cash

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CASH MANAGEMENT

The 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

Objectives of International Money

Managers

Bringing the company’s cash resources within control

Achieving optimum conservation and utilization of the funds

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

Organization

Operate with smaller amount of cash

Supervision is more centralized

Better service and foreign exchange from banks

Proper allocation of funds

Collection of funds

Need for accelerating collections

How to accelerate collection of receivables

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

Payments netting in

International Cash

Management

Need for payments netting

Procedure involved

Only netted amount is transferred (bilateral netting)

Netting center (multilateral netting)

Payments netting in International

Cash Management (contd.)

Payments netting in International

Cash Management (contd.)

Investment of excess funds

Optimal level of worldwide cash balances

Centralized cash management involves transfer of an affiliate’s cash in excess of minimal operating requirements into a centrally managed account also known as a

cash pool.

Procedure and

Benefits

Cash Planning and Budgeting

Cash Planning and Budgeting

(contd.)

Bank Relations

Importance of good Bank Relations

Common problems in Banking relations

Too many relations

High Banking costs

Inadequate reporting

Excessive clearing delays

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