Page 134 - Accounting Best Practices

c06.qxd 7/31/03 1:43 PM Page 123
123
6–12 Use Internet-Based Cash Flow Analysis Software
work may remind one of the years-long work of a group of monks who write a
book by hand.
A much easier approach is to use Internet-based software to more rapidly
marshal the flow of information. An example of such software is provided by
eTreasury (which is located at www.etreasury.com). Under this approach, a user
organization signs up with eTreasury, which is paid on a subscription basis, and
gives it the company’s list of banks and bank accounts. The staff of eTreasury
then takes two to three days to contact each bank and arrange for automated port-
ing of the company’s cash transactions to the eTreasury site, where they are com-
bined and reconciled. This results in a daily cash position worksheet that the
accounting and finance staffs can use to determine the correct borrowing or
investing decisions for the day. Because of the great reduction in labor that would
otherwise have been required to create the cash position worksheet, this also
means that the information will be available much earlier in the day than would
otherwise be the case, yielding more time in which to make the best cash man-
agement decisions.
In addition to this basic function, the site allows users at remote locations to
enter special transactions, such as requests for wire transfers, directly into the
site. This allows users at the corporate headquarters to see all cash-related trans-
actions at the same time, while avoiding the use of manual entries of these trans-
actions, which usually involve faxes of requested transactions from outlying loca-
tions, that are then keypunched into a central electronic spreadsheet.
This approach also carries with it the advantages associated with any appli-
cation service provider (ASP), such as the avoidance of any investment in soft-
ware or hardware, or the information technology staff that would otherwise be
needed to maintain an internal installation. Furthermore, the responsibility for
keeping the site up and running at all times falls on the supplier, rather than the
accounting or treasury department. In addition, eTreasury has a data file down-
load that can be modified for automated porting to a company’s general ledger, so
that cash transactions can be integrated with internal accounting systems with a
minimum of effort.
There are some disadvantages to using Internet-based treasury software. One
problem is that access to it is predicated on the reliability of Internet access,
which still does not match the reliability of internal networks. Also, these sites
are designed for companies with a smaller range of banking relationships (in the
case of eTreasury, information from four banks is the maximum allowable
amount that will be automatically collected and presented); for those with a
larger number of relationships, it is still necessary to purchase more expensive
software and install it in-house. However, despite these problems, the use of an
Internet-based treasury site may be well worth the effort for those organizations
that are currently spending a large amount of staff time consolidating banking
information for investment and borrowing purposes.
Cost: Installation time: