A Study On Cash Management in Sree Lakshmi Organic Cotton Industry at Karur Chapter-I

A STUDY ON CASH MANAGEMENT IN SREE LAKSHMI ORGANIC
COTTON INDUSTRY AT KARUR
CHAPTER-I
INTRODUCTION
In a business anything done financially affects cash eventually.

Cash is to a business is what blood is to a living body. A business
cannot operate without its life- blood cash, and without cash
management, there may remain no cash to operate. Cash movement in a
business is two-way traffic. It keeps on moving in and out of business.
The inflow and outflow of cash never coincides. Important aspect which
is unique to cash management is time dimension associated with the
movement of cash. Due to non-synchronicity of cash inflow and outflow, the
inflow may be more than the outflow or the outflow may be more than
the inflow at a particular point of time. This needs regulation. Left
to itself cash flow is apt to follow monsoon pattern, and showers
of cash may be heavy, scanty or just normal. Hence there is a dire
need to control its movement through skilful cash management. The
primary aim of cash management into ensure that there should be enough
cash availability when the needs arises, not too much, but never too little
INTRODUCTION
Cash management is a marketing term for certain services offered primarily

to larger business customers. It may be used to describe all
industry accounts (such as checking accounts) provided to businesses of a
certain size, but it is more often used to describe specific services such as
Cash concentration
Zero balance accounting
Automated clearing house facilities.
Sometimes, private industry customers are given cash management
services.
CASH MANAGEMENT SERVICES GENERALLY OFFERED
The following is a list of services generally offered by industrys and

utilised by larger businesses and corporations:
Cash movement in a business is two-way traffic. It keeps on moving in and

out of business. The inflow and outflow of cash never coincides. Important
aspect which is unique to cash management is time dimension associated with
the movement of cash. Due to non-synchronicity of cash inflow and outflow,
the inflow may be more than the outflow or the outflow may be more than the
inflow at a particular point of time. This needs regulation. Left to itself cash
flow is apt to follow monsoon pattern, and showers of cash may be heavy,
scanty or just normal. Hence there is a dire need to control its movement
through skilful cash management. The primary aim of cash management is to
ensure that there should be enough cash availability when the needs arise, not
too much, but never too little.
Cash Management is a marketing term for certain services offered primarily to

larger business customers. It may be used to describe all industry accounts (such
as checking accounts) provided to businesses of a certain size, but it is more
often used to describe specific services such as cash concentration , zero
balance accounting , and automated clearing house facilities. Sometimes,
private industry customers are given cash management services.
PURPOSE OF CASH MANAGEMENT
Cash management is the stewardship or proper use of an entity's cash

resources. It serves as the means to keep an organization functioning by making
the best use of cash or liquid resources of the organization.
The function of cash management at the U.S. Treasury is threefold:
1. To eliminate idle cash balances. Every dollar held as cash rather than used to
augment revenues or decrease expenditures represents a lost opportunity. Funds
that are not needed to cover expected transactions can be used to buy back
outstanding debt (and cease a flow of funds out of the Treasury for interest
payments) or can be invested to generate a flow of funds into the Treasury's
account. Minimizing idle cash balances requires accurate information about
expected receipts and likely disbursements.
2. To deposit collections timely. Having funds in-hand is better than having

accounts receivable. The cash is easier to convert immediately into value or
goods. A receivable, an item to be converted in the future, often is subject to a
transaction delay or a depreciation of value. Once funds are due to the
Government, they should be converted to cash-in-hand immediately and
deposited in the Treasury's account as soon as possible.
3. To properly time disbursements. Some payments must be made on a specified
or legal date, such as Social Security payments. For such payments, there is no
cash management decision. For other payments, such as vendor payments,
discretion in timing is possible. Government vendors face the same cash
management needs as the Government. They want to accelerate collections. One
way vendors can do this is to offer discount terms for timely payment for goods
sold.
COUNT RECONCILEMENT SERVICES:
Balancing a check book can be a difficult process for a very large

business, since it issues so many checks it can take a lot of human
monitoring to understand which checks have not cleared and therefore
what the company's true balance is.
To address this, industry have developed a system which allows
companies to upload a list of all the checks that they issue on a daily
basis, so that at the end of the month the industry statement will show not
only which checks have cleared, but also which have not.
More recently, industry have used this system to prevent checks from
being fraudulently cashed if they are not on the list, a process known as
positive pay.
ADVANCED WEB SERVICES:
Most industry have an Internet-based system which is more advanced

than the one available to consumers.
This enables managers to create and authorize special internal logon
credentials, allowing employees to send wires and access other cash
management features normally not found on the consumer web site.
ARMOURED CAR SERVICES
Large retailers who collect a great deal of cash may have the industry
pick this cash up via an armoured car company, instead of asking its employees
to deposit the cash.
AUTOMATED CLEARING HOUSE:
Services are usually offered by the cash management division of a

industry. The Automated Clearing House is an electronic system used to
transfer funds between industries.
Companies use this to pay others, especially employees (this is how direct
deposit works). Certain companies also use it to collect funds from
customers (this is generally how automatic payment plans work).
This system is criticized by some consumer advocacy groups; because
under this system industry assume that the company initiating the debit is
correct until proven otherwise.
BALANCE REPORTING SERVICES:
Corporate clients who actively manage their cash balances usually

subscribe to secure web-based reporting of their account and transaction
information at their lead industry.
These sophisticated compilations of industrying activity may include
balances in foreign currencies, as well as those at other industry. They
include information on cash positions as well as 'float' (e.g., checks in the
process of collection).
Finally, they offer transaction-specific details on all forms of payment
activity, including deposits, checks, and wire transfers in and out, ACH
(automated clearinghouse debits and credits), investments, etc.
STATEMENT OF THE PROBLEM
Cash management is something all the companies need to consider. There

is extra money to earn by managing the liquidity the right way. I have
seen an opportunity to work with this subject and present it for Cherry
tech industry
The reason is because the company does not have any employee that is
managing the liquidity at the moment. There is a big opportunity to see if
the companys liquidity will be more efficient through cash management
thinking.
Since Cherry tech industry are not focusing on cash management, I
believe there are some areas that can be improved through cash
management thinking. Another reason why cash management is
important is because we want to get rid of unnecessary restricted capital.
Cherry tech industry works with building properties and that implies that
there is a large sum of money managed and by being efficient, there is a
great deal of money to earn by investing them properly.
OBJECTIVE OF THE STUDY
Objectives of a project tell us why project has been taken under

study. It helps us to know more about the topic that is being
undertaken and helps us to explore future prospects of that
organisation. Basically it tells what all have been studied while making the
project.
To learn about various aspects of sree lakshmi organic cotton industry

at karur cash management.
To analyse the history of sree lakshmi organic cotton industry at
karur.
To gain insights about functioning of sree lakshmi organic cotton
industry at karur cash management.
To explore the future prospects of standard cash management.
To understand how cash is being managed by sree lakshmi organic
cotton industry at karur
To gain knowledge about the system prevailing in sree lakshmi organic
cotton industry at karur
To suggest methods for improving cash management in sree lakshmi
organic cotton industry at karur
RESEARCH DESIGN:
For this research descriptive research design is used.
POPULATION: All the employees who are directly or indirectly related

to the SREE LAKSHMI ORGANIC COTTON INDUSTRY AT
KARUR.
SAMPLE UNIT:
All the employees who are directly or indirectly related to the SREE
LAKSHMI ORGANIC COTTON INDUSTRY AT KARUR.
SOURCE OF DATA:
Primary Data: -
Structured direct Interviews with the concerned persons of Finance & Stores
Department
Secondary Data: -
Annual Report, Store Records & various books.

LIMITATIONS OF THE STUDY:
1- Some of the respondents refused to fill questionnaire during the research

work.
2- Some of the lower level store department employees were not well
educated.

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A STUDY ON CASH MANAGEMENT IN SREE LAKSHMI ORGANIC

COTTON INDUSTRY AT KARUR

In a business anything done financially affects cash eventually.

Cash management is a marketing term for certain services offered primarily

CASH MANAGEMENT SERVICES GENERALLY OFFERED

The following is a list of services generally offered by industrys and

Cash movement in a business is two-way traffic. It keeps on moving in and

Cash Management is a marketing term for certain services offered primarily to

PURPOSE OF CASH MANAGEMENT

Cash management is the stewardship or proper use of an entity's cash

The function of cash management at the U.S. Treasury is threefold:

2. To deposit collections timely. Having funds in-hand is better than having

COUNT RECONCILEMENT SERVICES:

Balancing a check book can be a difficult process for a very large

ADVANCED WEB SERVICES:

Most industry have an Internet-based system which is more advanced

AUTOMATED CLEARING HOUSE:

Services are usually offered by the cash management division of a

BALANCE REPORTING SERVICES:

Corporate clients who actively manage their cash balances usually

STATEMENT OF THE PROBLEM

Cash management is something all the companies need to consider. There

Objectives of a project tell us why project has been taken under

To learn about various aspects of sree lakshmi organic cotton industry

For this research descriptive research design is used.

POPULATION: All the employees who are directly or indirectly related

Annual Report, Store Records & various books.

1- Some of the respondents refused to fill questionnaire during the research

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