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Precision Machines Name: Instructor: Precision Machines Cash management is important for any business’ survival and profitability. It does not simply mean that a business is healthy if it pays its bills and reinvests the rest of the money back into the business. Cash management involves complex processes aimed at ensuring that the company receives cash balance through maximization of cash balances that are not invested in the inventories and fixed assets in a way that prevents the enterprise from becoming insolvent. The reduction of a company’s financing costs and increasing the cash flows are important functions of cash managements. The paper recommends a sweep account for the company to ensure that the company achieves the above functions. The first thing that the company should do is work on the Receivables and Inventories. It should do so to bring cash into the business as fast as possible. Some best practices to ensure this happens involves billing the clients promptly to enable the timely processing of payments to the firm. Additionally, a requirement for the clients to give an upfront deposit for every purchase is also a viable option to increase cash flow. Moreover, the company should consider giving discounts for early payments of the both receivables and inventory so that the customers to motivate the customers to offset their balances in time (Deloitte, 2016). All these attempts aim at increasing the cash coming into the business. After generating as much cash as possible, the company should then hold on to the money as long as possible. Nevertheless, the company should pay their bills and rates in times to prevent incurring lateness fees and to
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