Cash Management Supplement September 2009
Mutual lessons in liquidity
Since the rest of the company finally caught up with the treasury department on understanding the importance of controlling the cash to keeping the business going, treasurers have been assailed with all sorts of advice on how they should maintain and improve liquidity management.
Treasurers need to resist any degree of weariness over the issue of cash. As this issue of The Treasurer Cash Management Supplement illustrates, a wide range of strategic issues must still be addressed to ensure liquidity management is in the best possible shape. Banks are certainly keen to help treasurers improve corporate liquidity management, both in the short term dealing with recession, and looking further ahead when the economic situation is improving.
Treasurers should not be afraid to initiate a two-way discussion. There are elements of liquidity management, such as speed of payment, where more could be achieved, and banks have a key role to play. And many corporate cash management systems that treasurers oversee have passed the test set for them by recent difficult events. Liquidity management is a vital issue both for the corporate sector and for the financial sector, and there is plenty of evidence to suggest that both sides could continue to learn from each other.