Optimization of the company's cash flow

implementing rules are poorly known for the company. The Treasurer who ignores or neglects the conditions of Bank
can neither predict nor control the cost of its management and solvency of the case. There is no mandatory clause:
apart from the current interest rates everything is negotiable in terms of Bank between the head of company and its
bankers.
3.1. The analysis of the conditions of bank.
Bank conditions can be grouped into four types: those that are expressed in rates; those that are denominated in
days; those that are evaluated in franc; those, finally, that correspond to special benefits
3.1.1 - EXPRESSED AS A PERCENTAGE OF BANKING CONDITIONS: RATES.
Most of these clauses are not editable.
1 - The mode for setting the rates.
The prize money depends on its cost for the Bank.
(a) The determination of the basic rate.
Banks derive their resources of three origins mainly:
Deposits at sight
Of the mobilization of effects from the Bank of France
And, finally, money market.
Each resource has a specific cost that depends, for the first time, charges collection and management of the deposits
for the second, the rate discount practiced by the Central Bank, and for the third, the law of supply and demand.
From these multiple costs be calculated a weighted average rate for the whole of the profession in which are
subsequently applied a factor to take into account overhead and profit margin. You then reach a "base rate". The
rate of each type of credit is obtained by multiplying the basic rate by a coefficient which varies according to each of
the techniques of credit risk. Is obtained for each credit formula applicable minimum rate. Of course, every company
wants to apply the minimum rate.
(b) The rate applicable to each company.
The Bank applies, where appropriate, at the minimum rate increase which the magnitude is directly related to the
assessment of the risk presented by a certain client.
In practice, the cost of credit is the inverse function of the size of the company. But large companies are not always
those that pose the lowest risk. Also this system has been temperate, insofar as the interest rate depends on the
judgment that deals the Bank with his client. These rates are generally little changed. It is not the same conditions
for their application.
The real reason behind evaluating the cash for the company by managing the bank flows compared to the company’s
flows, resists in the fact that the company and bank works based on two different calendars. Usually banks work five
day on 7 of the week, from Monday till Friday. And in these days the company doesn’t work permanently all the days
in a full way. Some days the company work half day which we call them “Jour non Ouvré” or “Non-Opened Days” in
which the company works half days, or when they work all the day we call it “Jour Ouvré” or “Opened Day”.
Therefore, the treasurer should be always aware of these days so that the equilibrium between the inflows and the
outflows stays always on the right level. As the previous table and graphic show, the appropriate management and
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