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

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

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

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.)

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.)

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