Benefits of Cash Management System for your Business

Businesses are evaluated on several parameters and cash will forever be the topmost parameter. A good cash management system is necessary as businesses are required to make periodic payments towards salary, rent or other utilities. Additionally, in the case of business transactions, where there is a time lag between production and sales, cash helps pay for the daily operations to keep the business going. Therefore, proper cash management is essential to ensure smooth operations of the business.

What is Cash Management Services?

These are a set of services critical to business operations. They facilitate day-to-day operations of the business both within and outside the country's borders. The major benefit of these services is the reliability and timeline of payments, which keep the liquidity of your business in check and helps you plan for your business growth optimally.

3-STEP CASH FLOW CYCLE

• Cash as input for purchases

• Sales Debt/Receivables

• Business activities & processes.

Problems with the conventional method:

1. Locked-up funds - Unused cash lying in the stores do not reflect in your Account unless you deposit them in the bank. This affects the actual cash availability for business operations

2. Poor quality vendors/suppliers - Cash supports the performance of all internal stakeholders of any business. Untimely payments to vendors/suppliers and service providers end up damaging the strongest pillars that support your business.

3. Loss of opportunity - Your business might show profit on paper but untimely cash inflows and outflows will always cause a hindrance in starting new ventures

4. Expensive cash borrowings - To compensate the cash crunch due to poor cash management, your business will probably have to take a loan which adds to the current debt, thereby reducing your profitability and return on investment.

How does CMS solve these problems for you?

With an effective CMS in place, tracking your money and settling your financials becomes a lot easier. Here are some benefits outlined:

1. Systematic collection and payments - Payment to vendors and collection from customers can be automated and you will never have to worry about late payments.

2. Saves time and cost without affecting safety norms - CMS helps save time and cost of human resources, which can otherwise be utilised for other more pressing needs of your business.

3. Real-time financial planning with customised MIS (Management Information System) - Having a dedicated MIS helps you keep track of your cash inflow and outflow. Using the data it provides, you can effectively plan your finances in advance and focus on your business growth.

4. Optimum use of financial resources, increased profitability – CMS helps you pay attention in identifying opportunities where you need to use your cash to eventually grow your profit.

For whom is CMS most beneficial?

CMS is most fruitful for the following kinds of businesses and transactions:

1. Multi-channel businesses - Businesses that have multiple branches/franchises benefit a lot from CMS as all cash related data is tracked under one roof

2. Remote pickups and collections - Systematic payment and collection from remote locations helps businesses to deal in cheques and Demand Draft (DD) without having to visit the bank branches regularly, thereby enabling business transactions from anywhere, anytime.

3. Frequent transaction via cheques and/or DD - For those businesses who carry out large number of transactions in a day, CMS helps to mobilise everything including transactions through cheques and DD.

4. Requirement of a customised MIS – Those who use MIS in their business also benefit from CMS as it brings all your information on one platform, aiding in taking more effective decisions to grow your business.

CMS Process

• Pick up is arranged

• Cheques are cleared

• Funds are pooled and deposited

• Reconciliation is completed and MIS is generated.

ICICI Bank’s Cash Management System offers top-notch products and services to help improve your business cash management. We help increase the efficiency of your collections and disbursements by optimising your cash flow position and facilitating the effective management of your business operation.

Benefits of Cash Management Services offered by ICICI Bank:

• Leveraging a vast network of locations within India

• Wide range of CMS products

• Efficient logistics + advanced technology

• Ensuring timely deposit of collections and timely execution of disbursements.

Click here to know more about ICICI Bank Cash Management Service.