Post Office Cash Management V1.1 Dec 2011

Evidence on official site

POL00085875
POL00085875

SWYDDFAR ‘ '

Cash Management

Post Office® V1.1 Dec 2011
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POL00085875

Why is good cash ~~
management important?

¢ Post Office Ltd has to ensure that enough cash is provided to
branches to be able to serve our customers

* Between £400m and £500m needs to be held on a daily basis to
operate our network

* This cash is referred to as ONCH — Overnight Cash Holdings

* This cash is loaned to us by Government who charge us an
interest rate for every £1 that we are holding in our branches

¢ Therefore we pay between £12m and £15m per year for the amount
we need to have to operate.

Post Office® 1.1 Dec 2011
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Why is good cash cos .
management important?

eIn order to keep costs to a minimum, cash levels are
calculated using a tool called Flexible Planning, which
uses historical payment information

*Un-necessary costs are incurred to the business if
individual branches ignore the Flexible Planning
information or don’t return all excess cash

elf every branch in the network held £1000 too much, this
would result in an annual interest cost of £360k.

Post Office® 1.1 Dec 2011
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Why is it important to you?

e Subpostmasters are responsible for the amount of cash in their
branch

* You need the right levels of cash to be able to serve customers

¢ We can’t re-invest in the business if un-necessary costs are
incurred

* Holding too much cash is a cost to the business, which it cannot
afford

* Holding too much cash is a security risk

¢ Subpostmasters can be deemed financially liable if excess cash is
held if an incident occurs

* Having good controls in place enables you to monitor the

Post Office® 1.1 Dec 2011
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Cash Management

*Financial Year 2008/09 - average nightly
Network cash holdings (as at week 46) = £612.3m

*Cost of holding Cash and Bureau = £36.7m pa

eAverage EXCESS cash held each night in the Network
(as at week 46) = £127m

*Cost to the business of excess holdings is £7.6m pa.

Post Office® 1.1 Dec 2011
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What you MUST to do to OE ;
manage cash effectively?

v Make a daily accurate cash declaration for every stock unit
before 7pm

v Keep levels of cash in your drawer to a minimum — secure
all excess cash in your safe

» Get to know your customers and plan how much cash you
nee

¥ Check planned orders and compare this against your plan
v Return all excess cash as requested
v¥ Send cheques off as requested.

Post Office® 1.1 Dec 2011
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What you MUST do to manage IN @e)
cash effectively? Gee)

XHave cash on the counter in view of the public
XHold money “just in case”

XDo any more transactions in a stock after a cash declaration
is made and the stock unit won’t be used the following day —
the cash declaration has to be the last thing you do

XKeep un-useable notes and un-used coin in your branch —
remit these out as these still incur costs.

Post Office® 1.1 Dec 2011
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POL00085875

SWYDDFAR

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Any
Questions

Post Office® 1.1 Dec 2011