Search
 

Liquidity Is Only The First Benefit Of A Good Forecast

The drive to improve the accuracy of cash flow projections is pushing treasury departments and technology to the fore of strategic planning

By John Labate | Updated on March 01, 2004

Think having excess cash on hand to smooth out the bumps in your forecasting really doesn’t matter much in a world of rock bottom interest rates? Then talk to Jim Burns, general manager of treasury for the $920 million Chicago Transit Authority, the second largest public transportation system in the U.S. Before Burns led an overhaul of the CTA’s treasury department, the office had lost control of the ins and outs of payments throughout the organization.

That all changed when the CTA installed a new ERP system from Oracle Corp. last year and Burns, with the help of its off-the-shelf treasury and cash management modules, went to work reorganizing. Now, helped by the system’s flow of information into and out of treasury, Burns is better able to match future assets and liabilities, and says he has the confidence to put his spare cash to work. “We’ve been able to lengthen our maturity and capture some more yield. Where we were doing overnights or two-days, now we’re able to go out maybe three weeks to a month and pick up three, four, five basis points on our investment portfolio,” he says. The benefits don’t end there. Burns says his office has also been better able to use its cash to improve its relations with key community vendors, making faster and sometimes earlier payments to the many small, minority-owned start-ups that provide the CTA with construction, janitorial and other services. “Being a local entity, we have a commitment to the community. More jobs created at the local level should translate into more ridership now and in the future,” he says.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.