Accounting Best Practices, Fifth Edition

6–10. Use Internet-Based Cash Flow Analysis Software

Larger corporations will find that the task of consolidating and investing the cash flows from their multitude of subsidiaries is an extremely labor-intensive process, involving the collection of information from every company location about cash requirements and excess amounts, logging in related transactions, and managing the flow of cash from perhaps hundreds of accounts to centralized investment vehicles—and doing so every day. The labor associated with this work may remind one of the years-long work of a group of monks who write a book by hand.

A much easier approach is to use Internet-based software to more rapidly marshal the flow of information. An example of such software is provided by SunGard Treasury Systems (which is located at www.etreasury.com). Under this approach, a user organization signs up with SunGard’s AvantGard-ASP service, which is paid on a subscription basis, and gives it the company’s list of banks and bank accounts. The staff of AvantGard-ASP then takes two to three days to contact each bank and arrange for automated porting of the company’s cash transactions to the AvantGard-ASP site, where they are combined and reconciled. This results in a daily cash position worksheet that the accounting and finance staffs can use to determine the correct borrowing or investing decisions for the day. Because of the great reduction in labor that would otherwise have been required to create the cash position worksheet, ...