Cash Management practice is very much needed in this case, as the revenue is very less in comparison to the expense. They are advised to take following steps for the cash management: a) Prepare the Cash Budget b) Regulate the receipts c) Delay payment of Liabilities
Work Step by Step
a) Prepare the cash budget for a quarter and follow the same strictly. b) Receipts of cash, whatever small or big it is, needs constant follow up to expedite. If there is lacking in follow up, the receipts will get delayed and there will be difficulty is releasing payments. c) The expense, small or ig needs to be regulated, and constant efforts should be made to get maximum credit period. This will help us to get more time to arrange funds for payments.