Introduction: The problems and solutions in the application of cash pool are theoretically demonstrated and compared. Finally, through the analysis of the case of GE cash pool, it is proved that the group companies in China are more suitable for establishing cash pool, thus realizing the value of cash pool. Big? Have you arrived? Strong? A leap.
First, the general problems of fund management
See table 1 for the relevant financial data of a group company for three years.
This set of data shows that:
1, high idle funds
There is a high amount of bank idle funds in the group company, and the monetary funds mainly belong to the holding subsidiaries included in the consolidated statements.
2. High short-term loans
Group companies borrow a large number of short-term loans, mainly operated by the group headquarters.
3. High financial costs
Due to the high short-term borrowing of the Group, the Group bears high financial expenses, which not only devours the operating profit, but also inhibits the growth of net profit.
High idle funds, high short-term loans and high financial expenses have produced unique? Three highs? Phenomenon, from the data analysis of three consecutive years, this kind? Three highs? This situation is still going on, and the sharp decline in current ratio and working capital has aggravated the company's financial risks and damaged the shareholder value. The subsidiary has high monetary funds, but the parent company has high short-term loans. Why does the parent company not entrust the monetary funds of its subsidiaries? These contradictions are quite intriguing.
Second, did the group appear? Three highs? reason
? Three highs? The reasons for this phenomenon are complicated, among which the main reasons are: subsidiaries control and use resources, subsidiaries at all levels have independent financial rights and management rights, capital surplus and shortage coexist, and internal control of subsidiaries prevails, which weakens the overall resource allocation efficiency of parent-subsidiary system. Due to the legal independence and exclusiveness of subsidiaries, the control right of the group is also subject to various restrictions, which leads to the deviation of overall strategy implementation and the vacancy of actual control right, and then each independent subsidiary goes its own way. Therefore, should the group headquarters fight? Headquarters? Functionally, it can not only monitor the receipt and payment of funds of subordinate subsidiaries in real time, but also strengthen the internal fund adjustment of the group, flexible the fund position, optimize the fund allocation, reduce the cash holding scale, shorten the capital turnover cycle, speed up the capital turnover, and improve the overall efficiency of fund use, so as to realize the group company from? Big? Have you arrived? Strong? A leap. Thus, the fund management system is indispensable, and the establishment of cash pool can be used to optimize interest, improve liquidity and save management costs.
Three. Cash pool
1 the meaning of cash pool
The so-called cash pool is also called the cash manager. Cash pool business mainly includes account balance transfer of member companies, daytime overdraft of member companies, active appropriation and collection, entrusted lending between member companies, and interest calculation of deposits and loans of member companies at the group headquarters.
2, the role of the cash pool
(1) Change external financing into internal financing to reduce interest costs. The cash pool changed external financing into internal financing, which reduced interest expenses. In the cash pool, the positive and negative balances in different accounts can effectively offset each other, and the funds in the sub-account with surplus funds in the account will be automatically transferred to other sub-accounts with insufficient funds. In this way, the enterprise's funds have been fully utilized, and the financing needs can be met within the group without external financing, which not only simplifies the procedures, but also greatly reduces the financing cost.
(2) Improve liquidity management and increase income. In the cash pool structure, each sub-account will maintain a minimum fund balance to fully improve the capital utilization rate and liquidity of the whole group. At the end of the day, the surplus or deficit of any sub-account balance will be remitted to the main account. Therefore, excess liquidity can be better managed and controlled ―― excess funds can be transferred from the accounts of some subsidiaries participating in the cash pool to provide funds for other cash-strapped entities. At the same time, the cash pool concentrates the remaining funds of the Group, so that more effective investment activities can be carried out and profits can be increased for the enterprise. Even if the enterprise does not conduct investment activities, large deposits can enable the enterprise to obtain a higher agreed deposit interest rate.
(3) Save management costs. Keeping a small amount of loans can reduce the cost of capital account management. In addition, the reporting service can provide detailed information reports, simplify the monitoring process of the cash pool, enable the parent company to know the cash flow of each sub-account in time, conditionally control the amount of funds used by member enterprises in the cash pool, clarify the responsibility of internal control and strengthen the effectiveness of internal control, which is convenient for management. Member companies handle credit and bill business online, which improves work efficiency, realizes paperless office and saves costs.
Four. How does the group use the cash pool?
1. Investigate the service quality and service charges of banks and choose cooperative banks.
The pool of funds enables banks and enterprises to form a strategic cooperative relationship, right? Win-win? Institutional arrangements. The success of the cash pool first depends on the service attitude, service quality and service cost of the bank. Can banks provide professional services for group enterprises so that the group can have its own? The bank? In addition, banks can provide personalized fund settlement and cash management services for group customers anytime and anywhere according to the needs of different enterprises, thus reducing the cost of funds and improving the efficiency of fund utilization. In order to promote the cash pool business, group companies should choose banks with high service quality as cooperative banks. The terms and items of the service should include: the bank can automatically transfer funds between the accounts of the enterprises affiliated to the group within the agreed time according to the instructions or authorization of the group, including the transfer from subsidiaries to the head office and the transfer from the head office to subsidiaries; Automatically balance the accounts of all affiliated enterprises at the appointed time every day? Is that clear? Or centralized into the group company account; Implement automatic quota management for the accounts of subordinate enterprises. When the account balance of subordinate enterprises exceeds the limit, the excess will be automatically transferred to the account designated by the head office within the specified time. On the other hand, when the account balance is lower than the limit, the insufficient part will be automatically transferred from the account designated by the Head Office to make up for it within the specified time. In addition, banks should be able to provide fast accounts receivable and accounts payable management, centralized credit granting and diversified financing and investment services. In addition, when the subordinate enterprises of the group are in their own way, they deal with banks alone, and the difference of their respective deposit and loan interest will increase the overall financial expenses of the group; In the cash pool business, although the deposit and loan spreads of the group as a whole have decreased, the "handling fee" for business dealings between the group and banks has increased. For example, in the process of group transformation, some former subsidiaries will borrow money from banks because of insufficient funds, and enterprises may incur 1.5% extra financial expenses. After adopting the foreign exchange cash pool, enterprises will increase the handling fee by about 20 basis points. Although enterprises can still benefit from the two, they have been greatly reduced. Therefore, the level of bank settlement fees is another important selection criterion. Banks should focus on reducing the handling fee of customers' settlement transactions, otherwise the huge handling fee will make the Group flinch from the cash pool business.
2. Establish a timely information communication mechanism among the group headquarters, banks and affiliated enterprises.
Cash pool business
The essence is the pursuit of cash within the group? Zero is on the way? 、? Zero inventory? . To a great extent, this timely realization depends on the powerful communication mechanism within the group and the seamless and timely connection of capital information among the group headquarters, banks and affiliated enterprises. Group headquarters should use a similar ERP system to ensure that the headquarters can obtain the fund income and expenditure and balance of subordinate enterprises in time and truly, or the group headquarters can see the fund accounts of subordinate enterprises at a glance through the Internet. In a? Information asymmetry? 、? Information distortion? 、? Slow information communication? It is impossible for enterprise groups to effectively promote cash pool business. It is an eternal topic to continuously improve the authenticity, timeliness and decision-making relevance of internal fund information reports and promote the management of fund pools.
3. Group headquarters should improve the ability of capital planning, dispatching and distribution and investment decision-making.
The implementation of cash pool business tests whether the subordinate enterprises of the group can obey the overall situation and put the overall benefit of the group in the first place, and also tests the service level and quality of banks. But relatively speaking, the biggest test is the group headquarters, because the fund pool business has pushed the group headquarters to the forefront of the whole group's fund allocation and become the group's fund management? Bridge head? . Group headquarters must have strong capital planning, timely allocation of funds and investment decision-making ability. Therefore, establishing a strong group headquarters for fund management is an institutional arrangement for cash pool business to achieve long-term and substantial results. To this end, the group headquarters should enhance four capabilities:
(1) Centralized and unified external financing capacity. The reason why a cash pool is called a pool must be based on having sufficient cash reserves. The head office should be able to grasp the total scale of capital demand within the group through calculation and analysis, and ensure its strong fund-raising ability and sufficient cash supply through the centralization and unification of fund-raising power.
(2) Capital dispatching ability of the group headquarters. The fund pool business transfers funds from accounts with surplus positions to overdraft accounts in the form of entrusted loans for intra-group transfer. The Group not only manages loan issuance, but also takes charge of capital withdrawal, which is very risky. Therefore, it is necessary to improve the efficiency of capital utilization, ensure the safety of funds and prevent the group's capital chain from breaking.
(3) Capital control of group headquarters. Relying on the cash pool platform, the group headquarters has improved the fund management system and realized the standardization, standardization and integration of fund management and control. From capital budget-capital approval-capital operation-business control-risk prevention-decision support, we can truly achieve annual budget, monthly balance and daily scheduling. What must be adhered to in group fund management? Don't do anything without a plan or spend money without a budget? The principle of capital management, the full implementation of capital budget management, strictly in accordance with the budget to control the flow of funds. The object of group control is not only cash resources and their allocation, but also the internal operation and business operation of its affiliated enterprises. It pays close attention to the future competitiveness, business field optimization and market share growth of its affiliated enterprises, and combines cash pool management with business operation management.
(4) the headquarters' ability to provide quality services to subordinate enterprises. The cash pool business requires the headquarters to organically combine the management and services of affiliated enterprises, integrate services into management and strengthen services in management. This service includes three levels: first, providing financial services to ensure the normal capital needs of subordinate enterprises; Secondly, information services in capital, market and other aspects; Finally, the headquarters should provide financial management guidance and consulting services to subordinate enterprises in a timely manner.
? The main purpose of setting up cash pool is to provide a convenient tool for the management and centralized management of current assets of enterprises. So, in view of the emergence of this group? Three highs? Phenomenon, the existence of cash pool is particularly important. The establishment of the cash pool can help the Group to simplify the process, control operating costs, reduce interest expenses and management costs, and make full use of more core business resources, increase net profit and enhance corporate value.
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