TReAsURYMANAGeMeNT
Graves says it was no longer advantageous to hold the
decision-making window open.
“If a check comes in later, we
will present it the next business
day,” he says.
Gaining the hour or so is particularly helpful when Kruczek
and her one primary colleague
who can also set the cash position are both out of the office. In
that case, staff in Luxembourg
take over the task and get the
final cash position at 2 p.m. Luxembourg time instead of waiting
until 3, Kruczek points out.
Parker gets its presentments
by using its SunGard AvantGard
Integrity workstation to pull data
from Key. Going from two pulls
to one means a one-time repro-gramming by the company’s IT
staff, but it also means Parker
will only pay the bank for one
file transfer a day instead of two,
another small savings, Kruczek
notes. Parker still uses checks
for many of its disbursements.
All but a few are executed from
CDAs at Key, she says.
Since the move to a single
presentment carries no cost for
treasuries and in most cases requires no change in operations,
the response has been almost
universally positive, Graves
reports. Most users log onto the
bank’s Web site to get their report. Now they have the option
of doing it once instead of twice.
Larger companies like Parker
that take the presentment as
downloaded BAI files to a workstation or AP system may have
to make a systems tweak.
In the heyday of controlled
disbursement, a primary benefit
was float. “Float is still signifi-
cant,” notes Dave Robertson, a
partner at Treasury Strategies,
“but it’s not enough to drive de-
cisions in most treasuries today.”
Another benefit has been getting
information to support identify-
ing a cash position early in the
day. Companies that could pin
down their cash position early
could go to the markets and
earn 30 basis points more on
investments or save about that
much on borrowings, Robertson
points out. Now the informa-
tion is more useful for risk and
liquidity purposes, since having
a central point of disbursement
helps control flows and monitor
than 1% today, notes Stephen
Markwell, executive director and
head of disbursement products
at J.P. Morgan. “Companies now
want richer reporting that is
inclusive but also analytical,” he
says.
The move to a single presentment carries no cost for treasuries
and in most cases requires no change in operations.
—keybaNk’s GraVes
cash levels.
That’s certainly true at HanesBrands, the $4.9 billion clothing
maker in Winston-Salem, N.C.
Float has essentially disappeared as a value consideration
in the company’s disbursement
strategy, reports senior treasury
manager Robert Gosma. Instead,
positive pay, including payee
matching, counts more than
presentment times. Check payments are shrinking fast, to just
$2 million a week, vs. $50 million disbursed by wire and ACH.
With minimal float and shrinking
check clearings, cash forecasting has become more accurate,
Gosma adds.
Many banks, including J.P.
Morgan Chase, still routinely
make two presentments, but im-
age-based efficiency has shrunk
the dollars involved in the second
presentment from 20% to 35%
of the day’s total in 2002 to less
as 11 p.m. ET, Markwell says,
adding that in those cases, an
automatic transfer from the fund-
ing account normally provides
hands-off funding.
