{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Session5 - AFP Learning System Treasury Session 5 Module 3...

Info icon This preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 1 AFP Learning System: Treasury Session 5 Module 3: U.S. Cash Management
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 2 Session 5, Module 3: U.S. Cash Management Chapter 8: Payment Systems Chapter 9: Cash Positioning
Image of page 2
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 3 Chapter 8: Payment Systems— Outline Overview of Payment Methods Paper-Based Payments Electronic Payments Payment System Risk
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 4 Profile of U.S. Payments in 2000 Transaction Volume Checks 62% Credit/Debit Cards 30% ACH 8% Fedwire and CHIPS Transfers <<1% Dollar Volume Fedwire and CHIPS Transfers 89% Checks 9% ACH 1% Credit/Debit Cards <<1%
Image of page 4
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 5 Discussion Question Answer: Communication: Transfer of instructions between the payee and payor banks through a clearing system Settlement Occurs when depository bank account is credited and drawee bank account is debited Settlement is final when a payment is unconditional and irrevocable. What are the two steps in the payment process and what do they entail?
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 6 Characteristics of Payment Systems Average Payment Size (2000) Typical Settlement Time Maximum Return Time* Return Risk Security Checks Credit and Debit Cards ACH Wire Transfers $925 $69 $1,010 $3,500,000 0 to 4 days 0 to 2 days 1 to 2 days Immediate 4 days 0 if prior authorization is obtained Debits: 2 days Credits: No returns** No returns High Moderate Moderate for debits None High Moderately high Moderate Low
Image of page 6
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 7 Sample Business Check
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 8 The Check Clearing Process Key event is presentment—the delivery of a check to the paying bank. Value is subtracted from the bank’s account with a Federal Reserve bank (the Fed), a correspondent bank or some other clearing institution. Normally also subtracted from the payor’s account on the same business day.
Image of page 8
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 9 Interbank Check Clearing Checks drawn on banks other than the bank of deposit Clearing channels Clearing house Federal Reserve Bank (Fed) Correspondent bank Direct send
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
v1.1 © 2004 Association for Financial Professionals. All rights reserved. Session 5: Module 3, Chapter 8 - 10 Steps in the Check Clearing System COMPANY A 1. Payor writes check Check COMPANY B 2. Payee receives check 7. Deposit funds to cover check 8. Bank statement BANK A Payor’s depository institution 6. Check
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.
  • Spring '11
  • Richter
  • Credit card, Cheque, Automated Clearing House, Clearing House Interbank Payments System, Association for Financial Professionals

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern