Cash Management: Cash Pooling
Name: Dina Mohanna Rbea’an Subject: Cash Pooling Supervisor: Dr. Nasser Abu Mustafa University: NYIT
Cash Management: Cash pooling
Abstract
The role of the corporate cash manager has been continuously revised over the past few years, as a result of the demand for more effective and efficient ways to support the core needs of the organization. This has resulted in new responsibilities for the corporate treasurer and cash manager. The cash management function is demanding more accurate and continuous information on its cash position to provide responsive forecasting data and handling, so that availability of liquidity at the right time and price can be ensured.
So this paper studies the Cash Management concept and focus on the cash pooling and whether it’s applied in the Middle East.
Introduction
The objectives of cash management are straightforward – maximise liquidity and control cash flows and maximise the value of funds while minimising the cost of funds. The strategies for meeting such objectives include varying degrees of long-term planning requirements. Also, like everywhere in the world, much treasury activity in the organizations is concentrated on cash management. This includes financing the corporation, administration of debts (loans, bonds, commercial papers, etc.), good relationships with the banks, payments to suppliers and collections from customers, control of foreign currency and interest positions according to the company’s needs for finance, and finally the reporting and technical support of all these functions. The use of cash pooling as a global standard for concentrating cash into the main bank account of the firm has very quickly found favour in corporations.
Cash pooling enables corporate groups to minimize expenditure incurred in connection with banking facilities through economies of scale. Under a cash pooling arrangement, entities within a corporate group
Cash Management: Cash pooling
Abstract
The role of the corporate cash manager has been continuously revised over the past few years, as a result of the demand for more effective and efficient ways to support the core needs of the organization. This has resulted in new responsibilities for the corporate treasurer and cash manager. The cash management function is demanding more accurate and continuous information on its cash position to provide responsive forecasting data and handling, so that availability of liquidity at the right time and price can be ensured.
So this paper studies the Cash Management concept and focus on the cash pooling and whether it’s applied in the Middle East.
Introduction
The objectives of cash management are straightforward – maximise liquidity and control cash flows and maximise the value of funds while minimising the cost of funds. The strategies for meeting such objectives include varying degrees of long-term planning requirements. Also, like everywhere in the world, much treasury activity in the organizations is concentrated on cash management. This includes financing the corporation, administration of debts (loans, bonds, commercial papers, etc.), good relationships with the banks, payments to suppliers and collections from customers, control of foreign currency and interest positions according to the company’s needs for finance, and finally the reporting and technical support of all these functions. The use of cash pooling as a global standard for concentrating cash into the main bank account of the firm has very quickly found favour in corporations.
Cash pooling enables corporate groups to minimize expenditure incurred in connection with banking facilities through economies of scale. Under a cash pooling arrangement, entities within a corporate group
References: 1-http://www.gtnews.com/article/6920.cfm Cash Management in the Middle East Rajeev Babel, HSBC Global Payments and Cash Management 2-http://www.gtnews.com/article/4172.cfmCash Management - The Middle East PerspectiveVenkatesan Thiagarajan, Barclays 3- Essentials of treasury management second edition (association for financial professional) . 4- De Gidlow, R., Donovan, S. (2005), Cash Management Techniques. In: The Treasurer’s Handbook 2005, Act, London 5- Heezius, D., Polák, P. (2006), Country Guide: The Czech Republic. In: The Treasurer’s Handbook 2006, Act, London.