Cash Flow Management
Cash is regarded as the most liquid of assets and it is considered to be the most valuable asset for growth and investment. It is therefore of the utmost importance for an organization to manage activities that provide cash in an effective manner. The forecasting and management of cash flow helps the business in constant operations and transactions. It thus increases the comparability of an organization's cash operations and thus reduces the impact of accounting treatments on the same transactions and events.
Importance of Working capital management
In order for an organization to grow, the objective is to have an effective management of working capital that helps to ensure the continuity of the company and enables maturing of both short-term debt and future operational expenses. Management involves managing inventory levels, accounts receivable and payable, as well as cash.
Following are the activities performed in regards with working capital management:
- Reviewing the functionalities required to organize and manage team goals and tasks
- Checking the receivables and payables cycles
- Setting baselines and processes of escalation
- Identifying the scope of areas to enhance cash flow cycles
- Conferring payment and better collection terms
Importance of Cost Management
Nowadays, the challenge is to manage the cost of business. Cost management is therefore necessary in an organization as it is a process of planning and controlling a company's budget. It is a type of management accounting that enables a business to forecast impending expenditure in order to help reduce the chances of exceeding the budget. It is thus a cost of planning, estimating, budgeting, financing, financing, managing and controlling in order to fulfill the tasks within the approved tenure and budget. This helps to ensure long-term competitiveness.
Profit Maximization Strategies
The basic motive of an organization is to earn profits. The Chief Financial Officer (CFO) being the financial head plays an outstanding role in profits maximization for an organization. Therefore, since profit is an organization's most operational area, the opportunities for maximizing the same are being explored.