Cash Management – How to Make a Daily Cash Report – Part 2

May 26, 2018 | By admin4u | Filed in: Uncategorized.

If your company maintains 2 or 3 banks for processing your payment, we need to modify a little bit of technology so that we can effectively check all bank accounts, while managing the extra income, carefully invest in additional funds for short term investments. We assume that your company has 3 bank accounts, and we call it Bank A, Bank B and Bank C. Choose a bank as its main bank, where you collect all the cash in that bank. Let's say our big bank is B Bank. This means that all major collections must be included in this bank account. Large-scale payments such as subcontractors and payment on this cash account

Any payment that is small in amount but with a repeat rate is high, such as payment of utility bills, cash refunds, staff claims and other payments are made using Bank A. Inbound checks must be deposited into bank A, with more or less the same amount of checks that A bank account balance is always in an ideal balance.

have a specific payment pattern for this month, for example, we only pay to our suppliers and workshops only on the 25th of this month, we use Bank C to pay for the check. Here, we use the ZBA technique, which means Zero Balance Accounts, where we only transfer money from your bank account only from Bank B to Bank C, once a month. This means that there is no extra cash in Bank C, which means that Bank B has all the additional cash for short-term investment purposes. I will continue to explain the topic of short-term investments when we come to this topic soon.

All of the techniques described above seem complicated, but this is due to the quicker and more accurate preparation of daily cash deposits without the need to take the time to figure out the serial number in each category if we use only one bank. Based on our example above, you will notice that Bank A applies to the payment of invoices, staffing and other payments. This means that you only need to identify the Bank 3 serial number checks. Bank B has only 2 payments, subcontractors and salaries, and C Bank for suppliers and workshops. Another reason is to avoid A and C Bank's bank balances, which are not looking for interest income. All of our revenues are collected at B Bank, where we can hold short-term investment placements overnight for one week.

To access our daily bank balance, we calculate a simple quantified calculation, which is the Opening Balance + Incoming Checks – Payment = Closing Balance. When placing all the bank's columns next to each other, we can reach the full closing balance if we complete the closing balance of A, B and Bank C. This is what I call the cash dashboard where we can see our bank balance at one glance. Of course, this is not complete because we still have not taken into account available balances and cash equivalents. This terminology will be explained later in detail.

Source by Kamarulzaman Baharom


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