Treasury Management The Practitioner's Guide

by Bragg, Steven M.

• ISBN13: 9780470497081
• ISBN10: 0470497084
• Edition: 1st
• Format: Hardcover
• Copyright: 2010-03-02
• Publisher: Wiley

Summary

Unlike other books on treasury management, this book is written by a corporate financial professional to his peers. This book provides forms, controls, policies and procedures that show exactly how to manage the treasury function. The tentative contents is: (1) Risk Management (Foreign exchange; Interest rate; Debt; Derivatives); (2) Financing (Bank financing; Bond financing, valuation, and credit ratings; Asset securitization); (3)Cash Management (Cash forecasting; Domestic payments; International payments; Cash management concepts: pooling, cash concentration, and intercompany netting); (4) Special Products (Spot foreign exchange; Forward foreign exchange; Foreign exchange swaps; Foreign currency options; Interest rate swaps; Interest rate options); and (5) Treasury systems and Regulatory issues.

Author Biography

STEVEN M. BRAGG, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young and an auditor at Deloitte & Touche. He received a master's degree in finance from Bentley College, an MBA from Babson College, and a bachelor's degree in economics from the University of Maine. He has been the two-time president of the Colorado Mountain Club, is an avid alpine skier and mountain biker, and is a certified master diver. Mr. Bragg resides in Centennial, Colorado. He is also the author of Accounting Best Practices and Accounting Policies and Procedures Manual (both published by Wiley).

Table of Contents

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