Various Cash Management Techniques

Various Cash Management Techniques

  • Submitted By: dblythe
  • Date Submitted: 11/09/2009 3:23 PM
  • Category: Business
  • Words: 797
  • Page: 4
  • Views: 1297

Cash Management Paper

Cash Management Paper
Donald Blythe
University of Phoenix

This purpose of this paper is to review the various cash management techniques. These techniques will be compared and differentiated for learning purposes. The topic of various methods of short-term financing will be discussed after the analysis of cash management techniques. The short-term financing methods will be compared and contrasted for learning purposes. The paper will address these two topics and give alternatives and possible uses of these topics.
Cash Management Techniques
There are various cash management techniques available for utilization. They range from domestic as well as international options. In order to utilize these techniques, companies need to improve their collections and disbursement processes. We may expedite the collection and check-clearing process through a number of strategies. One popular method is to utilize a variety of collection centers throughout our marketing area. An insurance company such as Allstate, with headquarters in Chicago, may have 75 collection offices disbursed throughout the country, each performing a billing and collection-deposit function. One of the collection offices in San Francisco, using a local bank, may be able to clear a check on a San Jose bank in one day—whereas a Chicago bank would require a substantially longer time to remit and clear the check at the California bank. Another technique is using the lockbox system which may replace the network of regional collection offices. In this system the customer forwards their checks to a post office box in their geographic region and a local bank picks up the checks. The bank can then process the checks through the local clearinghouse for rapid collection and perhaps have the funds available for use in 24 hours or less. Whether the corporation uses either of the two systems, excess cash balances are remitted to the corporate headquarter bank...

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