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What does cash deficiency mean?

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Question added by Abdullah Aziz Eldain Morsi Elgendy - CMA Candidate , Regional Receivable Accountant , Amiantit Group of Companies
Date Posted: 2017/02/09

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Nikhil Nanda
by Nikhil Nanda , Commercial Finance Manager , Hain Celestial DMCC

Cash deficiency arises when firm/company fails to meets its cash disbursements with its cash receipts in a fiscal year.

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

An arrangement in which a party provides a firm with funds to cover any shortfalls arising from capital or cash flow restraints, allowing the company to service its debt. A deficiency agreement will usually have a cumulative limit specified by the lending party

Abdelrahman Ali Mohamed Abdelrehim
by Abdelrahman Ali Mohamed Abdelrehim , Accounting Manager, 7-2021-present , Petroleum Pipelines Co.

It is the amount with which cash disbursements is greater than cash collection

Sanjay Ojha
by Sanjay Ojha , Accounts Manager , I F S G Facilities Management Services LLC

The poor management skill of the finances. But it could happen as all of a sudden investment or surprising expenses.

It actually means you don't have enough funds for the operating costs.

Tamer Elbeshbishy
by Tamer Elbeshbishy , Financial and Administration Manager , Muscat Towers Holding Group

It means lack of cash due to lack  or defects in management itself. This could due to many reasons like;

1- Purchasing too much fixed assets  without studying

2- Bad collection policy

3- Too much general and operational expense..

 

there are many others in fact, that needs a good financial manager to manage .

 

Thank You for the invitation.

Soliman Abd  ALmalak Gendy
by Soliman Abd ALmalak Gendy , مدير ادارة مراقبة حسابات , الجهاز المركزى للمحاسبات

Deficiency Agreement is an agreement in which a party provides a firm with funds to cover any shortfalls arising from capital or cash flow restraints'allowing the company to serve its debt _It is often used in construction

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