【正文】 to the capital investment strategy, aligning employee and pany interests in ways that promote valuebuilding investment decisions.Companies need to test the impact of spending (and of not spending) in order to determine the true value of the capital investments being made. Establish a formal and consistent method for ranking, paring and selecting investment projectsTrack asset condition and age profile and link to capital planning profileCompetent Capital Project Evaluation TeamInvestment decisions are often driven by those managers who hold more influence over their peers, and driven less by their contribution to pany strategic goals. Providing a formal process for scoring and paring projects allows the pany to make better, more equitable capital allocation decisions.Asset condition, age profile and other asset characteristics should feed into the planning process when making capital allocation decisions.Capital evaluation personnel should be skilled in various areas such as economic modelling (discounted cashflows/NPV), scenario analysis etc.Manage Capital Planning56169。 2023 Arthur Andersen All rights reserved.Best Practice RationaleSelect core cash management banking partners. Service has replaced price as the determining factor for selecting a cash management bank. Since many of today39。s cash management banks have reached parable levels of technological petence, reliable, highquality service is the yardstick panies now use to select banking partners. And partners is the key word. Today panies consolidate their accounts and use fewer banks. They partner with these select few banks to explore innovative ways to streamline and automate processes, to improve information flow, and to lower costs.Develop accurate cash forecasting models. Because cash flows are neither certain nor synchronized, panies turn to forecasts to reduce uncertainties and to help time disbursements with ining receipts. Some businesses use forecasts to look for cash surpluses so that they can decide how much and for how long to invest excess cash. Other businesses use them to foresee cash shortfalls so they can plan how much and when to borrow. Specifically, cash forecasts help determine: frequency of funds transfers。 amount of funds needed pany39。s ability to prepay debt。 foreign exchange and hedging strategy and shortterm investment strategy.Review cash management system regularly. The cash management or treasury review evaluates how well the cash management system is performing. These reviews may be conducted in response to internal or external forces affecting the pany, to identify existing processes that can be improved, or as a recurring tracking measure. Reviews provide some assurance of the reliability of financial data without conducting an examination in accordance with generally accepted accounting principles or audit.Manage Cashflow57169。 2023 Arthur Andersen All rights reserved.Best Practice RationaleImplement a prehensive and flexible fixed asset software program. Software designed specifically for asset management and depreciation putations has bee essential because of the everchanging regulatory and management reporting requirements of fixed asset accounting, the plexity of current tax laws and the sheer volume of asset acquisitions and disposals Today39。s programs feature powerful automatic calculations and greatly reduce reporting errors. Carefully chosen and monitored, these programs allow managers to make more informed decisions, trim operational costs, and help users avoid the endofyear rush by updating fixed asset schedules quickly. Track inventory and maintenance of fixed assets. A key principle of asset management is that an asset cannot be managed and its associated costs cannot be controlled if there is no indication that the asset exists. With the continuing emphasis on managing costs and maximizing equipment usage, accounting managers and controllers must know the status of all fixed assets. Careful tracking through bar code technology and reconciliation to a puterbased data repository provide continuous realtime information regarding location, description, and history of all assets. Establish standards and policies for capitalization, depreciation, and maintenance of fixed assets. When fixed asset costs exceed budget it usually means that effective controls have not been implemented. Setting panywide standards that are uniform defines the results expected in a costfocused environment and provides a point of reference for all personnel that use fixed assets. Key factors in controlling fixed asset costs include establishing standards for capitalization, depreciation, and maintenance.Manage Fixed Assets58169。 2023 Arthur Andersen All rights reserved.Best Practice RationaleStrengthen cash flow by explicitly managing payment dates and terms. Actions in accounts payable have a large impact on the cash flow of a business. First, how fast a pany meets its accounts payables obligations affects how much cash it is able to keep on hand, and second, how much money a pany spends (or does not spend) on late payment fees and interest significantly influences expenses. Manage munication with suppliers to establish mutually agreeable practices. A pany39。s accounts payable actions directly impact the trust suppliers have in the anization: honoring its agreedupon payment termsby paying its bills on time, as promiseddoes more to build trust with suppliers or tear it down than any other action the pany can take. By municating about each others39。 practices, a pany and its suppliers work together to improve processes, and as a result, suppliers bee fully invested in the success of a pany39。s accounts payable process. Suppliers then offer more cooperation to a pany in terms of trade credit, technical assistance, and a willingness to help in emergencies.An