Analysis of the Impact of Cash Management on Liquidity in SMEs in Indonesia

Small and Medium Enterprises (SMEs) play a crucial role in Indonesia's economic growth, yet they often struggle with liquidity constraints due to ineffective cash management. This study employs a literature review method to examine the impact of cash management on liquidity among Indonesian SMEs. The findings reveal that structured financial planning, digital financial adoption, and improved access to funding are essential in mitigating liquidity risks. Additionally, the study identifies a strong correlation between effective cash management and business performance, emphasizing the need for SMEs to adopt sound financial practices. The research highlights gaps in existing literature and suggests further empirical studies to develop practical frameworks tailored to the financial landscape of Indonesian SMEs. The study contributes to the discourse on SME financial resilience and offers policy recommendations to enhance liquidity management.