Ch.7 Relationship Management and Vendor selection Flashcards
What are the major factors that contribute to a successful long-term mutual relationship
between companies and vendors?
- Open two way communication
- Regular and timely feedback
- Documentation of expectations of both parties in agreements and legal contracts
- Fairly priced, efficient, and effective financial services /products
- Complete, Candid, and timely disclosure of information by both parties.
What factors affect the pricing of bank loans?
- Cost of funds
- Credit Rating
- Total loans committed and o/s
- Service fees
- Deposit balances maintained
- range of other services used
- loan maturity
- Revenue size and importance of overall relationship to the lending institution
- Competition
List some of the important documents required as part of a relationship with an Fl.
- Service Agreements
- Account resolutions
- signature cards
- articles of incorporation
- contract for depository account
What is an SLA?
Service Level Agreements
- seperate document or part of a service agreement.
- specific metrics to be followed such as
What concerns should a treasurer have about service provider access to confidential information?
- they must prevent any loss of confidentiality.
- Conflicts of interest
What is meant by KYC?
KNOW YOUR CUSTOMER
- during the opening of accounts the bank must provide due diligence to make sure the account hold is not conducting criminal acts.
What is a vendor scorecard?
-measures a banks performance in both qualitative and quantitative method
What are the four major vendor selection methods, and what is the main purpose of each?
- Informal Review
- RFI
- RFQ
- RFP
In addition to treasury, who are the major stakeholders in a treasury RFP?
- Business Operations
- Tax an Legal
- Accounting
- IT Systems
- Audit
- Supply Chain /Procurement
Describe value dating.
- time that banks have the availability of funds…neither issuer or payee have the funds for a couple days. This is streamlined now, but can be an issue across the globe.
Compare and contrast average ledger balance and average collected balance.
-sum of daily balances divided by days in the period
- sum of daily collected balances divided by the days in the period
the difference is the float
Compare and contrast fee compensation and balance compensation in the United States.
fee compensation theory suggests that you invest the funds elsewhere and make money at a higher rate…paying the fees. Balance compensations suggests you keep a level of cash on hand to wash the fee with the ECR
What is political risk?
From a monetary policy standpoint, the government can take negative actions that may put your financial health at risk
What is an SSAE 16 report?
Standards for attestation engagements
- A report of the service providers risk
- Assurance measures for companies to do business with FI’s
