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Cash Management Techniques Analytical Essay

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Updated: Jun 24th, 2019

A business in any industry faces competition from other businesses in same industry and as they sell the same products. Businesses thus have to come up with techniques to enable them become successful in the industry they operate in. Cash management techniques are applied in a business to increase sales and create awareness of a product. Cash rebates, cash discount and coupons are mostly used in a business to promote sales.

Cash rebate is the amount of money paid to a purchaser of a product by the product’s manufacturer after proof of purchase. Cash rebate is done after a customer buys a product which has a rebate. The customer then fills a rebate form and request for the rebate reimbursement before it expires (Treaster, 2000).

Rebates offer consumers part of the money they purchased a product with. This reimbursement of customers purchase is tax free which highly attract customers in purchasing a product. Rebates thus act a way of promoting sales of a product. A customer must ensure the rebate form is filled and sent to the manufacturer before the specified time after which it is invalid.

Coupons and cash discounts are other techniques of cash management which also act as ways of promoting sales of a product. Coupons are like cash rebates but only issued as a document which customers can take to a retailer and use as money in buying certain commodities (Mullin, and Cummins, 2010).

These coupons do not reduce the taxable selling price of those commodities bought with them. Cash discount is a deduction allowed by retailers or sellers to buyers as a technique to encourage them pay within a given time. These cash management techniques enable businesses to make cash sales which ensures good cash flow for the business. This enables a business to have a competitive advantage over others using credit sales as a way of attracting customers.

Cash management techniques are sound business decisions. This is because not only are they advantageous to the business itself but also to customers. They induce customers to purchase products and try them out.

This boosts the sales of retailers and manufacturers which enable them to solve the problem of excess inventory. These techniques help manufacturers to create awareness of their products as well as developing loyalty to consumers. This enables manufacturers to gain competing power within the industry they operate in.

Cash rebates and other cash management techniques are ethical. This is because they create competition which is advantageous to customers as it leads to reduced prices and production of quality goods. Rebates means less spending for customers and more sales for manufacturers. (Bowie, and Schniender, 2011). Cash rebates are still an issue in the business world as most are not claimed.

The issue of filling forms and sending them before deadline discourages many consumers to claim them. About only 10 percent of rebates are claimed and paid up by manufacturers. (Mullin, and Cummins, 2010). This is because companies pay up these rebates in the form that cannot offer whole amount, for example in form of a Visa debit card.

Selling of cars is a good business but which has a variety of cars for customers to choose from. In the car selling business I would recommend use of cash rebates. This is because when customers are looking for a new car, they are in a dilemma of which model to buy. This makes their decision to be easily influenced by cash rebates. Cash rebate in the car selling business is a good competitive method to encourage sales.


Bowie, N., & Schniender, M. (2011). Business Ethics For Dummies. New York, NY: John Wiley & Sons.

Mullin, R., & Cummins, J. (2010). Sales Promotion: How to Create, Implement and Intergrate Campaigns that Really Work. London: Kogan Page Publishers.

Treaster, J. (2000). Rebates May Save Money, Just Maybe Not for You. Retrieved from

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