Optimizing Cash Flow

In a recent article, “Optimize Cash Flow to Fund Growth”, Deloitte recommends that private companies integrate cash flow management techniques into their overall financial processes, giving cash flow the same focus given to such high-priority activities as expansion plans or new product launches.

The article further recommends a disciplined approach to treasury management, as well as inventory management, managing fixed and variable costs, collection of receivables, and negotiating favourable terms from creditors. It also includes a handy list of tips to optimize cash flow.

For a link to the Deloitte article, click here.

With comprehensive, ready-to-use policies dealing with:

• The Revenue Cycle
• The Purchasing Cycle
• Inventory and Costing
• Payroll
• Banking and Treasury
• Fixed Assets, and
• Accounting and Reporting

Finance and Accounting PolicyPro (FAPP) is an ideal way for small to medium size private firms to implement such a disciplined approach. For a complete table of contents of FAPP, click here.

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Effective August 1, recent changes to the Ontario Business Corporations Act (OBCA) and the Partnerships Act make some significant changes to corporate governance rules, including:

• Reducing the requirements relating to the residency of directors
• Imposing further restrictions on directors in conflict of interest situations
• Repealing the financial assistance requirements currently in the OBCA
• Increasing the liability protection of a partner in a limited liability partnership

For a useful overview of these amendments, which compares them to the previous provisions in the OBCA, written by Tim Reibetanz and Matthew Lawless of the Business Law Group at Blake, Cassels & Graydon LLP, click here.

For a comprehensive collection of ready-to-use corporate governance policies, see Volume II – Governance of Finance and Accounting PolicyPro. For more information, click here.

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In a recent report from the Information and Privacy Commissioner of Alberta, the Calgary Health Region (CHR) was found in contravention of the Alberta Health Information Act for failing to implement and enforce privacy and security policies.

A laptop computer issued to a mental health therapist by the CHR was stolen from her home. The computer contained a database of more than a thousand patient records. The patients were all children under the age of six, and their records contained a wealth of personal and health information.

In the investigation, the Commissioner learned that the mental health therapists, who did not routinely work in a hospital setting, shared information by downloading the entire program database, adding information to it for the patients they worked with, then uploading the revised database for everyone to share. All patients were included in the database, and the information was not encrypted.

The Commissioner found a lot of inherent problems in this practice. First, the Health Information Act stipulates that a custodian (i.e., the CHA) must use health information in a limited way, only using or disclosing information essential to undertake the intended purpose. Downloading an entire database, including past and current patients seen by all therapists, did not meet that test. The Commissioner noted that setting up a Virtual Private Network (VPN) where the therapists could securely login to the database over the Internet, would be a much better solution.

More serious, though, was the CHR’s failure to adequately foresee threats that it should have reasonably anticipated. Although thefts of laptop computers are common, there was no evidence that the CHR had undertaken a risk assessment, which the Commissioner notes “is a feature found in all information security best practice guidelines and standards.”

It also found that the CHR had a number of documented security policies and procedures, like password rules and encryption recommendations, which if enforced and supported, might together have provided sufficient “defense in depth” to prevent the likelihood of loss and damage. Unfortunately, having written the policies, the CHR did little to ensure that they were understood and enforced, or that employees were trained to follow them. In conclusion, the Commissioner found that the CHR had failed to meet its duty to protect its health information.

Information Technology PolicyPro contains more than 60 ready-to-use IT policies and procedures, covering everything from risk assessment to data, network and physical security. For more information, click here.

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When Jeffrey Sherman, co-author of Information Technology PolicyPro, saw this recent tidbit on CAmagazine.com, his comment was “That’s both an HR and an IT problem!”

Indeed it is. The link in CA magazine is to a summary of results from a recent survey of IT workers, who admitted to snooping in confidential employee files, maintaining access to systems even after they had left a company, and very sloppy password security practices. These are the very kinds of problems that well-drafted, vigorously-enforced HR and IT policies can prevent.

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About the PolicyPro Bulletin

Editor: Colin Braithwaite, Managing Editor – PolicyPro.

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PolicyPro Bulletin ISSN: 1718-5866 Copyright ©2007, First Reference Inc., All Rights Reserved.