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Cash Management Techniques
The basic strategies that must be employed via the business firm in managing its cash are as:
i) To pay account payables as behind as possible with no damaging the firm's credit rating. However the firm should obtain advantage of any favorable cash discounts offered.
ii) Turnover inventory as rapidly as possible, but avoid stock outs that might result in loss of sales or shutting down such 'production line'.
iii) Collect accounts obtainable as quickly as possible with no losing future sales since of high pressure collection systems. The firm may employ cash discounts to accomplish this objective.
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