These vary in nature and generally relate to either banking issues (of a broad nature) or Board-level/strategic projects of a risk and treasury nature. The range of such projects is wide and reflects Treasury Solution’s in-depth knowledge of the banking and financial markets.
Company C is a local authority which had a large number of bank accounts spread over a number of banks. It ran simultaneous debt and surplus cash positions for various reasons and as a result had a requirement to invest surplus funds on a regular basis. It operated a cash pool in Ireland with one of the banks. Payments were made both electronically and via paper and lodgments were a mixture of cash, cheques and electronic funds transfers.
The objective of the project was to improve the cash management processes, to reduce associated costs where possible and to deal with the issue of investment returns versus counterparty credit risk as it was vital that surplus cash was invested with financially sound banks and financial institutions.
- Reviewed a list of all bank accounts by bank including branch locations of the accounts
- Identified accounts which could be closed and/or kept outside a cash pool
- Established a cashpool arrangement for the second bank
- Established a means of integrating the cashpool data from the two different banks in order to maximize liquidity
- Established a policy for the investment of surplus cash with appropriate financial institutions. This was based around counterparty credit ratings and other variables which in turn were based on our access to the “Ratings Direct” service provided by Standard & Poor, to which we subscribe.
- We also reviewed bank overdraft documentation to ensure that it was appropriate for the institutions involved.
The result was a reduction in the number of bank accounts, better management of the net cash position, lower costs associated with this position, access to a maximum amount of liquidity on a daily basis and investment of surplus cash with only those financial institutions that met strict counterparty credit criteria. We also organised cash and balance reporting on a daily basis in order to address liquidity risk.
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CFO,, Major Private Company
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FC, , Private Irish Company with turnover of €160m
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Group Finance Director,, Large Private Company
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