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According to Wikipedia ", cash management, or treasury management, is a marketing term
for certain services offered primarily to larger business customers. It may be used to
describe all bank accounts (such as checking accounts) provided to businesses of a certain
size, but it is more often used to describe specific services such as cash concentration, zero
balance accounting, and automated clearing house facilities. Sometimes private bank
customers are given cash management services."
What is Cash management According to Websters Dictionary, "cash management is the
way in which a person or organization manages money." Cash management is a huge
responsibility for a financial manager; which is the key to running a successful business.
Financial managers must maximize a firms value, and value is based on cash flow. One of
the duties of a financial manager is to determine how much cash should be on hand to run
a business adequately. With cash being a nonproductive asset, cash generates no return at
all. An example would be a bank a bank makes money off there customers by investing,
distributing loans, and other financial services as needed. Just suppose your bank just took
the deposit and never moved the money around to make interest off of your money, that
bank would not be in business long. When holding money it causes a lower return or no
return.
Cash management has five components which assist financialmanagers in making
decisions on what to do with what cash. These components are (1) cash flow, (2) using
float, (3) accelerating collections, (4) getting available funds to where they are needed, and
