Matthew Hansen: 7 Experts on Activating Liquidity

Treasury plays different roles in different organizations, but many companies, particularly global organizations and those with complex funding requirements, have found value in making treasury a more strategic player in cash and liquidity management. In looking more closely at what treasury has to offer, it’s apparent that its value goes beyond just greater operational efficiencies.

 

 

“Efficiencies are gained and cost-saving opportunities arise when less human resource time is required . . . . With that, you get better liquidity management, improved cash forecasting, more accurate identification of currency risks, optimization of working capital and improved bank relationships.”

When you talk about active liquidity management, you’re talking about moving from operational treasury management to strategic treasury management. Moving to strategic treasury management has several benefits. Efficiencies are gained and cost-saving opportunities arise when less human resource time is required for the day-to-day blocking and tackling of treasury
operations. In this way, the treasury team spends more time on strategic initiatives, which enables it to take on more of a leadership role in the organization. With that, you get better liquidity management, improved cash forecasting, more accurate identification of currency risks, optimization of working capital and improved bank relationships.
A strategic treasury team can positively impact the weighted average cost of an organization’s capital, and that flows straight to the bottom line in the form of net profit on the income statement. In addition, treasury can optimize working capital and minimize the amount of debt outstanding at any given time. That, too, affects the bottom line, which drives stakeholder value and shareholder value within any publicly traded company.

This is an excerpt from 7 Experts on Activating Liquidity. The eBook was generously sponsored by Kyriba.