What is cash and liquidity management?

Cash and liquidity management entails a multitude of tasks, including cash positioning, cash forecasting and reconciliation, in-house banking, generating journal entries for bank transactions, posting transactions to the general ledger and reconciling bank transactions to accounting entries. All of these tasks are necessary to gain clear visibility into an organisation’s cash, visibility that is needed to support critical financial decisions and strategic business objectives.

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Optimising Cash

Visibility into an organisation’s cash position, including location, currency and liquidity position is vital. With a timely and accurate picture of global cash across all banks in differing regions, treasury can create more accurate forecasts that deliver confidence. This can be achieved by leveraging market-leading technology.

To properly manage cash and liquidity, organisations need to leverage a technology that provides:

•  Cash positioning
•  Cash forecasting and reconciliation
•  In-house banking
•  Journal entry generation for bank transactions
•  Posting of transactions to the general ledger
•  Reconciliation of bank transactions to accounting entries

Cash Management and Forecasting

With technology, automated preparation and reconciliation of an organisation’s daily cash position allows treasury to start each day with a cash position worksheet to visualise cash positions through a combination of bank balances and transactions with expected workflows. Access to this information at the start of the day means that treasury has more time to build and analyse global cash forecasts. And the continued use of technology allows organisations to compare forecasts to actuals for any horizon to help improve forecast accuracy.

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