Cash management

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

What is Cash management?

Cash management refers to the short term operational cash flow management, including the monitoring, the analysis and the optimisation of the cash flow of a company. 
The bank plays a key role during this operation, by transferring funds from one account to another to balance the cash flow. It requires transfers, foreign currency transactions, and possibly the use of derivatives (currency swaps). 

Example

A company X has several subsidiaries around the world, and each one has one or more bank accounts denominated in different currencies. Some of the accounts may be overdrawn, others may have cash surpluses. In order to optimise cash flow, the bank will use the accounts with cash surpluses to cover the overdraft ones. 
Another example would be cash pooling, which consist of pooling funds from different bank accounts into a single cash pool in order to better manage foreign currency flows and borrowing costs. 

  • If there is a cash surplus, the bank will invest this surplus in different products: loans, Treasury bills, commercial paper on behalf of the client.
  • If there is a cash shortfall, the bank will refinance the client under the best possible conditions. This refers to liquidity management. 

What is Liquidity management? 

Companies want to manage their liquidity as efficiently as possible, especially those that operate in several countries and therefore hold accounts with many different banks. Managing liquidity in this way can be particularly complex. 

Effective bank liquidity management relies on a centralised process to gain full visibility into the company's liquidity position. Liquidity management can be made more efficiently with the use of digital technologies and access to the sources of information about the corporate treasury departments.

What is Treasury management? 

Liquidity management is a complement to Treasury management, which can be understood as the overall strategic management in the long term, including the planning, organisation and control of the holding of funds, or working capital, of a company. 

The goal of these finance departments is to make the best use of funds and maintain liquidity to reduce the overall cost of obtaining funds and to mitigate operational and financial risks.

These activities therefore cover:

  • working capital management
  • currency management
  • financial risk management

In simple terms, it is the management of all financial affairs of the company such as fundraising from various sources, currency management, cash flow and various financing strategies and procedures.

Discover

Our Payments & Cash management Solutions

Our latest news and insights

From Crisis to Opportunity: Unlocking the Power of Supply Chain Finance in a Volatile World
Aurélien Viry, CEO of Societe Generale Factoring, and Gilbert Cordier, Head of Supply Chain Finance, Societe Generale...
Expert views
Aurélien Viry, CEO of Societe Generale Factoring, and Gilbert Cordier, Head of Supply Chain Finance, Societe Generale Factoring, consider the effect of recent world events on the uptake and distribution of supply chain finance and find that, more than ever, it can be a win-win solution for buyers and suppliers alike.
From Crisis to Opportunity: Unlocking the Power of Supply Chain Finance in a Volatile World
Modular Construction: Transforming the Construction Industry
by our experts Laurent Chabot, Co-Head of Infrastructure Finance, Paris, and Jean Charles Jarry, Director -...
Expert views
by our experts Laurent Chabot, Co-Head of Infrastructure Finance, Paris, and Jean Charles Jarry, Director - Infrastructure Finance, London, at Societe Generale
Modular Construction: Transforming the Construction Industry
Real-time treasury: Unlocking the future of Cash and Liquidity Management
In today’s fast-paced financial landscape, the evolution of real-time technologies is reshaping the way treasurers...
Expert views
In today’s fast-paced financial landscape, the evolution of real-time technologies is reshaping the way treasurers manage cash and liquidity. With ‘always-on’ data flows and advanced analytics powered by artificial intelligence (AI), treasury functions are becoming more dynamic, predictive, and autonomous. But while the promise of real-time treasury is...
Real-time treasury: Unlocking the future of Cash and Liquidity Management
More results google link