CASH MANAGEMENT The Collection

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CASH MANAGEMENTThe Collection Disbursement of
Public Funds

• Controlling Cash Collection Disbursement
• Dual responsibility
• Receipts maintained in a location separate from
  cash checks
• Certification of vouchers

• Managing Cash Balances
• Safety
• Liquidity
• Maximize pool of funds available for investment
• Concentration Accounts
• Zero-balance accounts
• Highest yield

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Objectives of International Money Managers

• Bringing the companys cash resources within
  control
• Achieving optimum conservation and utilization of
  the funds

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Key areas of International Cash Management

• Organization
• Collection and disbursement of funds
• Netting of interaffiliate payments
• Investment of excess funds
• Optimal level of worldwide cash balances
• Cash planning and budgeting
• Bank relations

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Organization

• Operate with smaller amount of cash
• Supervision is more centralized
• Better service and foreign exchange from banks
• Proper allocation of funds

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Collection of funds

• Need for accelerating collections
• How to accelerate collection of receivables

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Disbursement of funds

• Importance of disbursement of funds
• Review of disbursements
• Payment instruments being used (checks, drafts,
  wire transfers, etc.)
• Bank charges and internal costs
• Techniques being used
• Time involved for processing of instruments

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Payments netting in International Cash Management

• Need for payments netting
• Procedure involved
• Only netted amount is transferred (bilateral
  netting)
• Netting center (multilateral netting)

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Payments netting in International Cash Management
(contd.)
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Payments netting in International Cash Management
(contd.)
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Investment of excess funds
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Optimal level of worldwide cash balances

• Centralized cash management involves transfer
• of an affiliates cash in excess of minimal
• operating requirements into a centrally managed
• account also known as a cash pool.
• Procedure
• and
• Benefits

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Cash Planning and Budgeting
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Cash Planning and Budgeting (contd.)
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Bank Relations

• Importance of good Bank Relations
• Common problems in Banking relations
• Too many relations
• High Banking costs
• Inadequate reporting
• Excessive clearing delays