Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013 - (Page 48)

CORPORATE FINANCE CaSh MaNagEMENT — A key element in treasury optimisation The financial and economic crisis has in recent years increased the focus on treasury management and especially cash management. Still today, many companies are confronted with the fact that banks are not always willing to provide the needed funds for financing business. Understanding and controlling current and future cash and liquidity position is now more than ever critical. Effective cash management and reliable cash forecast must prevent inefficiencies from creeping in and ensure that loans that are hard to obtain are kept to a minimum. The era when it was only large international companies that had to contend with these issues is history. — OCT / NOV / DEC 2013 This trend has resulted in a further professionalization of the treasury and cash management function in many organisations, including small and medium-sized businesses. The recent Deloitte CFO Survey (Ref to Deloitte CFO Survey 2012) focusing on treasury and financing management has certainly confirmed this. LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE — N°83 The core activities of a business generate cash flows that must be reconciled with one another. Understanding these cash flows, and the associated risks and costs, is crucial. The organisation of the cash management function and the techniques applied should be such that they support the core activities of a business. 48 Our Survey showed that SME’s maintain, on average, business relations with 6 banks which can be considered quite high. All cash flows within an organisation are managed via the bank accounts. By limiting the number of bank accounts and concentrating on a limited number of banks, it is possible to counter the fragmentation of a company’s bank balances. It is of paramount importance to give full attention to the correct bank and account structure adapted to the needs of the company and, additionally, the correct choice in terms of cash concentration technique(s). It is possible to set up a zero-balancing cash pool (whereby the balances of sub-accounts are set to zero or a certain target balance). Or an overlay structure, or a combination of the different techniques, can be introduced. When making these decisions, the specific properties of the organisation and the existing legal and tax structures must, however, be taken into account. A well-designed structure must be able to provide an efficient and effective overview of the available cash, prevent hidden and idle cash, maximise the return on available funds and/or minimise lending costs. This is why cash flow management that used to focuses on payment techniques and methods nowadays lies with process automation, straight-through processing (STP) and sound bank connectivity.

Table des matières de la publication Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013

Couverture
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David White - TriOptima
FOCUS
FORUM
CORPORATE FINANCE
15 MINUTES WITH Capita Asset Services - Luxembourg
NEWS
THE FINANCIAL RISK OBSERVATORY

Trésorier/Treasurer magazine - N°83 — Oct/Nov/Dec 2013