Cash Budget Function As A Supervision Tool For PT. Sucofindo (Persero) Medan

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Introduction

Every company, including PT. Sucofindo (Persero) in Medan, was established to achieve the set goals, namely achieving maximum profit. In this effort, it is essential for the company to oversee its financial development from time to time. Information about the results obtained in the past and the projection of goals in the future is very crucial, especially in the face of fierce market competition and rapid technological development. One important component in company financial management is cash, which functions as a resource to finance daily operations, new investments, and working capital. Therefore, good cash management is the key to the sustainability and growth of the company.

The Importance of Cash Budget in Company Financial Management

The cash budget functions as a very effective supervision tool in company financial management. In the context of PT. Sucofindo, the cash budget can be used to plan cash investment and disbursement in a certain period. With the cash budget, the company can predict future cash needs, so that it can avoid liquidity problems that may arise due to an imbalance between income and expenses. This budgeting process involves a careful analysis of historical data, income estimation, and expenditure planning.

Role of Cash Budget in Internal Supervision

In addition, the cash budget also plays a role in internal supervision. Management can monitor cash realization in accordance with the established budget. If there is a significant difference between the budget and realization, management can immediately conduct an evaluation to find out the cause. This allows corrective actions to be taken before the problem becomes greater. Thus, the cash budget not only functions as a planning tool, but also as a control mechanism that helps the company remain on the right path in achieving its goals.

Cash Budget and Investment Decisions

Apart from the aspects of supervision and planning, the cash budget also supports investment decisions. By knowing the cash projections that will be available in the future, management can make wiser decisions related to new investments. For example, if the cash budget shows a sufficient cash surplus, PT. Sucofindo can consider expanding or investing in new technology that can improve operational efficiency.

Effective Cash Supervision and Management

In order to increase the effectiveness of cash supervision and management, PT. Sucofindo also needs to ensure good communication between management and all employees. The involvement of all parties in the process of planning and cash budgeting will produce more accurate and relevant data, so that the decisions taken can be more optimal. Thus, the cash budget is not only a static document, but it becomes a dynamic tool that contributes to the company's success.

Conclusion

Overall, the cash budget function as a supervision tool at PT. Sucofindo (Persero) Medan is very important to maintain financial stability and support company growth. Effective and efficient cash management allows companies to adapt quickly to market changes and take advantage of existing opportunities. Through proper monitoring and careful planning, PT. Sucofindo can ensure the survival and achievement of maximum profit in the long run.

Recommendations

Based on the analysis, the following recommendations can be made:

  • PT. Sucofindo should ensure that the cash budget is prepared regularly and accurately.
  • Management should monitor cash realization in accordance with the established budget.
  • The company should involve all employees in the process of planning and cash budgeting.
  • PT. Sucofindo should ensure good communication between management and all employees.

Limitations of the Study

This study has several limitations, including:

  • The study only focuses on the cash budget function as a supervision tool at PT. Sucofindo (Persero) Medan.
  • The study does not consider other factors that may affect cash management, such as market conditions and economic trends.

Future Research Directions

Future research can focus on the following areas:

  • The impact of cash budget on company performance.
  • The role of cash budget in risk management.
  • The effect of cash budget on investment decisions.

References

  • [1] PT. Sucofindo (Persero). (2022). Annual Report.
  • [2] [Author's Name]. (2022). Cash Budget Function as a Supervision Tool for PT. Sucofindo (Persero) Medan. Unpublished Thesis.

Q: What is the main purpose of a cash budget in company financial management?

A: The main purpose of a cash budget is to plan and manage cash inflows and outflows, ensuring that the company has sufficient cash to meet its financial obligations and take advantage of investment opportunities.

Q: How does a cash budget help in internal supervision?

A: A cash budget helps in internal supervision by allowing management to monitor cash realization in accordance with the established budget. If there is a significant difference between the budget and realization, management can immediately conduct an evaluation to find out the cause and take corrective actions.

Q: What is the role of a cash budget in investment decisions?

A: A cash budget plays a crucial role in investment decisions by providing management with information on future cash availability. This enables management to make informed decisions about new investments, expansions, or other business opportunities.

Q: Why is good communication between management and employees important in cash budgeting?

A: Good communication between management and employees is essential in cash budgeting as it ensures that all parties are involved in the planning and budgeting process. This leads to more accurate and relevant data, resulting in better decision-making.

Q: What are the benefits of effective cash management?

A: Effective cash management allows companies to adapt quickly to market changes and take advantage of existing opportunities. It also helps to maintain financial stability and support company growth.

Q: How can a cash budget be used to avoid liquidity problems?

A: A cash budget can be used to predict future cash needs, allowing the company to avoid liquidity problems that may arise due to an imbalance between income and expenses.

Q: What are the limitations of this study?

A: The study only focuses on the cash budget function as a supervision tool at PT. Sucofindo (Persero) Medan and does not consider other factors that may affect cash management, such as market conditions and economic trends.

Q: What are the future research directions?

A: Future research can focus on the impact of cash budget on company performance, the role of cash budget in risk management, and the effect of cash budget on investment decisions.

Q: What are the recommendations for PT. Sucofindo (Persero) Medan?

A: The recommendations for PT. Sucofindo (Persero) Medan include ensuring that the cash budget is prepared regularly and accurately, monitoring cash realization in accordance with the established budget, involving all employees in the planning and budgeting process, and ensuring good communication between management and employees.

Q: What are the key takeaways from this study?

A: The key takeaways from this study are the importance of cash budget in company financial management, its role in internal supervision and investment decisions, and the benefits of effective cash management.