What is Cash Management?

What is Cash Management?

In the simplest terms, cash management is the process of collecting and managing cash flows and is a key component of a business organization’s financial stability.

Within a business, cash management (also called treasury management) refers to the process of managing operations or business activities, financial investments, financing activities, and mitigating associated risks. Larger companies may have a department dedicated full-time to the function of treasury management and cash management.

In the banking and financial services world, cash management refers to the advisors and specialized products and services designed to help organizations across all industries and sectors to streamline the collection, disbursement, and reporting of their cash flows.

Why is Cash Management Important?

Cash is the primary asset used to pay obligations on a regular basis. Managing company cash inflows and outflows allows a business to meet payment obligations, plan for future payments, and maintain adequate business stability to support the business’ daily operation, growth, and expansion.

There are several key metrics that organizations monitor and analyze on a daily, monthly, quarterly, and annual basis. Daily reviews of cash received from accounts receivable, cash paid for accounts payable, cash paid for investing, and cash paid for financing are tracked and reported to monitor how much cash a company has readily available.

Customized banking products and services can help a business to speed up the collection and deposit of incoming funds, schedule outgoing payments, and report on the movement of funds and account balances. It is important to periodically review the cash flows of the business and the products and services in use to determine if changes are needed.

If you would like to speak to an Enterprise Banker about Cash Management products and services to help your business increase operational efficiency, we invite you to call us at 877-671-2265.

*Investment products are not a Deposit, not guaranteed by Enterprise Bank, are not FDIC Insured, not Insured by any government agency, and may lose value.

More Learning

Glossary of Cash Management Terms

Brush up on your cash management terminology with this glossary of terms. 

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