Since the beginning of the economic crisis, liquidity has taken on an importance that outweighs earnings or growth. Consequently, treasurers have increased their focus on optimizing working capital and enhancing liquidity that has been trapped within their cash conversion cycles. Accordingly, the corporate perception of liquidity and risk has been revamped and treasurers are now seeking more diversity for their short-term cash flow.
As access to capital markets has dried up and bank financing becomes scarce and expensive, many treasurers have turned to self-financing to reduce their reliance on external funding. This requires treasurers to more actively manage working capital through vendor and supply chain financing, liquidity management solutions, improved cash flow forecasting and refinancing. The primary objectives for enhancing these areas is to improve process efficiency and reduce the risk of error and fraud. Therefore, optimizing operational and financial efficiency are among the primary objectives for corporate treasurers as any enhancement within these areas is likely to result in both financial advantage and process efficiency, and also mitigate the risk of error and fraud.
To be successful, treasurers must get key financial players and business partners onboard. Establishing a partnership with internal business units and adopting a single banking relationship will establish better banking communications improving terms and visibility over cash, payments, collections and daily cash management.
Once the internal cash gap has been diminished through better use of financial resources, the right banking partner will be able to streamline the sweep process and provide more secure, diversified and liquid investment vehicles for a company’s short-term cash flow
As access to capital markets has dried up and bank financing becomes scarce and expensive, many treasurers have turned to self-financing to reduce their reliance on external funding. This requires treasurers to more actively manage working capital through vendor and supply chain financing, liquidity management solutions, improved cash flow forecasting and refinancing. The primary objectives for enhancing these areas is to improve process efficiency and reduce the risk of error and fraud. Therefore, optimizing operational and financial efficiency are among the primary objectives for corporate treasurers as any enhancement within these areas is likely to result in both financial advantage and process efficiency, and also mitigate the risk of error and fraud.
To be successful, treasurers must get key financial players and business partners onboard. Establishing a partnership with internal business units and adopting a single banking relationship will establish better banking communications improving terms and visibility over cash, payments, collections and daily cash management.
Once the internal cash gap has been diminished through better use of financial resources, the right banking partner will be able to streamline the sweep process and provide more secure, diversified and liquid investment vehicles for a company’s short-term cash flow
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