Page 138 - Accounting Best Practices

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Summary
profits—one of the few functions covered in this book in which corporate man-
agement can see an immediate and measurable impact as a result of implementing
best practices.
Given the high visibility of implementing cash management best practices, it
is important to install as many of them as possible. In particular, there should be a
set of lockboxes in place that will reduce the mail float from customers, as well as
consolidation accounts that accumulate funds from the lockbox accounts and
move them to the central bank account. There should also be zero-balance
accounts to handle cashed payroll checks, and a controlled-disbursement account
for paying suppliers. If this array of bank accounts is in place and is properly
managed, there should be a noticeable increase in the average amount of funds on
hand that can be profitably invested.