Is Your Money Working As Hard As You?

September 07, 2018

Keywords: Investment Strategy, Active Management, Client Focus

Finance professionals are busy. In today’s world, companies and public entities are doing more with less – stretching their employees’ responsibilities and their revenue dollars.

Typical responsibilities of financial managers or officers include providing financial reports and interpretations, analyzing expenses and revenues, developing trends and projections, evaluating expense reduction opportunities, maintaining the budget, overseeing daily cash flow and departmental operations, liaising with all departments and management or council, and providing leadership. In short, you’re responsible for maintaining the financial health of the entire organization. It’s a big job. And your entity works hard for those revenues.

But what happens when the cash flows come in? Where do those assets sit? How are they invested?  Are they making as much money – yield, interest, return, etc – as they could? In short, is your entity’s money working as hard as you?

Annual Responsibilities

In addition to the “typical” daily responsibilities mentioned above, financial managers also manage or participate in a host of larger annual or ad hoc responsibilities. These include strategic planning, budget preparation, annual report preparation, and audit. For public school districts, as an example, they must file their annual reports (CAR) in September and typically have auditors descend soon after.

During these particularly busy periods, it’s important to know that your assets are working for you and don’t require daily investment conversations.

Major Cash Flows

Often, entities have significant cash flows at various periods throughout the year. These could include a wide variety of flows, including state aid payments for schools, property tax receipts for all public entities, federal subsidy payments for crop insurers, corporate contributions for captive insurers or pensions, among many, many others. These cash flows may be normal in the course of your operations, and used to help fund operations. Or, they could be abnormal cash flows such as bond funds that are used for a specific purpose.

Are you making decisions about how to invest each dollar that comes in? Or are you setting your policies and allowing investment professionals to handle the details for you?

What Your Money Can Do

Not all of your cash flows and assets have the same job. Some are required to help fund operations and should be invested in cash equivalents or short term liquidity structures. Some assets are designated for specific purposes – repaying debt, funding liabilities – and should be invested in a way that both preserves capital and matches your cash flows and assets to your liabilities. Yet other assets are designated as reserves or surplus and should be managed in a way that delivers yield and growth while supporting your strategic organizational objectives.

No matter the size, timing, or objective, your assets should be invested 1) in a manner that is aligned with the purpose of the funds and 2) without you having to interact with it. A good first step is to assess your current portfolio yield to see if it is earning you a decent return.

The point is that while you and your organization are working hard, your assets and cash should not be off resting in the shade, but rather be working just as hard for you. Delegating to professional asset managers, who adhere to your policies and know your cash flow needs and structures, may help ensure that your assets help achieve your goals.


This material is for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expresses may change as subsequent conditions vary. The information herein is based on sources which Miles Capital believes to be reliable, but is not guaranteed to be accurate or complete.

Past performance is not a guarantee of future results. There is no guarantee that any forecasts made will come to pass. There is potential for profit or loss with any investment. Index performance is shown for illustrative purposes only — you cannot invest directly in an index. No part of this material may be reproduced in any form, or referred to in any publication without the express written permission of Miles Capital, Inc.