Introduction to Cash Management Process

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“To techno funk functional capsules. These capsules provide introduction to a business process area and and helps you build process expertise. The topic for this lesson is introduction to cash process. This video is brought to you by wwf on comm.

An institute of one of its kind that enables people processes and technology. The learning objectives of this capsule are learn the meaning of cash and what we mean by cash management process. Understand the inflow and outflow sources of cash. Understand float two types of float known as collection and disbursement float and its importance in cash management process learn about various integrations to cash management and the way transactional data flows in a company and lastly learn about the benefits that an effective cash management system brings to any organization.

What is cash simply put cash is money that you can access businesses get cash by selling their products and services. However businesses also have a variety of additional sources. They can tap into when they need cash called cash equivalence. These are safe short term liquid securities.

That can be converted to cash. Relatively. Quickly. Cash equivalents are short term investments that can be readily converted into a known amount of cash.

A business considers cashy coolants to be the same as cash in the bank. Some examples of cash equivalents are investments that mature in less than three months money market funds certificates of deposit or cds bonds with short maturity dates and commercial paper cash is a company s most important liquid asset and controlling and managing cash is one of the most important areas that a company needs to focus on it is very important that it is properly controlled managed and available for the company to meet its obligations effective cash management ensures. The timely provision of cash resources necessary to support the company s operations controls are built for cash management to optimize enterprise. Wide liquidity and ensure that cash is accounted.

Safeguarded and reported. Correctly. Every. Successful company has a pool of cash that sustains the day to day activities of business.

It grows with receipts from sales and contributions and shrinks with expenditures for inventory marketing. Labor and other expenses. The uncertainty of cash inflows and outflows creates the challenge of ensuring that sufficient funds are available at all times to support the operating cycle borrowing becomes necessary. When cashflow falls short of covering disbursements when incoming funds.

Exceed. The outflow cash is used to repay borrowings or purchase short term investments. Until. The cash is needed to cover.


Future expenses. Financial officers. Need timely information to properly control and use their funds throughout the cash flow cycle. The basic cash management.

Process. Provides that timely information. The cash flow. Timeline.

Includes the total time. Interval beginning. With the first phase of the operating cycle. When resources are purchased until the last step when receipts are collected.

It consists of four basic steps material purchases acquisition of raw materials or merchandise for resale includes negotiation of the method of payment credit terms and trade and payment discounts payment for resources all resources required to support sales including labor marketing and overhead expenses incurred financing costs until cash is collected for sales made sale of inventory or services. Merck merchandise and other sales are most frequently accomplished by extending credit to customers. The timing of accounts. Receivable collection is a major focus in cash management collection of receipts.

Only when the customer has provided good funds for the merchandise or service. Does the cash flow cycle conclude for that transaction float float is the most critical component in cash management. Float is the time interval between the start and completion of each step in the cash management cycle. The management of float is the management of cash each cash management system is designed to improve the flow of cash by accelerating the collection of funds and extending the disbursement float.

There are two categories of float collection float and disbursement float each with several components collection float is the time spent to collect receivables collection float is the sum total of time taken by invoice float mail float processing float and availability float invoicing float is the time period between the delivery of goods or services to the customer and the customers receipt of the bill generally by mail. It is the time it takes a company to record its delivery of service or goods. And then to produce and mail. A bill mail float is the time taken by postal or courier service to deliver the customers payment processing.

Float is the period between the receipt of the payment and its deposit into the company s bank. Account and includes the time it takes to record the payment in the accounting system. Availability float is the time. It takes the deposited check to clear the customers account.

And for good funds to be available to the company for or disbursement disbursement float is the time it takes a company s payment to be created mailed received deposited and presented to the drawee bank for settlement thus collection float and disbursement float refer to the same processes and time intervals depending on point of view. One as a customer and another as a supplier for the company. Receiving a payment collection float represents the time it takes an invoice to be prepared to reach the customer to receive payment and for the payment to clear the bank for the company making the payment that same interval is disbursement float disbursement float. Consists of the following four components invoicing and payment processing float includes both the time it takes the supplier to prepare and send the invoice as well as the time the accounts payable department requires to process the invoice and create the payment mail float is the time taken by postal or courier service to deliver the payment to the vendor processing.


Float is the time it takes the vendor to record the payment and deposit. It into the bank. Availability float is the time it takes the bank to clear the cheque and deduct the funds from the pays bank balance cash management focuses on shortening collection float and extending disbursement float without impacting the positive customer and vendor relationships. The skillful management of float contributes real bottom line impact and benefit to the company management receives payment information from accounts payables and you can then clear and reconcile payments you can also create miscellaneous non invoice transactions.

Such as bank charges. Debits or credits similarly cash management gets receipt information from accounts. Receivables using cash management. You can clear and reconcile receipts and create miscellaneous transactions such as interest debits or credits similarly cash management gets investment and deal information from treasury using cash management.

You can clear and reconcile investments you can get cash transactions from other sources. Like payroll or intercompany system. Transactions are cleared and reconciled against a bank statement. One of the most recurring theme in global transaction banking is the increasing integration of cash management and trade finance products this is possible only if the organization has a well defined centralized treasury management system this brings tangible benefits to both corporates and financial institutions to learn more about how treasury and cash management integration can benefit organizations please see our video on treasury management process effectively using cash management with trade finance products brings tangible benefits to both corporates and financial institutions.

It ensures liquidity and optimal use of cash resources by having enough cash on hand at the right time in order to fund core business operations and improve working capital position visibility into expected cash needs and forecasted cash receipts ability to analyze enterprise wide cash requirements and currency exposures daily cash position and projected cash forecasts to minimize idle cash real time cash positioning for preventing bank balance over drafts and effectively. Managing liquidity bank statement reconciliation protecting unauthorized use maintain accurate cash balances identify and resolve bank errors cash management also helps you to implement explicit segregation of duties helping minimize frauds and misappropriations thank you for watching or downloading our training material. If you need copies of this material for corporate training or commercial use. Please contact info.

At techno phone comm for further details to watch our other. Videos please visit us at youtubecom. or. Intriguing stuff right thankfully.

Some of the more curious minded set about tracking down. This mysterious house and identified. It as building. 145 located on rue lafayette.

And the tenth pear center on dissa meant on first glance. Nothing seems. Amiss its windows match. Those either side of it the doors there and there s even a balcony.

But no building waits behind it much like brooklyn s fake brownstone and the deceptive houses at landstar gardens. This desirable parisian home is nothing. But a ventilation flue created to accommodate the french metro. A satellite view of the building reveals its big secret.


The pretty face is nothing but a front for the gaping hole to the underground below also in the capital is what appears to be a tiny abode stuck on the corner of a street. But what is it really a secret entrance to the metro for the most time savvy commuters. Unfortunately this facade is just a trompe l. oeil yield or optical illusion randomly installed by artist julian berthier.

One saturday morning in 2009 over a decade later the address which takes up just ten cubic centimeters of public space. Still exists. And is regularly maintained by city services. Palm house.

Number 32. 15. Wayne avenue. Located in raleigh.

North. Carolina. Looks like the perfect spot to raise a family positioned on a sizeable plot of land with no nosy neighbors in reality. This house isn t really fit for anyone to live in after all there s no garage.

A driveway. No mailbox or even a path leading up to the heavy front door. Which is permanently locked. There would be no point to trick or treating at this house on halloween inside the spacious interior is actually a government owned pump station which supercharges millions of gallons of water to flow uphill into the rest of the town all you ll find behind those boarded up windows is an array of noisy seventies seafoam green painted machinery.

Which is probably why the house is so isolated of around 20 different pump stations in the city. This is the only one disguised as a residential property. Why is it playing dress up well the government designed it this way in 1978. Mostly out of courtesy to the otherwise attractive neighborhood.

And it s even been constructed using sound dampening materials like cinder block instead of bricks and mortar. How thoughtful billion dollar secret back in 1962. This sleepy town of kocham khan. Nestled in the slopes of the mosel valley in germany became one of the most unsuspecting hiding places in history with the imminent threat of war and hyperinflation suddenly on the horizon.

The german government became increasingly concerned about the safety of the entire national economy. Fearing. The introduction of counterfeit money used to flatten the economy. The immediate solution was to order an emergency mass printing of the deutsche mark west.


Germany s official currency 15 billion german marks were produced in total. But the next big question was where exactly so much emergency cash could be safely stored eventually a foolproof plan was hatched to build a fortified bank vault. Disguised behind a fallout bunker capable of withstanding. A nuclear war and government officials set their eyes on the ancient streets of kocham khan for the job.

More. Specifically these two inconspicuous houses were selected as a prime location and a 15000. Square foot bunker fitted with intricate air electricity and water systems was built 30 metres below the earth. The throw.

Neighbors out the sent. Residents were only told that a small fallout shelter was being built next to her in the event of an atomic attack to ensure they stayed tight lipped. They were also warned that if they told other villagers about it then there wouldn t be room for their families in the underground retreat. It seems like a little blackmail goes a long way because the bunker remained a secret.

His money gradually started arriving through a network of secret tunnels in 1965. Far below. These. Faux houses were massive steel vaults.

Which required three different keys and a secret lock combination to be brought over by officials from frankfurt for two decades employees entered the vault and painstakingly counted the money by hand until. The unused currency was eventually destroyed in 1988. And the bunker was vacated spare. Thought for those poor cash counters.

Nowadays. The buddhist bank bunker has become a museum. After being purchased for five hundred thousand euros in 2014. And you can take a peek inside one of the most deceptive houses in history.

Which of these fake houses would you most like to visit. And do you know of any in your hometown. Let me know in the comments below and thanks for watching. ” .


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