Interested to Buy Any Domain ? << Click Here >> for more details...
What is Cash Management System? What is advantages of using
CMS Facility?
- 5 Answers
- 45791 Views
- I also Faced
- E-Mail Answers
Answer Posted / neha chawla
Cash Management services is a new entrant in the Indian
Banking Scenario. Cash Management Services (CMS) is a
mechanism to efficiently manage cash flow in order to
reduce risks, minimize costs and maximize profits.
Generally Cash Management comprises integrated collection,
payments, liquidity management, and receivables functions.
Speedy collection of outstation instruments is one of the
major products under CMS.
CMS offers customised collection and payment services,
which allow companies to reduce the realisation time of
cheques and streamline their cash flows. As the companies
get access to their funds faster, the need for companies to
borrow cash comes down, and lowers their interest payout.
In return, the banks charge the companies a fee based on
the volume of the transaction, the location of the cheque
collection centre and speed of delivery. Some banks even
buy the cheques and pay the corporates immediately,
charging an interest fee for the number of days it takes
them to encash the cheques. Since CMS allows companies to
track their cash flows on a daily basis, financial
decisions happen faster and more efficiently.
Need of CMS
Managing liquidity is complex, as cash is volatile. For a
business spread across various locations, managing
outstation fund-collections and disbursements can often be
a time-consuming, expensive and exasperating proposition.
Delays of days or even weeks in realising outstation
cheques, constant tracking and follow-up to transfer funds
from outstation collection accounts, uncertainty and delays
regarding information on the fate of the cheque is common.
These affect the company's liquidity position and it has to
bear a higher interest cost. A remedy to this hazard surely
is the practice of cash management.
Business entities with large network of branches, sales
outlets often have client base with wide geographic
spread. Getting receivables through cheques, drafts and
other clearing instruments into their possession itself
consumes considerable time. Besides, often they find it
difficult to have access to funds at the required time
since banks pass on the credit only on realisation.
Corporate are not certain of the time lag to get the
instruments collected through normal channel of banks and
get the funds credited to their accounts which hinders the
treasury management portfolio and strain their liquidity
and profitability. Cash Management offers guaranteed
credit and timely MIS.
CMS brings predictability of cash flows and helps in
liquidity management." Sectors such as telecom, utility
services, mutual funds and insurance companies benefit most
from it because they can pool their receipts from different
locations in different forms (online, cheques, ECS and
credit cards) in a seamless manner.
| Is This Answer Correct ? | 83 Yes | 14 No |
Post New Answer View All Answers
which kind of expenses or Income will come under direct expenses or Income ?
are there any sub-types of the 4 main types of bank accounts ?.........if yes what are they?
Define the word Profit in terms of business
All shot cut key use in the tally software & it's uses
What is the treatment of Capital Work in Progress as per the International Accounting Standards.
From the following find out a. Profit Volume ratio b. Break even point c. Sales for 40% P/V Ratio d. Margin of safety from the sales Rs 3,00,000 e. Net profit from the sales of Rs 3,00,000 f. Required sales for the new profit of Rs 70,000 g. Required sales for the net profit of Rs 70,,000 after tax, the corporate income tax being 40% h. Additional sales required to convert an increase of Rs 3000 p.a. in the sales manager salary Sale 2,00,000 Variable Overheads 1,50,000 Profit 50000 Fixed overheads 15000 Net profit 35000 Sl No Heads of Account Debit Rs Credit Rs 1 Drawing and Capital 750 15,000 2 Stock as on 01.01.2009 69720 3 Bills Receivable and bills payable 1000 1180 4 Returns 300 320 5 Purchases and Sales 4500 8300 6 Wages 70 7 Discount 30 8 Salaries 200 9 Canara Bank Shares 3000 10 Insurance 120 11 Building 3000 12 Furniture 700 13 Debtors and Creditors 600 1300 14 Cash in Hand 470 15 Overdraft at bank 900
what is forecast
i am called for interview but im getting confused wt sort of questions i wd have to face,its a bank job and post is cash ofiicer please help me.
explain Dual entry concept
what is the difference between planned and non planned budgt
Erection and Instalation charges of Rs 7500 to Lift was debited to repairs and maintenance account. Rectify it
can anyone provide me the Balance Sheet Items & P & L Items with Accounting Heads with Accounting codes?
Pls Give me Solution for me. Bcz i m persuing b.a iii But now i m working in accounts . So what i do In future .
Feature of Master letter of credit of Garments manufacturing company?
Expand-------CSNA
