Cash Must Flow

Cash is Potential Energy

Invariably with most of my new engagements I identify that clients and organizations are misusing cash.  On a metaphysical level cash represents potential energy and is subject to Newton’s First Law of motion; Cash will remain at rest until acted upon by another force.  In practical terms, cash will simply sit unless it is put to work through investing or use as working capital. Its liquid nature will not allow itself to simply sit unused, however, and it must be managed to produce benefits for the organization or individual.

The Financial Management Error

Too much idle cash sitting in a checking or bank savings account carries a huge opportunity cost for individuals and organizations.  The proper application of cash takes planning and action in order to produce returns on the asset.

The Solution

Any cash regardless of the amount must be invested; it must be used.  As a source of “energy”, it must be applied in order for it to do its job - to facilitate business activities.  As a liquid asset it must be intentionally and deliberately directed to “flow” through the business environment in order to carve results, pick up and deposit rich, fertile soil and deposit it where it is most needed.  The solution is to put cash to work at all times.

Lessons Learned and Take-Aways

The liquid nature of cash, much like water, makes cash want to naturally flow.  When captured behind the dam walls of a low interest or no interest account cash will eventually burst through uncontrollably.  It is in the best interest of an individual or organization to constantly monitor cash, putting it to work and minimizing the risk of it flowing uncontrollably, e.g. losing value over time and missing opportunities to produce growth returns for owners.

For more information on getting started with cash management strategies to produce high yields, please visit my website at www.michaelfuselier.com.

About the Author

Michael has over twenty years’ leadership experience as an experienced senior executive, a certified public accountant and business advisor in a variety of industries serving corporations, private clients and small businesses.  His complete professional portfolio can be viewed and you can connect with him at www.michaelfuselier.com and www.bigcoolworld.com.