करंट अकाउंट के साथ शार्ट टर्म वित्तीय लक्ष्य 

A key aspect of treasury management is to generate a return on spare cash inflows for a short or very short period. Yes. You can also earn on your Current A

Account by utilizing it smartly so that your ongoing expenses are not affected. You will learn “How to make earnings on your corporate account”?

As you know, Current Accounts are non-interest-bearing accounts. The situation gets tricky if the same amount is parked in FDs and there is an urgent financial need.

Hence, maintaining liquidity and the immediate encash ability of the deployed funds is equally important.

Cash Flow Forecasting

Start by analyzing your cash flow prediction. A business must smartly forecast cash outflow requirements for a month, quarter, and financial year.

This step can be done at the beginning of a financial year. Based on this cash outflow statement, inflows can be deployed. The equation is simple:

Cash Inflows Less Cash Outflows (predicted) less 10% (contingency) = Deployable funds

Asset Liability Mismatch 

Precise and effective working capital management entails meeting impromptu cash outflow requirements. Predicting cash outflows for corporate accounts may be difficult, but it must be noticed and addressed. Finance and treasury departments have the most difficult times when such needs arise. 

Hence, deploying most surplus in liquid-oriented Mutual Funds schemes is vital. Liquidity should be within 24 hours so funds can be readily cashed when needed. 

However, an Overdraft facility can also be used in an emergency if any invested funds get delayed due to circumstances such as bank holidays or strikes.

Avoid Duration and Interest Rate Risk

An intelligent manager must deploy money to minimize interest rate and duration risk. This process is best done by investing in liquid and overnight schemes that hold very short-duration paper. 

You can also avail of a business overdraft/overdraft facility by paying some charges or interest rate as decided by the bank to avoid duration risk if any immediate need arises.

Cash Reserve For Contingencies

Always keep 10 to 15% of cash outflows in hand. Cash reserves in the company’s current account are always advisable. Never invest 100% of free cash flows.

निष्कर्ष

An intelligent way to maximize returns on free cash flows is by deploying surpluses in liquid (debt) mutual fund schemes.

Money can be deployed for as little as one day or overnight. A few safeguards are a must. Corporate accounts can earn between 5-7% annually by utilising free surpluses.

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