The first step in managing cash more effectively is:
A)having an adequate cash reserve for emergency expenditures.
B)rapid payment of accounts payable.
C)speeding up payment of accounts receivable.
D)understanding the company's cash flow cycle.

Question

Quizplus · Accepted Answer

Understanding the company's cash flow cycle is crucial in managing cash effectively as it helps identify where cash is coming in and going out. This allows a company to develop strategies to optimize cash flow, such as prioritizing payments or implementing cash collection policies. Having an adequate cash reserve, paying accounts payable promptly, and speeding up accounts receivable are also important steps, but truly understanding the company's cash flow cycle should come first.

The First Step in Managing Cash More Effectively Is