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  • December 1998
  • Background Note
  • HBS Case Collection

Cash Management Practices in Small Companies

By: H. Kent Bowen, Andrew R. Jassy, Laurence E. Katz, Kevin E. Kelly and Baltej Kochar
  • Format:Print
  • | Pages:8
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Abstract

Most small business managers claim that cash management is their leading concern. Often walking a tightrope between growth and illiquidity, small business managers face different cash management challenges than their counterparts in larger companies. Compared to larger firms, small businesses often have under-staffed and under-trained accounting staffs, volatile cash flows dependent on a single product line, limited access to new capital, and a significant share of their net worth tied up in working capital. These limitations are often compounded by management's focus on growth, which can put additional pressure on the cash management system by increasing net working capital requirements.

Keywords

Motivation and Incentives; Working Capital; Management Practices and Processes; Organizational Design; Cash; Forecasting and Prediction; Policy; Business Strategy

Citation

Bowen, H. Kent, Andrew R. Jassy, Laurence E. Katz, Kevin E. Kelly, and Baltej Kochar. "Cash Management Practices in Small Companies." Harvard Business School Background Note 699-047, December 1998.
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About The Author

H. Kent Bowen

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More from the Authors
  • New Balance Athletic Shoe, Inc. (Abridged) By: H. Kent Bowen, Robert S. Huckman, Carin-Isabel Knoop and Matthew Preble
  • Peter Schultz at The Scripps Research Institute By: H. Kent Bowen, Alison Berkley Wagonfeld and Courtney Purrington
  • Gordon Williams: Clinical Research at Brigham and Women's Hospital By: H. Kent Bowen and Courtney Purrington
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