Cash & Liquidity Management

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From Cash Management to Cash Flow Management In this interview, Arne Borkowski discusses client advisory services, and how the right advisory services can support treasurers’ cash flow management objectives.

From Cash Management to Cash Flow Management 

An interview with Arne Borkowski, Regional Head International, Cash Management & International Business, Commerzbank AG

How would you characterise advisory services available from banks today?

While banks have been developing their client advisory services over recent years, this is still predominantly ‘silo’ based, covering specific areas, such as cash management or electronic banking. This approach has some benefit in that it helps clients to optimise a particular aspect of their treasury activities; however, it ignores the wider spectrum of interconnected functions for which treasurers are responsible. Risk management, cash and liquidity management, financial supply chain management, funding and capital structure are all essential priorities of today’s treasury, so advisory services need to recognise these diverse but closely related issues.

What progress has been made towards this holistic approach to client advisory services so far?

Some banks have recognised that their advisory services, and indeed solutions, need to cut across functional silos. However, while this may be a strategic objective, few if any have yet progressed substantially towards delivery of a comprehensive, cross-disciplinary advisory service. The first step for some has been to break down the various elements that contribute to cash management, such as trade, export finance etc. but there is still a long way to go.

What demand for advisory services are you seeing from your customers?

The cash and risk management requirements of multinational corporates today are highly complex, with a wide diversity of countries, currencies, cash flow and interest rate structures to consider. While many treasurers recognise the value of advisory services to manage this complexity, they are often not aware that these services are available from their bank, and therefore they seek support from consultancies. However, this leads to a disconnect between the advice that a company receives and the solutions that they may ultimately implement with their bank. In reality, so long as a bank is able to provide the necessary expertise and inspiration, it is better to seek both advisory services and banking solutions from the same partner to ensure that project outcomes are aligned with objectives.

How can the right advisory services support treasurers’ cash flow management objectives?

While the flow of cash is an important driver within the business, so too is the flow of information. The recent focus we have seen on financial supply chain management, which takes an integrated approach to financial processes from customer collection through to supplier payment, reflects a developing awareness of the interdependency between movements of information and cash. By considering all of a company’s financial management requirements, the right processes, solutions and technology can be put in place that address challenges, maximise cash flow and enable capital structure to be enhanced.

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