The proverb “A penny saved is a penny earned” offers a good idea and advice to save money. When a penny is saved, it can be regarded as a penny has been earned leading a person to have worth of one penny. It also implies that money can be saved even if it is done little by little. The notion that money must be spent wisely is also revealed in this proverbial meaning. Further, it gives a precious advice that can lead a business management to strengthen the strategies for cash management.
Effective cash management is one of the most importantaspects of any business leading it to make profitable or unprofitable. It is due to effective cash management that the progress, performance and profitability can be ascertained, while inefficient cash management creates various problems in a business organization. Having been related to working capital management, the activity of maintaining and providing funds as and when needed is regarded as an essential task, as it leads to meet the day-to-day expenses of a business as well as paying the dues or clearing the obligations. It also helps to manage the events efficiently in which unexpected expenses are to be incurred. For all the above reasons, the concept behind the proverb is very much helpful to business management, as it leads to control unnecessary expenses while it enables to save the money which is not spent. In this way, a business can not only avoid unimportant expenditures, but it also saves money, which can also be used for unforeseen events.
As regards receivables, a business entity needs to collect its receivables from its customers or clients on time. If it fails to make collections on timely basis, the situation may bring various problems, such as, lack of financial resources. If it is done properly, the company will be in the money. This way, money is earned on regular basis. Even if it’s a little, when collected on time, it can be accumulated leading a business to remain solvent and pay its debts.
The proverb, “A penny saved is a penny earned” helps you find out ways in which you can monitor and control you expenses so that you can spend money efficiently and save it wisely. Following this precious advice, you can save money and earn money successfully at the same time.
K.A.Fareed (Fareed Siddiqui)
Writer, Trainer, Author, Vba/Vb Developer
BBA; MBA-Finance; M.Phil-Financial Management; (PhD-Management)
Individual Member of Institute of Management Consultants of India
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