Companies generally hold online fast cash for the purpose of meeting the transactions of the business. For instance, cash payments are to be made for the purchase of goods, for wages and for various operating and financial charges. To ensure that the firm is able to meet its obligations when payments become due in a situation in which the disbursements are in excess of the current receipts, it must have adequate cash balance.

The cash balances held in reserve for meeting random and unforeseen fluctuations in cash flows are known as precautionary balances. The unforeseen circumstances may be on account of floods, strikes, cancellation of orders etc. Then there is a speculative balance, which refers to the desire of the firm to take advantage of the opportunities speculative in nature. Such motive may be to take advantage of the opportunity to purchase raw materials at a reduced price on payment of immediate cash. There is also motive of holding cash for the purpose of meeting the obligations arising out of bank transactions such as the maintenance of minimum balance in the bank account.

There are some of the techniques used by firms for effective management of online fast cash. Through prompt payment by customers cash can be managed. This requires the notification in advance of the amount and the period of payment by customers. A decentralized collection procedure also called concentration banking is a system of collecting online fast cash through a number of collection centers operated throughout the geographical area in which the firm operates. Under decentralized collections, the firm will have a large number of bank accounts operated in the areas where the firm has its branches. Then there exist lock box system through which the firm establishes a number of collection centers considering customer locations and volume of remittances. This system helps the firm in eliminating the time gap between the customer checks and their deposit in the bank.

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