Answer to Question #7353 in Finance for Denise

Question #7353
analyze cash management technology and make at least one recommendation for another technique that would enhance working capital management
Expert's answer
As corporations evolve and increasingly embrace Internet banking, the cash management solutions available to them are also being modified. Solution providers focus on adding new features that will increase fee-based revenues, as well as improving their usability by various businesses including the intuitiveness of their menu-driven options. Such large banks as Citigroup, maintain investments in web-based banking software, with particular focus on security, reliability, enhanced functionality, and ease of use.
In parallel, however, companies that have invested in enterprise financial tools from SAP, Microsoft, Oracle and others are looking to better leverage these investments. These software vendors have integrated certain cash management functionality, such as payment initiation, into their systems.
Nowadays, banks are starting to revise the paper-intensive process for managing a company’s authorized bank account signers. Since this is effectively a legal contract, to change a signer banks require companies to physically submit signed new supporting documentation for each account, a process that has not fundamentally changed in fifty years. This can be cumbersome and time consuming, such as when there is a personnel change in a corporate treasury involving someone who is a signatory on 100 accounts across ten banks. This was one of the barriers to adoption of fully electronic processes. A high assurance digital signature is an identity provided to a company’s employees where a trusted third party such as a bank stands behind the process whereby these identities are issued and holds a level of liability for fraudulent usage.
Bank information reporting traditionally provides a snapshot of current balances. Another important technique should be an integration of additional data points—such as future dated payment information, feeds from receivables systems, time series analysis of historical data – so that banks can help treasurers predict future cash flow and apply analytical tools to determine optimal working capital, cash requirements.

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