What is cash management?

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Blog by Prosperity Bookkeeping LLC

Blog by Prosperity Bookkeeping LLC

Cash flow has a profound impact on the entire business – but there’s still some confusion surrounding the concept and its practical application to your business. Understanding cash flow and cash management goes hand-in-hand with business success while ignoring can lead to disastrous results.

Cash Management

Cash management occurs when a person or process manipulates the cash inflows and outflows of a business (cash flow) by planning and manipulating those events to your business’ best advantage to result in a cash positive state more often than not, and trending toward always.

‘Best advantage’ could mean different goals to businesses at different stages of business maturity:

  • Build cash reserves
  • Reinvest in an element(s) of the business
  • Expand
  • Realize profit
  • Pay down debt
  • Protect against shortfalls and cyclicality

On a detailed level, managing cash can involve practical activities

At a high level, managing cash can involve broad planning.

Cash is best managed by looking at the present, mid-operational, and year-term.

Need help with your cash flow?

Prosperity Bookkeeping is a partner with Dryrun, the world leader in Cash Flow Management software. We fully integrate with Accounting platforms and we provide consultative services so you can get up and running quickly. We are happy to chat with you! Visit our website for more details.