Cash & Treasury Management Flashcards
CHAPTER 19
6 Role of Treasurer
- Corporate Financial Objective
- Liquidity management
- Funding management
- Currency management
- Corporate finance
- Related subject
Corporate Financial Objective
- Financial aim & strategy
- Treasury policies & system
Liquidity management
- Working capital
- Money transmission management
- Banking relationships
- Money management
–> making sure has enough liquid funds & invest surplus
Funding management
- Funding policies & procedures
- Sources of fund
- Types of fund
–> need to know where can find, how long, interest rate, require security/not, interest variable/fixed
Currency management
- Exposure policies & procedures
- Exchange dealing (futures & options)
- International monetary economics & exchange regulation
Corporate finance
- Raise share capital
- Capital form
- Obtain stock exchange listing, dividend policy
- Financial info for management
- Mergers & acquisition
- Business sales
Related subjects
- Corporate taxation (domestic & foreign)
- Risk management & insurance
- Pension fund investment management
6 Objectives of cash receipts & payments procedure
- Monies received recorded
- Monies received banked
- Funds safeguarded
- Payment authorised
- Payments not made twice
- Transactions only processed when due to be paid/received
Explain segregation of duties
Person receiving & recording cash should NOT be the same as person banking
Legal requirement of accounting records [ Cash Procedures ]
Cash movements must be recorded promptly & accurately
3 Cash Procedures
○ Physical receipt & payment of cash
○ Electronic receipt & transfer of cash
○ Reconciliations of records of cash received & paid
Cash procedure : Physical receipt & payment of cash
Recording & banking
- Handled by authorised staff
- Counted & recorded promptly
- Reconcile cash counted with supporting info
- Daily banking (if can)
- Secure storage
Petty cash
- Policies on float & expenditure limit
- Recording item bought, cash replenishment, reconcile balance
- Secure storage
- Limited access
- Independent checks on float
- Surprise cash counts
Other control
- Restrictions opening new bank a/c
- Identification of new customer
- Restrictions raising cheque
- Restrictions on payments out of cash received not banked
- Restrictions physical access to cash
- Insurance arrangements for cash balances (FGI)
Fidelity Guarantees Insurance
Protect your firm/organisation against theft of the firm’s own money, securities or property (goods held in trust) by an employee, partner, contractor or volunteer. FGI aka first-party fraud, theft or employee dishonesty cover.
Cash procedure : Electronic receipt & transfer of cash
- Access to setting up payments must have authorisation & confirmation of payee’s bank details
- Amount above threshold need additional authorisation
- Independent review (BACS & CHAPS)
- Regular review to check genuine commitments & reconcile to actual amounts due (Direct debit & Standing order)
- Authorisation of customer refunds before processing
Cash procedure : Reconciliation of records of cash received & paid
Physical :
- Reconciliation of paying-in information with cash counted
- Bank reconciliations
- Petty cash records & general ledger reconciliation
Electronic :
- Reconcile all receipts & payments to supporting docs
- Confirm amounts paid/received with bank details
- Automated receipts & payments need independent review & authorisation (only run as long as intended)
