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Treasuries Focused on Transformation

An IDC study shows why so many treasury organizations need transformational change, including rolling out a “unified liquidity management strategy.”

By T&R Staff | April 05, 2022 at 12:54 AM
Stock illustration: Focusing binoculars

Late last year, IDC surveyed more than 800 corporate finance leaders and found that improving liquidity management is among their top priorities. This isn’t a shocking result, of course. The onset of the Covid-19 pandemic required treasury and finance professionals to shift focus, on a dime, from managing the business’s long-term strategic initiatives to ensuring corporate accounts hold enough cash to fund basic operations.

Yet many companies remain hobbled in their ability to understand the full landscape of liquidity across their complex businesses around the world. In the IDC survey, only one in eight respondents said they have real-time visibility into more than 90 percent of their company’s cash. Worse, fewer than 20 percent of respondents can reliably forecast the organization’s liquidity beyond one month. And fewer than 5 percent can reliably forecast past three months.

These visibility limitations are impacting treasurers’, CFOs’, and executive teams’ ability to make quick decisions around the movement of money, funding of internal projects, or merger and acquisition (M&A) activity. That’s why the IDC report recommends that companies develop a “unified liquidity management strategy,” a companywide approach to cash management that incorporates feedback from top finance leaders and even line-of-business managers.

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