320 Corporate Finance
- Resolve billing problems quickly.
- Develop regular schedule to follow up delinquent accounts.
- Computerize wherever required.
- Accelerate issue of invoice.
- Improve credit management.
- Negotiate better payment terms.
- Compare the length of timeline with that of other companies in the industry or standards set by the
company. - Assign responsibility to specific individuals and hold them responsible for unfavorable deviation from
standards. - Do not permit cash to stand idle for as much as a day.
- Banks are an important part of the cash system. Develop long term relationships with them.
- Make every effort to speed up the flow of funds.
- Pay bills only when they fall due and instruct personnel in field offices to do the same.
REFERENCES AND SUGGESTED READING
Books
Beehler, Paul (1978). Contemporary Cash Management, John Wiley and Sons, New York.
Hill, N C and W L Sartoris (1988). Short-Term Financial Management, Macmillan, New York.
Kallberg, J G and K L Parkinson (1984). Current Asset Management: Cash, Credit and Inventory, John Wiley and Sons,
New York.
Kallberg, J G, K L Parkinson, and J R Ochs (eds) (1989). Essentials of Cash Management, National Corporate Cash Management
Association, Newtown, CT.
Mehta, Dileep (1974). Working Capital Management, Prentice-Hall Inc., Englewood Cliffs, New Jersey.
Articles
Ang, James S, Jess H Chua, and Ronald Sellers (1979). ‘Generating Cash Flow Estimates: An Actual Study Using the Delphi
Technique’, Financial Management.
Benton, J B (1977). ‘Electronic funds transfer: Pitfalls and Payoffs’, Harvard Business Review, July–Aug.
Blanchard, O, F Lopez-de-Silanes, and A Shleifer (1994). ‘What Do Firms Do With Cash Windfalls’, Journal of Financial
Economics, Vol. 36.
Chambers, John C, Satinder Mullick, and Donald D Smith (1971). ‘How to Choose the Right Forecasting Technique’, Harvard
Business Review, July–Aug.
Harford, J (1999). ‘Corporate Cash Reserves and Acquisitions’, Journal of Finance, Vol. 54, No. 6.
Maier, S F and J H Vander Weide (1983). ‘What Lock Box and Disbursement Models Really Do’, Journal of Finance, Vol. 38,
No. 2.
Nauss, R N and R E Markland (1979). ‘Solving Lock Box Location Problem’, Financial Management, Spring.
Stancill, J M (1980). ‘Getting the Most From Your Banking Relationship’, Harvard Business Review, March–April.
Stone, B K and R A Wood (1977). ‘Daily cash forecasting: A Simple Method for Implementing the Distribution Approach’,
Financial Management, Fall.
Opler, Tim, Lee Pinkowitz, Rene Stulz, and Rohan Williamson (1997). ‘The Determinants and Implications of Corporate Cash
Holdings’, National Bureau of Economic Research Working Paper No. 6234.
Ozkan, Aydin and Neslihan Ozkan (2002). ‘Corporate Cash Holdings: An Empirical Investigation of UK Companies’, Working
Paper, University of York, UK.