What are the various sources of cash in an organization. Which sources increase the cash available with the enterprise and which sources results in outflow of the cash? Let us explore!
Every successful company has a pool of cash that sustains the day-to-day activities of business.
It grows with receipts from sales and contributions and shrinks with expenditures for inventory, marketing, labor and other expenses.
The uncertainty of cash inflows and outflows creates the challenge of ensuring that sufficient funds are available at all times to support the operating cycle.
Borrowing becomes necessary when cash flow falls short of covering disbursements.
When incoming funds exceed the outflow, cash is used to repay borrowings or purchase short-term investments until the cash is needed to cover future expenses.
Financial officers need timely information to properly control and use their funds throughout the cash flow cycle.
The Basic Cash Management Process provides that timely information.
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Till reconciliation happens the amounts are parked in 'Cash Clearing Account'.
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.
Many different accounts are used in finance. Understand the representation and nature of clearing account in context of accounting, finance and ERP Systems.
Unravel the mystery behind clearing. Why we use clearing accounts. Find the relevance of word "Clearing" in business context.
Complete Bank Reconciliation Process
Bank Reconciliation Process is a eight step process starting from uploading the Bank Statement to finally posting the entries in General Ledger. Learn the Eight Steps in Detail!
The Cash Management component ensures that the enterprise has sufficient liquidity for payments that are due and to monitor payment flows. Learn how treasury plays an important role in cash management for the enterprise.
What is Account Reconciliation?
Before you understand the Bank Reconciliation Process it is important to understand what is account reconciliation and why it is carried out.
Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company. Managing activities that were traditionally carried out within the general finance function. Learn about the drivers for this change.
Why enterprises need cash management. What is the purpose of having a well defined cash management process?
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