Infor FSM | How To Use Cash Position Worksheet for Intraday Bank Statements

Revenue is vanity, profit is sanity and cash is king.

In this article, we will explore how Infor FSM can help you manage your money on a daily basis through cash positioning.

I. Cash Positioning

Daily Cash Report or Cash Position Worksheet is used to report on the current day bank balance and helps with active cash management. This report is primarily driven by the intraday bank statement.

II. Intraday Bank Statements (IBS)

From Ivo Postma of Zanders Consulting:

Intraday bank statement (IBS) reporting, a service that your house bank can provide your company, enables your cash manager to understand which debits and credits have cleared on your bank accounts throughout the current day.

Intraday Bank Statements offers a cash manager additional insight in estimated closing balances of external bank accounts and therefore provides the information to manage the cash more tightly on the company’s bank accounts.

Compared to intraday bank statement reporting, end-of-day (EOD) bank statement reporting is only available the next calendar day. The information therefore always comes too late to be meaningful for cash management decisions – apart from providing an opening bank balance for the next day.

Rationale behind IBS reporting

So, why would a Treasury typically start implementing IBS reporting in its cash management processes?

1. Cash visibility:?In general, IBS reporting will provide your cash management function an additional tool to improve cash visibility. Achieving cash visibility intrinsically might not be a goal of its own, but by achieving visibility, the cash manager now has information to make certain economically relevant decisions in certain situations.

2. Managing cash:?By creating cash visibility, we now have an opportunity to manage cash on our accounts in an intelligent way. In case we estimate a positive closing balance, we could decide to invest this surplus in, for example, a money market fund or overnight deposit to earn some return. In case of an expected deficit, we need to fund the account to ensure no EOD negative position happens. This can be achieved by transferring funds from another bank account (in same currency), swapping funds from another bank account (in different currency), or funding it from, for example, a facility drawdown.

3. Reduced risk of delinquency:?As we now implemented a process to increase control over our bank balances, we now have less chance of e.g. rejected payments due to insufficient available funds and therefore less chance of being delinquent on certain obligations to pay.

4. Reduced requirements on overdraft facility:?By reducing the chance of having insufficient funds on our account, the overdraft facility requirements can also be reduced.

5. Timely clearing of open items:?IBS can also be used to clear off open items throughout the day, as opposed to only rely on clearing from EOD statements. Benefit here is that KPI’s like days sales outstanding (DSO) will improve and that reconciliation effort is spread out more through time.

III. Infor FSM - Cash Position Worksheet

Once the intraday bank statement is imported, it will show up in the Intraday Bank Statements tab of the Bank Statements page.

The Cash Position Worksheet link is then available for the intraday bank statement.

The Cash Position Worksheet will contain the transactions that cleared for the current day. In the table, you will have the capability to consider forecasts and position amounts for analysis.

If a target balance is needed for the account, it can be set at the Cash Management Account > Detail Tab > Cash Position Target.

In the example above, a target balance of 30,000 was set but the projected cash balance given the transactions that cleared for that day is only 3,075. With this, a transfer of 26,925 is recommended to meet the cash position target.

The cash position worksheet can also help the cash analyst/manager identify opportunities for investing in money market funds or overnight deposits in case of a surplus. A deficit or surplus based on the target can be easily identified by referring to the Variance field.

Hope this helps.

See you in the next article!