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Money is an account balance. Banks do not maintain cash on hand equal to the amount of money deposited. Rather, they keep about 10% of deposited funds in cash. The amount required varies from day to day and week to week. Cash management is keeping enough cash on hand to handle the bank's cash business plus the cash reserve dictated by the bank's policy. Cash on hand plus cash deposited minus cash paid out equals net cash on hand. To ensure that the net cash on hand meets the bank's needs, the cash manager must estimate with fair accuracy the amount of cash to be deposited as well as the future cash demand. Cash is ordered from the federal reserve and excess cash is returned there.

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