Bauer Business Focus

Benefits of Cash Management

What are the economic impacts?



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Much like running water or electricity, cash management services are an essential part of a company's operation. Assistant Professor of Finance Elizabeth Berger at the Bauer College of Business at the University of Houston asks if a company does not have access, what are the economic impacts?

“By providing safe storage, guarantee of funds, and payment processing, cash management services help grease the wheels of the economy. Without it, firms must find alternatives that add costs to transactions and divert resources from the core business.”

“Evidence from a natural experiment shows that cash management increases a firm's profitability. Firms are able negotiate higher retail prices, lower wholesale prices and increase sales volume.”

“In sum, cash management produce substantial economic value for businesses.”

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