Question

Provide 5 things strong cash applications allows management to do.

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Answer 1

5 things strong cash applications allows management to do are-

1) Timely payment to employees

Employees are the backbone, who help you keep your business running and good staff are hard to find. Therefore, paying your staff on time is not only the right thing to do, it also makes good business sense.

With good cash flow management, you’ll never have to worry about whether you can pay your staff on time as you will be able to regularly set aside cash for their renumeration.

2) Won't run out of cash

The biggest advantage of good cash flow management is that you will never run out of cash. Managing your cash flow well, will let you predict how much money you’ll be bringing into your business and ensure that it's always more than you'll need to spend.

3) Avoids Overspending

If you don’t have a good cash flow management plan in place, you will find yourself guessing how much money you need to spend for each payable. This usually results in overspending

Managing your cash flow effectively, will give you greater control over your cash. Your spending will be contained and you can guarantee you will have enough cash reserves to use in case of unexpected expenses.

4) Growth of Business

An effective cash flow management plan will prevent you from running out of money so you can always have cash for upcoming growth opportunities.

Effectively managing your cash flow is the key to your business’s success. By implementing a smart cash flow management strategy you will be able to address any shortfalls immediately.

5) Peace of mind

Running out of money is too stressfull. Fortunately, with good cash flow management, you'll worry less about making ends meet because you'll have enough money in the bank to meet all your obligations.

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