Jennifer Adams looks at some options to consider if companies have more cash in their bank accounts than is needed for their day-to-day operations or future needs.
Whilst having a large bank balance represents financial security and flexibility, leaving significant sums of cash sitting idle in the company’s bank account (i.e., more than a contingency or 'rainy day fund', or more than needed for expansion or investment) is not always the best long-term strategy.
For example, low bank interest rates can lead to inflation eroding the value of the cash held. There may also be potential tax implications for the company owners when withdrawing the cash, including the possibility of being taxed at a higher rate.
So what are some options for company owners to
