1、Best Practice Financial Processes: Cash ManagementCash Management - Best Practice ObjectivesCash ManagementObjectivesOrganisationPeopleProcessesControlsMeasuresInformation SystemsManage short term liquidity and long term funding requirementsMinimise companys cost of capitalEfficiently manage the pro

2、cessing of cash transactions Effectively forecast cash requirementsManage petty cash efficientlyCentralised cash office & poolingIntegrated with Accounts functionsRecord/manage receipts and paymentsManage cash positionPerform reconciliationsPerform period end closing & reportingPolicies & Procedures

3、Bank liaisonAuthorisation limitsInternal controlsSpeed of reportingAccuracy of forecastingReturn on CapitalIntegrated bank account with sub-ledgersAutomatic bank reconciliationsOn-line/real timeCash forecastingCash management skillsLiaison with financial institutionsProcess FeaturesSegregate cash ma

4、nagement from accounts receivable and accounts payable functionsLocalise cash collectionMinimise level of petty cash requirementsTransmit mechanisms evaluated on cost and risk basisCreate netting arrangement with internal business partnersObtain pan-European banking facilities that allow netting off

5、 of account balancesMap cash collection and payment cycles, identify actions to minimise these periodsMinimum number of banking relationships maintained to ensure coverage and purchasing powerClear unmatched cash within 1 dayRegular reconciliation of all cash books. Maintain petty cash imprest syste

6、msObtain access to on line bank statementsMonitor the cost of cash transmission mechanismsCash balances reported on a daily basis by account and business centresTreasury determine short term cash requirements from cash forecast and daily reportCash surpluses managed by TreasuryPetty cash/foreign cur

7、rency floats periodically auditedCompany loan accounts reconciled monthlyTreasury consolidate and manage cash forecast requirementsMonitor bank facilities to minimise interest payments and maximise receiptsForecast cash on a regular basis: rolling 12 month forecast - annual 5 year ahead reviewsCash

8、Management - Best Practice FeaturesEstablish and maintain cash control mechanismsPerform bank reconciliationsReport andmanage cash balancesForecast cash requirementsSystem FeaturesEDI used for majority of payments and receipts Comprehensive system security and password features for paymentMulti-curr

9、ency systems.Transmission used for bank statementsBank remittance notices issued with sales invoicesElectronic reconciliation of bank statement and cash bookCurrency rates available for sterling equivalentsIndividual bank account cash balance reports produced on a daily basisSummary consolidated cas

10、h reports available on-line to TreasuryIntercompany netting bank accounts reconciled automaticallyIntegrated enquiry from cash book entries to sub-ledgersAutomatic production of cash forecast statements from commitment/accrual accountingProject analysis and control linked to finance systemsAnalysis

11、by market share/product cost etcCash Management - Best Practice FeaturesEstablish and maintain cash control mechanismsPerform bank reconciliationsReport andmanage cash balancesForecast cash requirementsCash Management - Critical Success Factors These are a summary of the key business requirements, w

12、hich must be met to achieve Cash management objectives.Electronic Interfaces with Accounts Payable, Accounts Receivable, Payroll and General LedgerEstablish and maintain good relations with banksAgree Finance terms Reconcile bank accounts on a regular basisEDI for the majority of payments and receip

13、tsAutomated bank reconciliation systems and processesCash monitoring and forecasting techniques provide first class accuracyIntegrated on line systems to audit trail cash transactionsOperate minimum petty cash and foreign currency floatsSeparation of Cash management staff duties from other finance o

14、perationsCash Management - Measures / Cost DriversMeasuresCost of CapitalNumber of bank accountsNumber of banking relationshipsNumber of outstanding reconciling items 3 months oldDifference of interest rate of cash accounts vs. Money Market rates per currencyPercentage of cash transactions effected

15、electronicallyNumber of days in obtaining value for fundsFloating days per bankCost of cash function as a percentage of total finance costNumber of cash transactions per FTENumber of unreconciled cash transactionsNumber of accounts outside cash poolingCash Management - Measures / Cost DriversCost Dr

16、iversElectronic payment and receipt mechanismsNumber of banking locations and bank accountsNumber of international locationsSystem interfaces available for cash entriesTypes of payments and currencies usedNumber of petty cash sitesNumber of transactions per dayExtent of government regulationCash Man

17、agement - Level 0 Context DiagramCash ManagementBudgetingand controlCash officeManagementteamAuditPurchasingAccountsreceivableAccountspayablePayrollBanksGeneralledgerFinancialinstitutionsCash forecastingCashflow monitoring & forecastingCheck reconciliationsTreasury expertiseRemittancesCommitment det

18、ailsPetty CashProcess ReceiptsProcess PaymentsPayroll paymentsCM detailsBankStatementsSales order processingSales ordersCash requirementsCash Management - Level 1 OverviewCustomer accountsCashiersBankCM & BillingsystemRecord receiptsDaily bankingReceive cashcheques bank receiptsReceipt information i

19、ncluded incash book and GLAP controlsAuthorisationPayment TermsMatching rulesAuthorised invoice/expense, DD/SO,Other payments, CashCash Office (CO)AP department & systemBankFDPayroll departmentPerson requesting cashReconciliation proceduresException reportsClear unmatched itemsJournal rulesReconcile

20、d cash booksCash Office (CO)AP reportCustomer accountsManagement AccountantBankPayment information includedin AP (cashbook) and GLReporting proceduresReviewBenchmarkingCash management staffBankTransmission MechanismClose procedureReconciliation proceduresForecasting rules and proceduresReporting formatsForecast & Reporting TimetablesFinancial accountantCash management staffAPCustomer Accoun