Cash Management Solutions
The Concept of Cash Management
Cash management is not as easy as most people perceive because it is highly sophisticated hence understanding the proper financial tools should complement the other aspect of cash flows. Some refer to cash as the king when it comes to financial management because it is the reason why businesses are done. The precision machine company has presented its cash flow reports and the evidence shows that there is more to be done. The net cash flows are little considering the potential that is held by this company in terms of revenues. Writers who offer management case study help at Edudorm essay writing service notes that In this regard, this paper has recommended on a strategy that will help in maximizing the net income while at the same time cutting down the expenses which is in form of wages, purchases and so on. Several strategies usually collaborate to balance the cash management but the most appropriate for this company would be to manage the payables (Reider & Heyler, 2003).
The Need for Cash Management
The rate of growth for the expenses is rising at a faster rate than that of the sales and these calls upon examining the costs carefully so as to control or cut some of them off for effective Cash management. In this regard, the Precision machine company should embrace some few but effective practices to curb its situation. Experts who offer strategic management assignment help at Edudorm essay writing service indicates that first, it should consider its vendor’s offers that are usually made for early payments, use integrated methods of data storage to reduce the risk of erring and embrace regular communications with the supplier. This will keep him informed of any delays and other aspects that require trust and understanding (Reider & Heyler, 2003).
Importance of Cash Management
In addition, the company should consider cash management, planning, budgeting and monitoring the cash flows to ensure that the expenses are not surpassing the sales. A review of the previous trends of the company’s budget could also assist the current management team to improve from the baseline of the cash flows. Authors who offer operations management assignment help at Edudorm essay writing service points that the company should also consider choosing the suppliers with the lowest price to make the payments remain flexible. This strategy could relieve the company from the strain of uncontrolled outflows. The resultant net revenue would have increased the net profit hence achieving its cash flow goals (Reider & Heyler, 2003).
Factors that Influence Cash Management
Cash management is dependent on numerous factors among them being categorized as market forces while others as economic factors. Marketing forces are those that are dependent of the nature of the market in terms of the customers and the position of the customers. Among the market forces, the nature of the customer needs is a considerable factor for this company. Tutors who offer corporate strategy assignment help at Edudorm essay writing service acknowledges that the greatest task for any company is to identify the needs of the customer so as to provide that which aligns with their expectations. Next is the presence of new competitions. This usually occurs when companies merge or get into an acquisition. In general, the market forces will attribute to the pricing changes hence cause a corresponding change in the cash flows. This has an impact on the financial planning of a company (Reider & Heyler, 2003).
Economic Factors
Some of the economic factors that influence cash management include inflation and changes of the rates of interest. Variations of exchange rates which are usually caused by global economic fluctuations have a direct influence on the financial planning of a company. Mentors who offer business development assignment help at Edudorm essay writing service recognizes that the rates of interest would affect the company if it had purposed to borrow a loan for its funding. If the rates are high, the planners will be forced to budget more into the interest rates and otherwise to the vice versa (Reider & Heyler, 2003).
Reference
Reider, R., & Heyler, P. B. (2003). Managing cash flow: An operational focus. Hoboken, N.J: Wiley.
