Table of Contents
Preface ix
About the Author xi
Part 1 Cash Management 1
Chapter 1 Treasury Department 3
Role of the Treasury Department 3
Treasury Controls 6
Treasurer Job Description 7
Position of Treasury within the Corporate Structure 7
Treasury Centralization 8
Treasury Compensation 10
Bank Relations 10
Treasury Outsourcing 13
Summary 18
Chapter 2 Cash Transfer Methods 21
Check Payments 22
Wire Transfers 27
ACH Payments 28
Procurement Cards 31
Cash Payments 32
Fees for Cash Transfers 32
Summary of Cash Transfer Methods 32
Cash Transfer Controls 34
Cash Transfer Procedures 43
Summary 48
Chapter 3 Cash Forecasting 49
Cash Forecasting Model 49
Information Sources for the Cash Forecast 53
Measuring Cash Forecast Accuracy 54
Cash Forecasting Automation 55
Bullwhip Effect 57
Business Cycle Forecasting 58
Cash Forecasting Controls 60
Cash Forecasting Policies 62
Cash Forecasting Procedure 62
Summary 62
Chapter 4 Cash Concentration 67
Benefits of Cash Concentration 67
Cash Concentration Strategies 69
Pooling Concepts 70
Physical Sweeping 70
Notional Pooling 73
Comparison of Account Sweeping and Notional Pooling 74
Nonpooling Situations 75
Bank Overlay Structure 75
Cash Concentration Controls 76
Cash Concentration Policies 78
Cash Concentration Procedures 79
Summary 81
Chapter 5 Working Capital Management 83
Working Capital Variability 83
Cash Management 85
Credit Management 85
Receivables Management 87
Inventory Management 88
Working Capital Metrics 95
Summary 102
Part 2 Financing 103
Chapter 6 Debt Management 105
Types of Debt 105
Credit-Rating Agencies 116
Accounting for Debt 118
Debt-Related Controls 130
Debt-Related Policies 134
Debt-Related Procedures 135
Summary 136
Chapter 7 Equity Management 141
Stock Registration 141
Exemptions from Stock Registration 147
Accounting for Stock Sales 150
Equity-Related Controls 152
Equity-Related Policies 154
Equity-Related Procedures 156
Summary 163
Chapter 8 Investment Management 165
Investment Criteria 165
Investment Options 166
Investment Strategies 169
Outsourced Investment Management 172
Risk-Reduction Strategies 173
Accounting for Investments 174
Investment Journal Entries 182
Investment Reporting 188
Investment Management Controls 188
Investment Management Policies 191
Investment Management Procedures 195
Summary 199
Part 3 Risk Management 205
Chapter 9 Foreign Exchange Risk Management 207
Foreign Exchange Quote Terminology 207
The Nature of Foreign Exchange Risk 208
Data Collection for Foreign Exchange Risk Management 209
Foreign Exchange Hedging Strategies 210
Hedge Accounting 223
Foreign Exchange Hedge Controls 232
Foreign Exchange Hedge Policies 234
Record Keeping for Foreign Exchange Hedging Activities 235
Foreign Exchange Hedge Procedures 236
Summary 238
Chapter 10 Interest Risk Management 239
Interest Risk Management Objectives 239
Interest Risk Management Strategies 240
Accounting for Interest Risk Management Activities 253
Interest Risk Management Policies 266
Record Keeping for Interest Rate Risk Management 267
Interest Risk Management Procedures 267
Summary 267
Part 4 Treasury Systems 271
Chapter 11 Clearing and Settlement Systems 273
Characteristics of Clearing and Settlement Systems 273
Overview of the Clearing and Settlement Process 273
Fedwire 275
Automated Clearing House (ACH) System 275
Clearing House Interbank Payments System (CHIPS) 277
Check Clearing 278
The Continuous Link Settlement (CLS) System 280
Summary 281
Chapter 12 Treasury Systems 283
Treasurer's Technology Needs 283
Treasury Management System 285
SWIFT Connectivity 287
Summary 288
Index 289
