Importance Of Developing A Total Cash Management Strategy

Navigating through a turbulent period of economic crisis is never easy for the corporate houses and for survival CEOs are required focus upon building business resilience depending upon the exact current situation. They are also required to come up with new and innovative total cash management strategies considering a number of key issues.

In any stage of corporate business cycle, working capital management is considered as a vital issue, as during good times a business may be lacking in these practices and might leave your business vulnerable if and when the conditions deteriorate. Business enterprises are now required to make sure that the decisions they make are based upon relevant data and also ensure that the reporting and information systems developed by them are up-to-date and accurate so that all information is always available for making prompt decisions.

Some of the most important decisions that a modern day CEO is required to take are regarding cash flow management and liquidity matters. This is because increasing cash flow is an important element for building trust between the financiers and the stake holders and if a company fails to do this – it is going to face a lot of risk under the present conditions. It must be admitted that for any business cash is the lifeblood and even though a business becomes able to generate substantial accounting profit – it has little chance of surviving without sufficient cash flow. This has become all the more important as the global economy has been passing through a long period of extreme uncertainties and cash management has become the topmost priority for most of the corporate houses. But in reality even large and apparently well managed businesses are facing acute shortage in cash flow that is often reflected in their decision making and other management issues.

Here are a few factors those are playing important roles in the present day cash management strategies:

  • Proper execution of budgeting and cash forecasting
  • Bringing outgoings in line with reduced revenue
  • Unlocked credit lines
  • Taking necessary actions for crystallizing unplanned cash outgoings like tax obligations or making employee termination payments
  • Balancing excessive stocks and debtors from going out of control
  • Identifying and repairing weak and inefficient financial structures
  • Getting rid of business processes and structures those are excessively complex and absorb unnecessary cash
  • Reviewing and revisiting old capital spending programs for making them better suitable to the current conditions

A number of recently conducted surveys suggest that a positive link exists between efficient working capital management policies and the profitability and overall business performance of a company. Companies those are able to make accurate cash flow forecasts are found to be more profitable and it might not be a farfetched conclusion that accurate cash flow forecasting is actually a symptom of realistic business forecasting. Companies those are embracing total cash management strategies are expected to have better chances of surviving the turmoil. More expert advice and information is now easily available online on sites like

About The Author

Tony Rogers is an expert in modern computing and related services who likes to write many interesting articles and blogs, helping people to understand the nuances of the industry. He recommends as the best name to trust for the most reliable cloud computing services.