Chapter 82. Basic Treasury Management Concepts

JAMES SAGNER

Managing Principal, Sagner/Marks and Associate Professor in the School of Business of Metropolitan College of New York

MICHELE ALLMAN-WARD

Managing Partner, Allman-Ward Associates

Abstract: Treasury management involves various activities that focus on working capital, particularly cash. The cash-flow timeline displays the collections and disbursements of a company, allowing treasury to manage inflow and outflow activities. Collection activities involve Fedwire, ACH, purchasing cards, and checks, managed both through lockbox and conversion to electronic funds transfer. The objective is to optimize mail, processing and availability float Concentration systems are-used to mobilize funds in collection accounts and to fund disbursement accounts. Disbursement techniques include controlled disbursing as supported by positive pay and reconciliation, and comprehensive payables.

Keywords: treasury management, float, availability, earnings credit rate allowances, sweeps, account analysis, Fedwire, Automated Clearinghouse (ACH), checks, lockboxes, controlled disbursement, positive pay, reconciliation, comprehensive payables

Treasury management is the art—and increasingly the science—of managing a company's short-term resources to sustain its ongoing activities, mobilize funds, and optimize liquidity. The most important elements are:

  • The efficient utilization of current assets and current liabilities of a firm throughout each phase of the ...

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