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Corporate Cash Management #362126

Course Overview

Credit

Amount

CPA

Course Author: Steven M. Bragg, CPA Field of Study (CPA): Management Services

Course Description

Course publication/revision date: This course was updated on 5/21/2026.

The proper management of cash is an essential part of business operations. Corporate Cash Management provides an essential framework for the development and operation of a cash management system. It does so by showing how to forecast cash flows, which can then be used as the basis for a campaign to enhance the inflow of cash to the organization. The course also notes the systems used to collect, concentrate, invest, and disburse cash, as well as the supporting controls and measurements needed to monitor these systems. It also covers the related topics of fundraising and risk management. In short, Corporate Cash Management is a useful tool for developing a comprehensive system of cash management.

Table of Contents

Chapter 1 - Introduction to Cash Management1

The Nature of Cash Management	1
The Cash Manager Job	2
Responsibility for Cash Management	5
Cash Management Centralization	6
Banking Relationships	8
Types of Bank Accounts	9
Bank Account Analysis	10

Chapter 2 - The Cash Forecast14

The Cash Forecast	14
The Short-Term Cash Forecast	15
The Medium-Term Cash Forecast	18
The Long-Term Cash Forecast	19
The Use of Averages	19
The Use of Clearing Dates in a Forecast	20
Automated Cash Forecasting	21
The Reliability of Cash Flow Information	21
The Impact of Special Events	23
Cash Forecasting Documentation	23
The Foreign Currency Cash Forecast	24
The Cash Forecasting Procedure	24
Cash Forecast Reconciliation	26

Chapter 3 - The Bank Reconciliation29

The Bank Reconciliation	29
The Daily Bank Reconciliation	31
The Proof of Cash	31
Cash Overdrafts	32
Bank Reconciliation Problems	32

Chapter 4 - Cash Management Information Requirements35

Cash Transfers	35
Purchase and Sale Transactions	35
Liquidity Tracking	36
Interest Income	37
Mark to Market Tracking	37
Foreign Exchange Exposure Tracking	37
Counterparty Risk Tracking	38
Letter of Credit Tracking	38
Supply Chain Financing	39
What If Scenarios	39
Data Feeds	39
Accounting	40
General Information Requirements	40
Manual Features	41
Reporting Requirements	41
The Treasury Dashboard	42
Control Issues	42
The Treasury Management System	43

Chapter 5 - Cash Receipts48

Check Receipts	48
Check Receipt Improvements	49
The Bank Lockbox	49
Automatic Cash Application	51
Mailstop Number	52
Remote Deposit Capture	52
Cash Receipts	53
Cash Receipts Improvements	53
Credit Card Receipts	54
Credit Card Receipt Improvements	54
Enter Information in On-line Form Immediately	54
On-line Payment Apps	55
Debit Cards	55

Chapter 6 - Cash Concentration Systems57

The Need for Cash Concentration	57
Cash Sweeping	58
The Zero Balance Account	59
Multiple Sweep Arrangements	59
Manual Sweeping	60
Sweeping Rules	60
Sweep Problems	60
Sweep Costs	61
Notional Pooling	62
Notional Pooling Problems	63
Notional Pooling Costs	63
Multi-Tiered Banking	63
Hybrid Pooling Solutions	64
Cash Concentration Best Practices	64
Cash Concentration Alternatives	65
Accounting for Cash Concentration Transactions	65
The Cash Sweeping Procedure	67

Chapter 7 - Types of Payments71

Cash Payments	71
Check Payments	72
Float	72
Advantages of Checks	73
Disadvantages of Checks	73
Bank Drafts	73
Procurement Cards	74
ACH Payments	74
Advantages of ACH	75
Impact on Float	75
Global ACH	75
ACH Payment Fraud	76
Wire Transfers	76
The Letter of Credit	77
The Standby Letter of Credit	78
FedNow	78
Stablecoin Payments	79
Positive Pay	79
The Check Payment Issuance Procedure	80
Payment Procedure Alternatives	83

Chapter 8 - Working Capital Enhancements86

The Impact of Working Capital on Cash Management	86
Accounts Receivable Enhancements	86
Credit Enhancements	87
Billing Enhancements	88
Collection Enhancements	88
Discrepancy Management	89
Accounts Receivable Policies	90
Inventory Enhancements	90
Product Design	91
Product Record Keeping	92
Inventory Acquisition	92
Inventory Ownership	93
Manufacturing Process Flow	93
Fulfillment	93
Inventory Disposition	94
Inventory Policies	94
Departmental Cooperation	95
Accounts Payable Enhancements	95
Terms Renegotiation	95
Early Payment Discounts	95
Payment Processing Frequency	97
Accounts Payable Policies	97
Reverse Factoring	97
Researching Working Capital Enhancements	98
Working Capital Technology	98
Working Capital Forecasting	99
Working Capital Strategy	99
Zero Working Capital	100

Chapter 9 - Investment Alternatives103

Investment Guidelines	103
Investment Strategy	106
Earnings Credit	108
Repurchase Agreements	109
Time Deposits	109
Certificates of Deposit	110
Bankers' Acceptances	110
Commercial Paper	110
Money Market Funds	111
U.S. Government Debt Instruments	111
State and Local Government Debt	111
Bonds	112
The Primary and Secondary Markets	112
The Discounted Investment Formula	113
Investment Classifications	113
The Realized and Unrealized Gain or Loss	117
Accounting for Investments - Purchases and Sales	117
The Gain or Loss Calculation	117
Noncash Acquisition of Securities	118
Assignment of Costs to Securities	118
Lump-Sum Purchases	119
Restricted Stock	120
Conversion of Securities	120
Sale of Securities	120
Accounting for Investments - Dividends and Interest Income	121
Stock Dividends and Stock Splits	121
Noncash Dividends	122
The Effective Interest Rate	122
The Funds Investment Procedure	123

Chapter 10 - Debt and Equity Funding129

Overview of Debt and Equity Funding	129
The Line of Credit	130
Invoice Discounting	130
Inventory Financing	131
Agency Financing	131
Leases	132
The Long-Term Loan	132
Debt Covenants	133
The Borrowing Base	134
Debt Risk Issues	135
Restricted and Unrestricted Stock	136
Registered Stock	136
The Accredited Investor	137
Regulation D Stock Sales	137
Regulation A Stock Sales	138
Accounting for a Loan	139
Accounting for the Sale of Stock	140
The Line of Credit Borrowing Procedure	141

Chapter 11 - Credit Rating Agencies145

The Credit Rating Environment	145
The Rating Process	147

Chapter 12 - Clearing and Settlement Systems150

The Clearing and Settlement Process	150
Correspondent Banks	151
Check Clearing	151
Foreign Check Clearing	153
The Automated Clearing House System (ACH)	154
CHIPS	156
Fedwire	156
CHAPS	157
T2	158
Continuous Linked Settlement	158
SWIFT	159

Chapter 13 - Foreign Exchange162

Buying and Selling Currencies	162
Types of Foreign Exchange Risk	163
Risk Management Alternatives	165
Take No Action	165
Avoid Risk	165
Shift Risk	166
Time Compression	167
Payment Leading and Lagging	167
Build Reserves	167
Maintain Local Reserves	167
Hedging	167
Proxy Hedging	168
Types of Hedges	169
Loan Denominated in a Foreign Currency	169
The Forward Contract	169
The Futures Contract	171
The Currency Option	171
The Cylinder Option	172
Swaps	173
Netting	173
Cash Flow Predictions and Hedging	175
Hedging Best Practices	175
Accounting for Hedges	176
The Foreign Exchange Hedging Procedure	179

Chapter 14 - Interest Rates184

Types of Interest Risk	184
Risk Management Alternatives	184
Take No Action	185
Avoid Risk	185
Asset and Liability Matching	185
Hedging	185
The Forward Rate Agreement	186
The Futures Contract	187
Interest Rate Swaps	189
Interest Rate Options	190
Interest Rate Swaptions	193
Accounting for Interest Rate Hedges	194

Chapter 15 - Cash Management Controls198

The Cash Forecasting Controls Environment	198
The Cash Concentration Control Environment	199
The Funds Investment Control Environment	200
The Foreign Exchange Hedge Control Environment	202
The Debt Procurement Control Environment	203
The Stock Issuance Control Environment	204
Additional Cash Management Controls – Fraud Related	205

Chapter 16 - Cash Management Metrics208

Cash Management Metrics	208
Cash Conversion Cycle	208
Days Sales in Accounts Receivable	209
Days Sales in Inventory	210
Days Payables Outstanding	211
Working Capital Productivity	212
Fixed Asset Turnover Ratio	212
Auto Cash Application Rate	213
Suspense to Receivables Ratio	214
Actual Cash Position versus Forecast	215
Burn Rate	215
Borrowing Base Usage	216
Average End of Day Available Balance	216
Earnings on Invested Funds	217
Unhedged Gains and Losses	217

Answers to Chapter Questions220

Glossary235

Index240

Course Details

Author: Steven M. Bragg, CPA

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.

Publication/Revision Date: 5/21/2026

Course Exam Questions (online): 75 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Identify the key cash management tasks and who is responsible for them.
Specify the sources and reliability of information used in cash forecasts.
State the formats and uses of the bank reconciliation, as well as the types of differences that may arise.
Cite the information requirements of a cash management system, and the frequency with which this information must be collected.
Specify the requirements for counterparty risk tracking.
Identify the control issues associated with a cash management system.
Recognize the methods available for collecting and processing cash receipts.
Specify the features of the main cash concentration systems, and the situations in which they should be used.
State the characteristics of the different methods of payment, and when they should be used.
Specify how positive pay and its variations can be used.
Recognize the techniques that can be used to reduce the investment in working capital.
Cite the more common cash investment strategies and investment instruments, and the circumstances under which they should be used.
Describe the accounting for investment transactions.
Recognize the role of agency financing entities, such as the Ex-Im Bank.
Specify the types of debt funding and the major stock sale exemptions, as well as restrictions on their use.
Identify the requirements for being classified as an accredited investor.
Identify the main credit rating agencies and the types of credit ratings.
State the features of and differences between the different clearing and settlement systems.
Recognize the role of a correspondent bank.
Identify the main aspects of foreign exchange risk and the methods available to mitigate it.
Specify the impact of netting on hedging activity.
Identify the main aspects of interest rate risk and the methods available to mitigate it.
Cite the controls that can be used for the cash management function.
Specify the areas in which cash management metrics should be employed, as well as how to calculate the key metrics.

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