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Cash ManagementStrategies

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 The following are the basicstrategies in managing cash:

1. Collect receivables as quicklyas possible without resulting

to high-pressure collectiontechniques.

. Stretch account payable. !aybills as late as possiblewithout a"versely a#ecting

cre"it rating.

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%ccelerating Collection Strategies

  &ne way of re"ucing operating cashrequirements is by spee"ing up oraccelerating collection of receivables.

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Collection Techniques

'irect Sen"s. Checks receive" as part ofcollections are sent "irectly to the bankswhich they are "rawn by customers.

Concentration (anking. (ank accountsare maintaine" for provincial sales

outlets so that they may collect fromcustomers an" "eposits their collectionswith the local banks.

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  )ockbo* System. % lockbo* system isan arrangement of several lockbo*esthat are strategically place" neargeographic clusters of companycustomers+ so that aggregate mailtime from the customers to the

lockbo*es is minimi,e".

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  'irect !ayment to 'epository (anks.Special arrangements are ma"e withbanks to accept payments fromcustomersclients with collections"irectly cre"ite" to the collectingcompany/s bank account.

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  'irect 'eposit to Company/s (ank%ccount. Customers may be allowe"to make "eposits to the main o0cebank account through the bank/sprovincial branches provi"e" thelatter are on line2.

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Stretching !ayables

  3t is the postponing of bills to their"ue "ate4or last "ate of "iscountperio"5 shortens the cash cycles.

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%ccelerating 3nventory Turnover