STS

MODULE 1: Ancient, Middle and Modern Technologies BRONZE AGE (3000 BC - 1200 BC)
in the World and in the Philippines

Ancient Age: Three-age system

► Three-age system- a system of classifying ancient ages into groups
based on
tool development stages.
1. Stone age (2.55 mya – 3000 BC) - is the period of weapons made of
stone,
wood, bone or some other materials aside from metals.
2. Bronze age (3000 BC – 1200 BC) – it started when tools and weapons
were
already widely made with copper or bronze. This was
achieved through metal extraction from ore (a person
Known as smelting) and melting and pouring it into mold
for shaping. Smelting was originally done with copper, a
soft metal.
3. Iron age (1500 BC – 450 AD) – this began when smelting pits made
sufficient
advancement to produce higher temperatures that could
smelt iron ore (Reardon, 2011)

MODULE 2: CASH TRANSFER METHODS
CHECK PAYMENTS
A check payment is made on a paper document, which has traditionally been
physically routed from the payer to the payee, to the payee ’ s bank, and then
back to the payer ’ s bank. The number of routings and the need for physical
handling of the check results in significant delays in the transfer of cash
between the principal parties.
The vast majority of checks are issued directly by companies. However, they
may also be issued directly by a bank, which is called a bank check or bank
draft. The bank check is a payment on behalf of the payer, which is
guaranteed by the bank (and therefore of value to the payee). The bank can
safely issue this guarantee because it immediately debits the payer’s account
for the amount of the check, and therefore has no risk. Not only is this a safe
transaction for the bank, it is also benefi cial to the bank, since the bank has
ownership of the funds from the time when it debits the payer’s account to
when the money is eventually paid to the payee (which could be several
weeks, depending on when the payer elects to send the check to the payee).
Mechanics of a Check Payment
Portland Cement Company creates a check to pay for a supplier invoice. It
immediately adjusts its own records to reflect the reduction in available cash.
However, its bank balance remains unchanged for several days because
several additional events must occur. First, there is a delay while the
payment is delivered through the postal service, which is the mail float.
Second, the supplier must deposit the check at its bank; the time from when
the supplier receives the check and deposits it is the processing float. The
duration of the processing float is driven by the recipient ’ s internal
processes, staff training, and the existence of any work backlog. Third, the
time between when the check is deposited and when it is available to the
recipient is an availability float. Availability float is generally no longer than
two days. The time between when the check is deposited and when it is
charged to the payer’s account is the presentation float. Thus, while the
check is clearing, Portland Cement retains ownership of the payment amount
at its bank.
The same process works in reverse when a company receives a payment
from a customer. In this instance, the company receives a payment and
records the receipt in its own records, but must wait multiple days before the
cash is credited to its bank account. This availability float works against the
company, because it does not immediately have use of the funds noted on
the check.
The combination of the floats associated with these inbound and outbound
check payments is the net float. The net float should be relatively neutral, but
a company can infl uence it with more aggressive working capital
management to accelerate inbound payments and delay outbound payments
(as described in Chapter 5 ).
The check process flow, with float periods included, is shown in Exhibit
2.1.
Investing Float-Related Funds
When a company has written a large volume of checks that have not yet
been cleared, the available cash balance shown by the company’s bank will
be larger than the company’s ledger balance. If the treasurer can reliably
predict how long it will take for the checks to clear, it is then possible to invest
some of the cash that is available due to uncleared checks.
If a company has signifi cant cash holdings, then it may be worthwhile to
spend time investing in float - related funds. However, maintaining an
abnormally small cash balance requires active float monitoring on a daily
basis. If there is a gap of even a single day in float monitoring, then the
company will very likely not have suffi cient funds for all presented checks,
and will incur expensive account overage fees.