No Need To Change Existing Systems,
Service Providers, Or Institutions
Liquidity Management
Financial Transaction Insights In Real-Time
Liquidity Management
Feature Overview
How The Liquidity Management Feature
Can Bring Value To Your Global Organization
The Liquidity Management capabilities of the Financial Intelligence Solution provide a robust framework for managing and improving an organization’s liquidity. A company can achieve significant savings and operational efficiencies by leveraging these features. The quantified benefits, expressed as percentage improvements, underscore the potential for enhanced financial stability and strategic flexibility through effective liquidity management. These tools empower a company to confidently navigate financial uncertainties, ensuring the resources needed to meet their obligations and seize growth opportunities.
Comprehensive Liquidity Analysis
Feature Description: Offers a detailed analysis of current liquidity positions, including cash on hand, marketable securities, and credit lines, supporting the calculation of liquidity ratios and other financial metrics to provide a clear picture of short-term financial health.
Business Benefits: Results in an approximate 10% increase in liquidity ratio optimization. This comprehensive analysis helps a company maintain a healthy balance between liquid assets and liabilities, ensuring sufficient coverage for short-term obligations and reducing reliance on external financing.
Automated Working Capital Management
Feature Description: Utilizes AI to optimize working capital components such as receivables, payables, and inventory. This feature identifies inefficiencies and suggests actionable strategies for improving working capital cycles.
Business Benefits: This can lead to an estimated 15% improvement in working capital efficiency. By optimizing the management of receivables, payables, and inventory, a company can free up cash tied in operations, enhancing liquidity without the need for additional borrowing.
Dynamic Cash Forecasting
Feature Description: Provides forward-looking cash flow projections based on a range of operational and market factors. This dynamic forecasting tool helps businesses anticipate future liquidity needs and plan accordingly.
Business Benefits: Leads to a potential 25% improvement in cash forecasting accuracy. Accurate cash forecasts enable more informed decision-making regarding investments, debt, and cash reserves, reducing the risk of liquidity shortfalls.
Stress Testing and Scenario Analysis
Feature Description: Allows a company to evaluate its liquidity under various hypothetical scenarios, including market downturns, sudden drops in revenue, or unexpected capital requirements. This helps identify potential liquidity risks before they materialize.
Business Benefits: Improves liquidity risk management by as much as 30%. Stress testing and scenario analysis prepare a company for adverse conditions, ensuring that it has adequate liquidity strategies to withstand financial shocks.
Credit Facility Management
Feature Description: Offers tools for managing and optimizing the use of credit facilities, including lines of credit and loans. This feature monitors terms, utilization rates, and costs associated with borrowed funds.
Business Benefits: This can result in a 5% reduction in borrowing costs. Effective management of credit facilities ensures that a company uses its borrowing options efficiently, minimizing interest expenses and avoiding unnecessary debt.
Cash Concentration and Pooling
Feature Description: Enables efficient cash management across different accounts and related companies, allowing for centralized control over cash positions. This feature supports the automatic pooling of surplus funds and the distribution of funds to cover any deficits.
Business Benefits: Achieves up to a 20% reduction in idle cash balances. Cash concentration and pooling enhance cash utilization across the organization, minimizing overdraft fees and maximizing interest income from surplus balances.
Liquidity Management
Unprecedented Liquidity Visibility
Intelligence Beyond Bank Accounts
Liquidity management encompasses the services banks provide to help their corporate customers optimize interest on their accounts. This process also enables corporations to pool funds from different accounts to better manage and optimize their daily cash positions by:
- Systemically gathering information for future deposits
- Generating alerts about each deposit’s impact on revenue, currency, reflective currency (base operating currency), and bank accounts
- All of this occurs outside of depository relationships in real-time
- Providing real-time cash/asset positions – feeding INSTANT insights about total bankable funds available
- Obtain unprecedented visibility on global liquidity incorporating all relevant factors – such as fees, taxes, currency, and reserves – all before any deposits appear in your bank accounts
Visibility on Real-Time Liquidity – Globally
INSTANT® automatically accounts for all receivables and formats these data – as each transaction (even cash) occurs – worldwide. As a result, you see previously “dark” information (i.e., unavailable). This new visibility provides unprecedented insight into all aspects of corporate-wide liquidity.
Logical Account Structure
Liquidity management is based on customer-defined account structures that reflect the hierarchical relationship of various accounts and the corporate strategies that determine account management and organization.
Liquidity management services are typically classified into one of two broad types:
- Sweeping: funds are moved within the account structure – e.g., among “parent” and “child” accounts
- Pooling: account balances are notionally consolidated, and “interest computations” are calculated on these notional balances
INSTANT’s liquidity management function supports a multi-branch, multi-currency structure, and it’s customized to integrate into the client’s current architecture of “System Accounts.” This structure enables the system to keep track of all balances, calculate interest on all accounts, and track the history of all “sweep/pool” components – all in real time.
INSTANT’s dynamic, comprehensive, and flexible approach provides a unique degree of instantaneous and actionable insight.
