Dictionary of Banking Terms: cash management
cash management
- financial management technique used by corporate treasurers to accelerate the collection of receivables, control payments to trade creditors, and efficiently manage cash. Large corporations collect funds from many different accounts into a single concentration account, and invest excess funds in the money market. The local accounts are frequently drawn down to zero-funds every day. In disbursing payments to trade creditors, treasurers attempt to control the outflow of funds by timing payments with the receipt of invoices from trade creditors. A frequently used tool in cash management is controlled disbursement of corporate payments to match the collection of accounts receivables against disbursements to trading partners. See also balance reporting; delayed disbursement; lock box; treasury workstation; zero-balance account.
- personal financial management account at a bank or brokerage firm, combining a money market fund and a brokerage or investment account with check writing and debit card access.
Dictionary of Finance and Investment Terms: cash management
cash management
Corporate finance: efficient mobilization of cash into incomeproducing applications, using computers, telecommunications technology, innovative investment vehicles, and lock box arrangements.
Investing: broker's efficient movement of cash to keep it working. Merrill Lynch pioneered its proprietary Cash Management Account to combine securities trading, checking account services, money market investment services, and a debit (Visa) card. See also aggregation; sweepaccount.