When the $200 million Art Institute of Chicago initiated a treasury function in 2004, it hired Margaret Annett, a treasury veteran (Borg Warner, Amoco) to run it. She found a hodgepodge of bank accounts that required tedious, manual reconciliation, so she drafted a plan to rationalize cash management and added 10 new receiving accounts and split an all-purpose depository account into four.
"Most treasuries are reducing accounts to save money, but we needed to add accounts because
different business activities were commingling funds and creating a reconciliation nightmare. We needed more granularity. Now all cash flows are segregated by business unit."
The new account structure doesn't save money, but it does untangle cash flows. Even more significantly, it improves security. When Annett, who is assistant treasurer, arrived, none of the Art Institute's disbursing accounts had positive pay and ACH debit blocks or filters. Now they all do. And all transactions now require an initiator and an approver.
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