfom account reconciliation.
-
So many codes in the lines that are there in a Bank Statement. It contain lots and lots of meaningful information that can help automated many tasks. Explore more!
-
Collection Float is the time spent to collect receivables. Collection float is the sum total of time taken by Invoice Float; Mail Float; Processing Float and Availability Float. Explore more!
-
Many different accounts are used in finance. Understand the representation and nature of clearing account in context of accounting, finance and ERP Systems.
