If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up?

The company’s cash management system will free up $2 million per day. The amount can be calculated by subtracting all disbursements (3 million dollars) from total collection ($5 millions). This means that of the daily $5 million collection, only $3 millions must be disbursed to meet obligations. The remaining $2 million can then be used for financial activities.

This additional money can then be used in various ways depending on the nature of the organization’s operations and goals. If you invest in stocks or bonds, the interest generated can be used to pay off debts or cover operational costs. Some companies choose short-term investment options such as money-market accounts, which provide high liquidity and minimal risk while also providing modest returns.

This excess income could also cover the costs of future projects. For example, if a firm requires certain equipment that is not yet necessary but eventually will be during peak demand times – they may set aside a portion of their surplus funds so that when those items become needed they already have enough money to purchase them without having to take out loans.

In the end, cash management is essential for both public and private sectors. It allows decision-makers to maximise their profit while still remaining fiscally accountable. By collecting more than what is actually needed on a daily basis and using any extra capital wisely– organizations can ensure greater long-term success.