CHAPTER19Short-TermFinancing:ManagingCurrentAssetsPART1 InternationalCashManagementINTERNATIONALCASHMANAGEMENTI. INTERNATIONALCASHMANAGEMENT A. SevenKeyAreasInvolveIssues about 1. Organization 2. Collection/FundDisbursement 3. InteraffiliatePayments 4. InvestmentofExcessFunds 5. OptimalGlobalCashBalances 6. CashPlanning/Budgeting 7. BankRelationsINTERNATIONALCASHMANAGEMENTB. GoalsofanInternationalCash Manager:similartodomestic manager 1. Quickandefficientcashcontrol 2. Optimalconservationandusage responseINTERNATIONALCASHMANAGEMENTIssue(#1):anization 1. Advantages: a. Efficientliquiditylevels b. Enhancedprofitability c. QuickerheadquarterINTERNATIONALCASHMANAGEMENT1. Advantages(con’t) d. Decisionmakingenhanced e. Bettervolumecurrencyquotes f. Greatercashmanagement expertise g. LesspoliticalriskINTERNATIONALCASHMANAGEMENTIssue(#2):Collection/Disbursementof Funds 1. KeyElement:Acceleratecollections 2. AccelerationMethods: a. Electronicfundtransfers b. MobilizationcentersINTERNATIONALCASHMANAGEMENT3. MethodstoExpediteCashPayments a. Wirecashtransfers b. ountsinclient’sbank c. Negotiatewithbanks -obtainvaluedatingINTERNATIONALCASHMANAGEMENTIssue(#3):InteraffiliatePayments ting 1. Definition:-offsetpaymentsofaffiliatereceivables/. tingCenter a. setupasubsidiaryinalocation withminimalexchangecontrols b. Coordinateinteraffiliatepayment flows c. NettingCenter’svalue: adirectfunctionofthevolumeof transfers.
