Treasury Management Internation Logo
Cash & Liquidity Management
Published 
Please note: this article is over 13 years old. If you feel this article is inaccurate or contains errors get in touch here . Many thanks, TMI

Rapid Returns in Receivables

by Helen Sanders, Editor

Those who remember the late 1980s and who also grew up in the United States (I can feel my audience diminishing as I write!) may remember Ken Hakuta, better known as ‘Dr Fad’, TV personality and inventor - for those who missed out, he’s featured on the old VHS ‘I Love the ‘80’s: 1983’. I bet you never expected to pick up that sort of trivia in a treasury publication. I haven’t seen it, in case you were wondering. Anyway, amongst (I’m sure) very many sensible comments made by ‘Mr Fad’, one struck me as actually being quite relevant:

“Lack of money is no obstacle. Lack of an idea is an obstacle.”

While I am not suggesting that we all send our banknotes fluttering from a top storey window (after all, many of us might feel that this is already the effect of much of the current economic uncertainty) there are significant ways in which treasurers can substantially improve their liquidity and working capital with rapid return on investment. The key is not just to throw more money and more resources at a problem, but to think creatively about addressing challenges. In doing so, treasurers can achieve a return on investment which contributes directly to the company’s bottom line. Focusing on receivables is a prime example of where treasurers can act creatively to enhance liquidity and add economic value to the company. The watchwords here are Centralisation, Optimisation, Leverage and Protection. But what does these mean in practice?