Optimization of the company's cash flow

(a) Four sources of costs can be identified:
1. The company knows in principle fairly badly of banking conditions: interest rate, real cost of credit application
clauses that accompany a loan (days of values, Bank Charges, various commissions, etc.).
2. The underutilization of banking services: the company ignores generally all services that can offer him his
bank.
3. The poor coordination of banking activities: the company owns several bank accounts, more precisely in AWB
and the BMCI and soon BMCE.
The Treasurer can’t know at any moment and simultaneously the status of each account where the appearance of
frequent setbacks in the management of entries and exits of funds that are the cause of unnecessary financial costs.
Moreover, the costs in some cases, multiply. For example the existence of the overdraft commission can greatly
increase the “Bank Charges”, where the company has several bankers. So let us analyze that the company is located
in the following situation:
Its account at the Bank AWB has accused a tip of 30 million dirhams of discovered in the month; his account at Bank
BMCI, a hint of 3 million; his account Bank BMCE, a peak of 8 million. The overdraft commission therefore amounts
to:
(30 + 3 + 8) x 1/20 % = 205 DH.
While a single banker would have retained the tip of 30 million, which would have increased the overdraft
commission to:
(30) 1/20% = 150 DH.
4. The company, finally, suffers the consequences of financial flows. : The passive attitude of the firm results
from the accounting practice that class products and charges by nature. However, the uncertainty of the
movement of flows does not depend on nature of his case, but downtown decision that generated it and the
means used. For good control randomness, it is necessary to think in terms of "means of regulation" (cash,
check, promissory notes, bills of Exchange, currencies, etc.).
In middle of all these dull, the cash management problem can be solved only by:
Improved knowledge of cash receipts and disbursements in value date;
A decrease of the financial needs by reforms on procedures of receipts and disbursements in order to reduce
the "float";
Suppression of idle cash by blocking funds in paid accounts, or even investment (production capacity) or
financial participation;
A constant search for the financing best suited method to the needs (avoid unnecessary or insufficient
mobilization);
Perfect knowledge of Bank conditions that should always be able to discuss.
(b) In practice, there are two simple but reliable criteria for judging the possibility of compressing the financial costs
in the short term. First, check that financial costs do not exceed 1% of the total turnover. Then ensure that the daily
bank balance of the company in each of its banks does not fluctuate too strongly around zero.
This is not to reduce "at all costs" financial costs to 1% of the turnover, but wonder if the gain is worth the cost.
Indeed, below this threshold, it is likely that economies of Bank Charges compensate rationalization of the cash
management costs. Sometimes the company is in-between 1 and 2% uncertainty. If we took for example the year
2015; the achieved Turnover was around 814 490 004, 7 DH and the Financial Costs were equal to: 9 634 318.4 DH.
As we take these data as a base we’ll have:
(9 634 31, 70 DH / 814 490 004, 70 DH) = 1%
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