Liquidity risk is the risk that financial commitments can’t be paid on their due dates. Managing liquidity risk requires forecasting cash flows; ensuring there are sufficient funds and/or financing facilities available to meet cash flow deficits; timing payments to coincide with receipts where possible; and maintaining an adequate surplus of liquid assets and/or committed financing facilities to cater for a liquidity crisis.

But problems happen – forecasts are inaccurate; covenants are breached resulting in the withdrawal of committed facilities, crises occur (forecast revenues can evaporate and/or forecast expenses can “blow out”), liquid assets cannot be liquefied as required. Corporate Treasurer’s maintain a liquidity buffer to allow for inaccurate forecasting and liquidity crises.

We assist clients through:

• Developing, reviewing and refining liquidity policies, buffers and procedures
• Developing and refining comprehensive cash flow forecasting models that consolidate multi-site and multi-currency forecasts
• Identifying and utilising “lazy cash”
• Developing and reviewing strategies to manage working capital, available cash and borrowing needs