Develop and articulate a clear understanding of what it is that is driving your banking relationship initiative (e.g., eliminate noise, misdirection, and delays in the information you are receiving):
- To better manage what is known:
- By gaining clearer visibility on your payables, receivabless, debts, investments, and your cash and derivatives positions;
- By getting better more timely information on your balance sheet risks and exposures (due to impacts of market rates, market conditions, and prices) on your cash flow, profitability and assumptions, payables versus receivables, debt versus investments, and cash versus liquidity.
- To more accurately forecast what is unknown:
- By refining your forecasting accuracy to build confidence in your estimations of the impacts of anticipated market rates, market conditons, and market prices (and changing regulations and taxes) on your future cash and investment management strategies, payables and receivables, cash and derivative positions, and balance sheet and income statement.
- Decrease your reliance on liquidity provisioned from outside (e.g., credit lines);
- Increase your ability to provision your liquidity needs internally (e.g., by improving your ability to move cash where it needs to be, by eliminating checks, by building pooling structures to bring more control to cash, and by improving your balance of transactions reporting capabilities);
- Centralize policy and process while distributing functions to local units for better efficiency, process alignment, and functional adherence (e.g., allowing local units to use their own point solutions for things like transfering funds, allowing serious decisions to be made locally through role chartering, etcetera);
- Focus on more concise and timely information flows regarding: (1) Cash: (e.g., bank reporting, cash positioning, cash forecasting, liquidity); (2) Financial positions: (e.g., investments, debt); and (3) Exposures: (e.g. foreign exchange, Interest rates, counterparties, supply chain).
- The objectives of cash management, investments, and components of the cash management and investments function;
- The objectives of cash flow forecasting, controls and support in forecasting, types and frequency of forecasts, and methodology used to forecast;
- Banking relationship management, depository selection, bank compensation (e.g., compensating balances, direct fees, account analysis statement), and bank safety (e.g., role of federal regulators, factors to evaluate);
- The objectives of collections, cash concentration, and methods used to collect and concentrate funds;
- The objectives of disbursements, methods used to disburse funds, and fraud prevention (e.g., positive pay);
- Short-term borrowing, access to credit markets (e.g., credit ratings, interest rates), and borrowing methods (e.g., direct loans, short-term debt instruments, lines of credit);
- Information and control (e.g., bank and cash reconciliations, treasurer’s reports, interest allocations);
- Investment reporting;
- Internal controls;
- Use of technology (including security measures).
