THE IMPORTANCE OF CASH MANAGEMENT IN CORPORATE FINANCIAL DECISION-MAKING

Abstract

Cash management plays a vital role in corporate finance as it ensures the efficient utilization and control of a company’s financial resources. Effective cash management helps organizations maintain adequate liquidity, meet short-term obligations, and support smooth operational activities. The primary objective of cash management is to optimize cash inflows and outflows while minimizing idle cash balances and financial risks. This study focuses on the role of cash management in corporate finance and examines various techniques used for effective cash flow monitoring and control. It highlights key practices such as cash budgeting, cash forecasting, receivables and payables management, and the use of modern financial tools for tracking cash movements. Proper monitoring of cash flows enables organizations to make informed financial decisions, improve liquidity management, and enhance overall financial stability. The research also emphasizes the importance of internal control systems and strategic planning in maintaining efficient cash flow management. By adopting systematic cash management techniques, companies can reduce financial uncertainties, ensure timely payments, and maximize profitability. The findings of the study suggest that effective cash management practices significantly contribute to improved financial performance and longterm sustainability of corporate organizations