University of Toronto – Cash Management CAUBO June 2006 By Helen Choy

Student fees Student fees for self-funded programs, Sales of Goods & Services, Research Grant Contracts Cash Inflows Any bank Clearing bank General Bank Account Master Card Account Provincial Operating Grants & Investment income Trust Bank Account Research Grants (Wires) Donations USD Account

Cash- in-action Short-Term Current Account Payroll Expenditure Account General Bank Account Cash Outflows Mastercard Account Suppliers, affiliates, research partners, taxing bodies Individuals (net pay) Foreign Drafts Imprest & Petty Cash Investment By UTAM (Longer- Term) $US Account

The beginning… UTAM formed in April 2000 UTAM formed in April 2000 Cash management transferred to Financial Services Dept. Cash management transferred to Financial Services Dept. Assessment & more understanding Assessment & more understanding Hired help (3 months) for data gathering Hired help (3 months) for data gathering Used downloads from financial systems, investments & banking reports and spreadsheets Used downloads from financial systems, investments & banking reports and spreadsheets

Now that we know more… Identified patterns Identified patterns Identified cash volume & timing Identified cash volume & timing Consider impact of major upcoming cash flow changes Consider impact of major upcoming cash flow changes How to best perform cash management? How to best perform cash management? What tools to use? What tools to use?

Objective of Cash Management Maximize funds available for investing Maximize funds available for investing Accurate and timely information for budgeting and forecasting Accurate and timely information for budgeting and forecasting Accurate and timely information for borrowing and internal lending Accurate and timely information for borrowing and internal lending Accurate and timely forecast of capital available for investment Accurate and timely forecast of capital available for investment

Functions and reports Daily cash requirements & transfers Daily cash requirements & transfers Monthly forecast for next 3 months Monthly forecast for next 3 months Monthly forecast for the fiscal year Monthly forecast for the fiscal year Annual long-range budgets - multi- year Annual long-range budgets - multi- year Other cashflow-related analysis and reports Other cashflow-related analysis and reports

How… Worked closely with other areas with information affecting cash inflow & outflow Worked closely with other areas with information affecting cash inflow & outflow Used downloads from system & spreadsheets to summarize & report Used downloads from system & spreadsheets to summarize & report Expanded the existing daily cashflow spreadsheet Expanded the existing daily cashflow spreadsheet

How… Detailed forecast of Provincial Grants: Detailed forecast of Provincial Grants: –Gathered historical data & budgets –monitored receipts by program & dates –Revised with new information Detailed forecast of Research wire deposits: Detailed forecast of Research wire deposits: –Gathered historical data & awards information –Monitored receipts by sponsor & dates –Revised with new information

How… Detailed forecast of payments: Detailed forecast of payments: –Classified cheques over $50K by major categories, by month issued and by month cashed. –Tabulated amounts for cheques under $50K by issued and cashed date. –Daily estimate of cheques to be cashed – over and under $50K

How… Other: Other: –Modelled and analyzed the impact of changes in major cashflows –Continued updating historical data and graphing cashflows –Prepared daily cashflow balances and compared to monthly averages

Benefits Reduced amounts kept in our bank accounts without incurring overdraft charges, hence kept more funds invested Reduced amounts kept in our bank accounts without incurring overdraft charges, hence kept more funds invested Better estimate of amounts available for investing (budgets and forecast) Better estimate of amounts available for investing (budgets and forecast) Assisted in decisions on internal lending and external borrowing Assisted in decisions on internal lending and external borrowing

Time spent Daily cash management: 0.25 FTE Daily cash management: 0.25 FTE Gathering and updating and reporting of related information: 0.3 FTE Gathering and updating and reporting of related information: 0.3 FTE Monthly forecast and annual budget: 0.2 FTE Monthly forecast and annual budget: 0.2 FTE