Time Flies. Plan Ahead.

Managing your company’s cash flows is an important task – trust your bank to offer you the best cash management solutions.

Business is booming in India! The current economic climate is conducive to the growth of the entrepreneurial spirit, and the Government’s policies on taxation are set to drive economic growth. But yet, several companies close down every year. A major reason for this is incorrect cash management.

What are cash management services?

In terms of business, ‘cash management’ is any process of collecting and managing cash, as well as monitoring outflow of revenues. It spells out a process where the company works out a cash management solution such that its revenues far exceed its expenses. Effective cash management ensures that the business remains in good financial stead and is saved from insolvency. The task of cash management is often entrusted to accountants, managers and treasurers to ensure that the company finances remain steady at all times.

Though each company has its own cash management processes, many businesses are unable to monitor revenues on a daily basis. In fact, it is often found that businesses with the wrong approach to cash management may bungle up the books and cause losses. They are better off entrusting the task to professional cash management services teams. Fortunately, premier banking institutions in India offer comprehensive cash management solutions for businesses, spanning a variety of functionalities. This takes the pressure off the company to look into this financial aspect, and the finances are better managed at all levels.

Why entrust cash management to the bank

All companies hold current accounts for their business. If their bank offers cash management services, it can customise a variety of cash management solutions based on the company working and requirement.

So while the company focusses on business development, banks can carry out many financial functions. These include, but are not limited to payment collection and settlement, weekly accounting, quarterly forecasting, etc. The best banks in India offer the following cash management solutions to their clients:

• Daily accounting and reporting
• Studying revenue flows to identify collection and distribution irregularities
• Understanding the company’s working cycle and devising a revenue model for working capital
• Correcting inconsistencies in the receivables cycle and suggesting methods to improve its overall efficiency.
• Forecasting and daily reporting to help the business maintain steady profits and income
• Delegating existing cash reserves

Good cash management helps the business look at its own processes dispassionately and correct any operations that bog down cash flows. It leads to correct asset allocation as well.