How to achieve Deposit optimization

Achieve deposit optimization by bridging the gap

What happens to cash in mid-sized firms with small finance teams?

There seems to be a chasm between all the planning and forecasting taking place, and the reality of what happens when all the scenarios and tools result in actually having cash in the bank. Cash is often left in low interest bank accounts and companies do not actively know how to achieve deposit optimization,

There are KPI’s and formalized processes for almost all other financial aspects but no KPI’s for how to make cash work for the firm. Surely an omission? Is this the responsibility of the Financial controller/CFO and what would/should the KPI look like.

There is no escaping-Cash, treasury and the modern CFO It's been said that many CFO's/Controllers/FPA don't want to touch treasury with a barge pole, too much risk and no reward". The sad news is that Cash Management is a key part of the role and Treasury is also very much about cash management and optimization.  According to a survey of leading companies by PWC, cash and liquidity consistently appears as the no 2 priority for CFO's and no 1 for Treasurers. So whichever we look, cash, treasury and the modern CFO is intrinsically connected

What is cash optimization and does it matter? Traditional cash management activities include consolidating the information from various systems to identify cash flows from Account Receivable, Accounts Payable, Capex, Opex and measured against current liquidity with cash at bank or available facilities.

But too often, the process ends with cash in bank. And this is where the magic should happen. With full automation, astute organizations can enhance yield on available cash, automate processes, meet compliance and equally important, have an ability to expand banking relationships to deliver on diversification and risk management.

What are the typical questions a CFO/Treasurer/Director should be asking?

• Where should we invest our cash?

• Which bank is paying the best interest?

• What is the credit rating of the banks we deal with?

• How much should we invest per bank?

• How long should we invest our funds for?

• Can we have access to our funds?

• What is the difference between bank deposits and money market funds?

• What happens when the investment matures?

• What is cash optimization and does it matter?

Likwidity bridging the cash management gap and will automate ALL of the above processes quickly and efficiently, except any settlements or transfer of cash funds. Automated cash optimization. Likwidity is a straight forward and easy to setup and operated tool that does away with the need for complex and expensive TMS implementations.

Our dashboard will show:

• How much additional interest earned vs other rates

• Funds allocated by bank to reflect diversification

• Funds by credit rating to illustrate risk diversification

• Funds maturity profile to show when funds are available

• Limit utilization by bank to show adherence to limit policies In addition, organizations will also get:

• Notification of rates offered by each bank

• Automated interest calculations

• Automated notifications of maturing deposits with option to roll over or withdraw funds

• Detailed audit trail of all transactions

• Ability to advise banks of early withdrawals

• Ability to request banks to re-price (improve) on quoted rates

Our role:

1. Likwidity is NOT a broker and is a pure software tool charged on a fixed monthly fee. So no hidden commissions or rebates and client gets the full quoted rate by their bank.

2. Likwidity does not interpose between client and bank. We are a software tool, and organizations retain full control and engagement with their own bank and relationship managers. We aim to be invisible.

3. Likwidity does not receive or have access to organization cash funds or bank accounts.

4. Think of us as a plug-in between the accounting/ERP/Treasury systems