Preparing a rapidly-growing company for scale and success

PMC Treasury conducted a Treasury review and recommended changes to prepare the Company for future growth.

Challenges

• Start-up company with no Treasury department and an ongoing ERP implementation

• Unsophisticated privately-held banking partner

• Below market Earnings Credit Rate (ECR) and large uninvested cash balance above FDIC insurance limits

• Simple account structure but no automated movement of cash

• No 13-week cash flow forecast model

• No access to same-day borrowing per the terms of existing credit agreements

Recommendations

• Conduct a bank RFP to identify a long-term banking partner with industry expertise and an ability to provide credit

• Proactively negotiate ECR and develop an Investment Policy so that surplus cash is not idle in a checking account

• Immediately implement ZBA so that payroll account is funded automatically; implement other Treasury Management best practices post bank RFP

• Develop a 13-week cash flow forecast model that ties to Budget categories; validate model by analyzing bank activity data and conducting weekly budget-to-actual variance

• Renegotiate several credit facilities into one revolving facility and ensure same day borrowing is added to the credit agreement

Benefits