Understanding Cash Concentration Systems in Corporate Finance

In the realm of corporate finance, effective cash management is critical for a firm's operational success. Consider a manufacturing company that maintains its cash reserves and manages its working capital effectively. The company is evaluating various cash management techniques to optimize its liquidity. One of the strategies under consideration is the concept of a cash concentration system.

A cash concentration system can help in streamlining cash flows from various locations to ensure that the company has adequate liquidity to meet its short-term obligations. However, implementing such a system may involve costs and could affect the company's financial performance. Given this context, which of the following statements about cash concentration systems is true?