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What Is Cash on Hand?

Maggie Worth
Maggie Worth

"Cash on hand" is a term used to describe the current liquid assets of a company or individual. This includes actual cash as well as accessible balances in checking, savings, money market, and other such accounts. In some cases, available credit funds may also be included. These assets differ from total assets, which additionally include things such as equity in real estate and equipment, and can include invoiced monies as well. The amount of cash immediately available to a person or business can play a major role in both purchase and credit decisions.

The main point of difference between cash on hand and other types of assets is the immediacy of access. The funds generally do not need to be physically present on the premises to be considered "on hand." As long as the business or individual has access within a fairly immediate time frame, the funds are considered part of this category.


Further, funds considered "cash" do not have to be physical money. Electronic funds, such as those present in bank accounts, also count. In addition, the funds in credit accounts such as credit cards or home equity lines of credit may sometimes be included, provided they can be accessed quickly.

Any asset considered a part of cash on hand must be liquid. This means that it does not require the sale or transfer of a physical or intangible item in order to access its full or partial worth. For this reason, equity in a home, physical items of value, and stocks or shares are not considered to be either "cash" or "on hand."

Creditors sometimes require proof of liquid assets before extending a loan or before setting fees and interest rates. In some cases, a certain amount of such funds is required in order to access credit funds. For example, an individual or business seeking to purchase an automobile or a piece of real estate must often produce a cash down payment. In these cases, available credit is not considered cash because the offer is conditional upon the current credit balance.

Businesses and individuals may also need to monitor cash on hand in order to manage cash flow. This means ensuring that there is enough available cash or credit to cover expenses at all times. It might also mean maintaining an adequate contingency fund so that unexpected, urgent expenses can be paid without interrupting business or personal operations.

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Discussion Comments


I have under 20 days cash on hand, what does that mean?


Our company uses cash on hand to talk about the money we keep in the office to pay for things like COD deliveries and lunches for the staff. I always make sure our budget includes enough to pay for little things. It can also be used if we run out of something like paperclips and someone needs to run to the store.

Pretty much as long as we keep our receipts and track where the money has gone it is a bit of a honor system. All the staff can access the fund and so far we haven't had any trouble with the system. I suppose most people like their jobs more than a quick $200.


@letshearit - My family always keeps cash on hand because there are still some places out there that don't take debit or credit cards without charging you a fee. I can think of at least a half dozen places we order food from that ding you for using a credit card.

I also think keeping cash on a hand is a good way to budget. It is so much easier to spend with a debit card or credit card because you can go a month without seeing the balance. With cash you are watching the money disappear from your hands which I think makes a much bigger impact. I doubt I would buy so many cell phone apps if I actually had to count out my change.


I have also heard the term cash on hand used when talking about personal finances as well. My friends are always saying how much cash on hand they have when we go out for a night of fun. I suppose that while the term is more common in business that it has become a pretty popular idiom as well.

For myself I usually try to carry some cash on hand because the fees for using my debit card really add up over a month. I prefer just to take a wad of cash out at the being of the month and stick it in my home safe. I feel a lot better knowing I am not wasting money on bank fees when it isn't strictly necessary.

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