Balancing risk and return on cash

More than ever, many organizations are facing numerous headwinds and liquidity management and runway management will mean the difference between organizations that survive vs those who prosper.

For many mid-sized organizations, the issues are:

Primary Focus:- Ensuring basic cash flow visibility and avoiding shortfalls is more urgent than fine-tuning idle cash.  

   - Limited Excess Cash: Many mid-sized firms operate with tighter liquidity, so "optimizing" small balances has minimal ROI.  

   - Cost vs. Benefit: Tools for advanced cash pooling, sweeping, or yield optimization often require bank fees, treasury expertise, or system costs that outweigh gains.  

   - Manual Processes: Many still rely on spreadsheets and simple banking—optimization is a "nice-to-have" after solving basics like forecasting.

Into this basket of priorities, do not forget risk diversification will be one the key issues. Because institutions too have their challenges.

All organizations need to have a balance of objectives and practical considerations in assessing risk and return on cash and