Optimization of the company's cash flow

OVERDRAFT’S COSTS = [33.000.000 DHS (1 + 0.07) /360] x 7 = 2.08
Next graphical presentation highlights the opportunity cost and the cost of the resulting overdraft of uncertainty as
to the date of receipt of a checks issued. Immediately we see the need for sharing between the checks cashed in 7
days to come and others. Which implies an approximate knowledge of the habits of cashing checks by creditors of
the firm.
10
8
Cost of Opportunity
Cost of the Overdraft
6
4
2
0
7 10 20 30
Figure n°10: Opportunity and Overdraft costs’ graphical presentation
The first category of check control the concomitant supply of bank account. On the other hand, for those presented
for payment beyond one week it is cheaper to wait the overdraft. If this second category is important, the Treasurer
will have no doubt same interest in further analysis later. In the example, if he knows that the creditor will collect
the check around the twentieth day, it may practically cancel the cost of the overdraft. Managed to reduce the costs
of overdraft related to the cashing of the checks after 7 days of issuance, it will then address the case of checks of
the first category.
2 - THE STREAMLINING OF PROCEDURES FOR BILLING AND RECOVERING
We often encounter companies whose receivables from customers are greater than their net fixed assets. But while
investment operations are carried out meticulously, delays in payment are made without any calculation of
profitability. Now, if the duration of loans to customers is difficult if not impossible to reduce, at least companies
should restrict to the minimum delays caused by poor organization. This action should be at two levels:
The Organization of customer credit,
The Organization of credit-customer service.
2.1 - The Organization of the customer credit.
IWACO should measure the risk taken by granting payment facilities to be able to protect itself. It must also strive
to accelerate the recovery of funds. Finally, it must organize a customer credit control.
a) Measure of risk 'credit-customer
The taken risk with each client assessment is carried out either with the help of organizations external specialized, or
from publications. These external agencies are of three types:
Services companies specializing in the measurement of risk,
Banks of the client (although they do not always have interest to point out the weaknesses of their client in
order to avoid filing for the bankruptcy) and the Bank of Morocco;
Professional associations, and chambers of Commerce.
Page 95 of 124