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Tag >> cash management
Nov 17

Managing the perils of hoarding excess cash

Posted by dbedell in Financecorporate governancecontrolCFOcash managementCashAFP


A recent piece of research by academics Nils Backhaus and Luc Soenen looking at how to determine if a company is holding excess cash and what the impact is of that, which appears here on AFPOnline, made a very good case for some of the potential pitfalls that companies face when retaining extra cash.

Given the tremendous focus by much of the US business sector on stockpiling cash in recent years, understanding not just the benefits, but also the issues that could arise as a result, is an important exercise that should help finance execs to ensure that cash is put to best use.

Oct 07

Should banks give up the payments game?

Posted by dbedell in SWIFTpaymentsGoogleelectronic bank account managementeBAMcash managementCashbanking industryBanking


In a blog Thursday on FinanSer--the Financial Services Club blogsite—commentator Chris Skinner posed the following question: Since payments are becoming so commoditized that it is foreseeable at some point they may become free, what does this do to the role of a bank as an intermediary in the payments business?

Skinner suggests that banks should and are moving towards becoming repositories of information, as they are further disintermediated from the payments space, and as margins disappear for payments processing.

Aug 03

Cash reporting standards must be improved

Posted by dbedell in treasury management systemERPdata standardsdata standardizationdatacash reportingcash managementcash concernsCashbiztech


It is time to update and standardize cash reporting formats, according to a survey by the Association for Financial Professionals. 

It found that a vast majority of companies want to see the Banking Administration Institute (BAI) cash reporting format—which is used for everything from bank account information reporting to controlled disbursements to lockbox or receivables information reporting--standardized across banks. The format is used for current-day or previous-day information reporting from banks. 

Jul 20

Let your supplier lean on you for payment?

Posted by Ron F in cash managementCash

Ron F

Our editorial partner, the has an interesting item up on how companies can help their suppliers without tying up working capital. The trick involves the customer leveraging its stronger credit rating to finance the payment of suppliers' invoices.

While that is hardly a novel concept, I haven't seen it expressed in terms of its potential impact on working capital before.

Jul 09

Better data, not time reduction, main benefit of automation

Posted by dbedell in risk managementITcash managementbiztechautomationAssociation for Financial Professionals


Companies are still looking to improve automation in financial processes, but their main goals are changing, according to a benchmarking survey conducted by the Association for Financial Professionals (AFP). The AFP survey found that companies are not seeing the reduction in man-hours that was once touted as a key benefit of automation. However, other objectives are being achieved.

Survey respondents said that automating functions often gave little or no reduction in hours spent by employees in managing that process. In fact, many functions took the same number of hours–or full-time equivalents (FTEs)–as manual management. For example, financial risk management, and managing debt and investments all required an equal amount of FTEs whether the process was manual or automated.

Jul 08

Why companies aren't spending

Posted by Ron F in recoveryrecessionObama AdministrationObamajobsjoblessnessemploymenteconomyearningsdemandcash positioncash managementCashcapital expenditurescapex

Ron F

There's a political debate heating up about companies' hesitancy to invest the cash they're sitting on.

Essentially, the Democrats--or at least those in favor of further government stimulus measures such as a jobs program or at least extended unemployment benefits--argue that companies are wary of spending because of the lack of aggregate consumer demand.

Jul 08

Clearing group adds mobile payments rules

Posted by dbedell in SEPANACHAmobile paymentscash managementCashbiztech


The National Automated Clearing House Association (NACHA) has okayed new rules covering mobile payment transactions to be cleared through the ACH network. This could make the mobile payment option more readily available, more secure, and more amenable to US companies—which would be particularly useful for those finance executives that travel extensively and spend time in areas without fixed or wireless Internet access.

NACHA is one of a number of global payments industry governing bodies to develop rules and infrastructure for clearing and settling mobile payments. The European Payments Council is also at work on a set of guidelines to handle m-payments under the Single Euro Payments Area (SEPA)—the EU’s framework for standardizing regional domestic and cross-border transactions.

Jul 01

Companies sitting on still more cash

Posted by Ron F in TaxTARPrecoveryrecessioneconomydemanddefaultconsumer spendingCongresscash managementcash concernsCashCarmen ReinhartCareers/Managementcapital expenditurescapexBanks

Ron F

A survey released today by the Association of Financial Professionals will do nothing to dampen the austerity versus stimulus debate.

To wit: Forty-three percent of US corporations had larger US cash and short-term investment holdings this May than they did six months earlier. Only 24 percent of respondents reported that their short-term holdings had shrunk during the past six months.

Jun 21

Huge gaps in third-party treasury technology

Posted by dbedell in treasury technologycash positioncash managementCashbiztechbank account management


With board of directors exercising increased oversight of treasury operations and cash management in the wake of the financial crisis, companies have been looking for more detailed, and regular, information from their banks. But the crisis has made it more difficult for banks to provide it. Even before banks ran into difficulties, some companies found timely data from their partners hard to come by as a result of outdated bank systems. Acquisitions during the last decade often resulted in disparate systems cobbled together piecemeal. And deals spurred by the crisis have led to more of the same.

Many US banks are now looking to new technology to bring together information from across their organizations to meet clients’ needs. However, most have little budget for the purpose and are counting on outside vendors to provide technology that supports their treasury business. Many are going so far as to have vendors provide their entire platform. That is reflected in the fact that most of the top 60 US cash management banks use on average anywhere from three to eight technology vendors, according to a recent survey by consultancy Aite Group. The largest banks have many more than that.

Jun 18

Multinationals still face challenges in centralizing cash

Posted by dbedell in SEPAPayment Services Directiveliquidity managementeuropecash managementcash concentrationCash


As US multinationals look to make the best use of cash, they continue to work on centralizing cash and liquidity management processes in either global or regional hubs. For those that choose a regional hub approach, it used to be quite an easy decision on where to place that hub for European operations: in one of the tax-advantaged centres of Belgium, Ireland or the Netherlands.

Hundreds of cash management hubs from corporates as diverse as GM, Caterpillar, Procter & Gamble, Exxon and Coca Cola were set up in these countries since their inception to make use of the tax advantaged status. However, in 2003 that status was revoked by the European Commission, and the final deadline for the end of all tax breaks from the hubs is set for December 2010.

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