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Effective cash management strategies are used throughout the business world on a daily
basis. Many companies chose to implore tactics and strategies to help maximize their cash
holding in a variety of different ways. The modern world of business today makes it
unnecessary to physically hold onto large sums of cash. Many strategies used by
companies are geared around investing this cash in to what is commonly known as
short-term investments. How much cash is invested and how much cash is retained is a
decision that requires a lot of not only business knowledge, but also knowledge of the
overall marketplace at any given time. One of the most crucial factors in determining how
much to retain and how much to invest is being able to forecast future revenue and
expenses. A company can potentially jeopardize its operation if they commit to much, or
even dont commit enough. Money left lying around is not as beneficial as some might
think.
Managing cash is done according to the cash-flow cycle. That technique relies on the
means and methods of how money is collected and disbursed as well as how the banking
system keeps up with it. (Block and Hirt, 2005) The idea behind cash flow is becoming
increasingly more efficient in ways yet also more complicated at times due to modern
advances in technology. Some examples of increased efficiency levels can be attributed to
the creation of the virtual environment/internet. It has become common practice for people
