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Cash & Liquidity Management
Published  15 MIN READ
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Have You Caught the Cash Management Bug?

by Helen Sanders, Editor

One of my favourite ‘snippets’ in the Sunday newspapers is the list of fashions ‘going up’ and those ‘going down’. Sadly, I’ve never heard of most of the designers, celebrities and gadgets that are featured on either list, but it makes me feel like I have a finger on some sort of pulse. In a briefly idle moment, I wondered what these lists would look like in the treasury sphere. ‘Going up’, we have working capital optimisation, cash flow forecasting (although this has always been there) and mobile solutions for payments and collections. ‘Going down’ we have decentralised cash management, long alcohol-soaked lunches with banks (never experienced by younger treasury professionals), and spreadsheets (we hope).

Cash management has been steadily climbing the list of priorities in recent years for banks and corporate treasurers alike. No longer is transaction services, of which cash management is a major element, the drab sister to its more glamorous corporate finance or investment siblings. For banks, cash management represents a reliable revenue stream that is less impacted by market volatility than other areas of activity and a vital opportunity to secure long term relationships with corporate customers. For corporates, efficient, reliable cash management is essential to the running of the business, and key drivers of working capital. It is also valuable ancillary business to build secure relationships with financing banks.

A competitive offering

It would be quite wrong, however, to think that cash management is simply an ‘add on’ to a financing relationship; in fact, the need for banks to be highly competitive in their cash management offerings has never been greater: