Why is cash management important?

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Why is cash management important?


Why is cash management important?

Explanation & AnswerSolution by a verified expert


Cash management refers to all the activities that are aimed at effective management of inflow and outflow of cash.
Cash management is important:-

Effective cash management reduces the risk of cash theft and losses.
Effective cash management helps in paying the debts on time; thus, increasing the sustainability of the business.
Effective cash management provides a consolidated view of all cash inflows and outflows.

Verified Answer

Cash management is important for maintaining the adequate amount of cash balance that is required for conducting the operations of the business smoothly as well as meeting the immediate and long-term needs of the company.

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