Cash is considered to be the most liquid of assets and is considered to be most eminent for growth and investment. Therefore, for an organization it is most important to manage the activities which provides cash in effectively manner. The cash flow forecasting and management helps in interminable operations and transactions of the business. It thus enhances the comparability of the cash dealings in an organization and thereby eliminates the effects of accounting treatments for the same transactions and events.
For an organization to grow, the goal is to have an effective working capital management which helps in ensuring the firm's continuity and it enables in maturing both short term debt as well as upcoming operational expenses. The management involves managing the inventories, accounts receivables and payables and also cash.
The major challenge nowadays is to manage the cost of business. Therefore, cost management is required in an organization as it is a process of planning and controlling the budget of a business. It is a form of management accounting which allows a business to predict impending expenditures to help reduce the chances of going over budget. Thus, it is a planning, estimating, budgeting, financing, funding, managing and controlling costs so that the tasks can be completed within the approved tenure and budget. This helps in ensuring competitiveness in long run.
The basic motive of an organization is earning profits. CFO being the financial head plays an eminent role in maximization of profits for an organization. Profit is the most functional area of an organization therefore the opportunities are being looked into for maximization of the same.