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The Liquidity Crisis – Extending Treasury’s Reach September 13, 2009
“ Never let a good crisis go to waste.”
The liquidity crisis has put cash and liquidity management at the top of senior management’s agenda and thereby presented the opportunity to increase the presence of Treasury within our organizations.  We can now effect permanent changes in the way we do business by encouraging our operating and financial colleagues to think about the liquidity implications of the decisions they make.
More businesses fail due to cash flow issues than to lack of profits.
We all know that cash is king; what’s changed is the amount of attention cash is getting within most organizations.  So, no time has been better for pursuing Treasury’s agenda within one’s organization.
That which is measured (and reported up) is managed.
Most Companies Need To Improve Cash Forecasting ,[object Object],[object Object]
Most Companies Need To Improve Cash Forecasting (Cont’d.) ,[object Object],[object Object]
Make Periodic Reporting SOP ,[object Object],[object Object],[object Object]
Improve Cash Forecasts ,[object Object],[object Object]
Improve Cash Forecasts (Cont’d.) ,[object Object],[object Object]
Collaborate With Business Units ,[object Object],[object Object],[object Object],[object Object]
. . . Money Compensates, but Recognition Motivates Most people like to be recognized for their achievements and will want to be on your short list of those who are doing a good job.
Separate Operating & Excess Cash ,[object Object],[object Object],[object Object]
Engage in Dialogue on Excess Cash ,[object Object],[object Object]
Unlock Working Capital From Within Your Business ,[object Object],[object Object]
Optimize Dating Programs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Optimize Dating Programs (Cont’d.) ,[object Object],[object Object],[object Object],[object Object],[object Object]
Strengthen Collection Efforts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Maximize Cash Inflow
Result Is Reduced Cash Draw 09/09 09/08 09/07 09/06 04/09 04/08 04/07 04/06
Enhance Collection Efforts Through Automation ,[object Object],[object Object],[object Object],[object Object]
Ensure A/P Practices Still Valid ,[object Object],[object Object]
People do what you  pay  them to do… … not what you  tell  them to do.
But, we  told  them to manage inventory levels… 49% over budget Annual bonus  measured back orders and out-of-stocks Annual bonus measured inventories Inventory Levels
Bonus Plans Must Hold Mgmt Accountable for Working Capital ,[object Object],[object Object],[object Object]
That which can be RFP’d… … should be RFP’d, even if you’re satisfied with your current service provider.
Don’t Overlook Opportunities to Reduce Credit Card Related Fees ,[object Object],[object Object],[object Object],[object Object]
Treasury Unlocks the Key to Savings ,[object Object],[object Object],[object Object],[object Object]
Operating Personnel May Not Look Below The Line So, you’re not going to charge me any bank fees if I leave all my excess cash in your bank???
Operating Personnel Think Even Less About Taxes Than Interest ,[object Object],[object Object]
Ensure Compliance With New Contract Manufacturing Regulations ,[object Object],[object Object],[object Object]
Operating Efficiencies Can Be at Odds With Tax Planning Initiatives ,[object Object],[object Object]

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Extending Treasurys Reach V.Li

  • 1. The Liquidity Crisis – Extending Treasury’s Reach September 13, 2009
  • 2. “ Never let a good crisis go to waste.”
  • 3. The liquidity crisis has put cash and liquidity management at the top of senior management’s agenda and thereby presented the opportunity to increase the presence of Treasury within our organizations. We can now effect permanent changes in the way we do business by encouraging our operating and financial colleagues to think about the liquidity implications of the decisions they make.
  • 4. More businesses fail due to cash flow issues than to lack of profits.
  • 5. We all know that cash is king; what’s changed is the amount of attention cash is getting within most organizations. So, no time has been better for pursuing Treasury’s agenda within one’s organization.
  • 6. That which is measured (and reported up) is managed.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13. . . . Money Compensates, but Recognition Motivates Most people like to be recognized for their achievements and will want to be on your short list of those who are doing a good job.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 21. Result Is Reduced Cash Draw 09/09 09/08 09/07 09/06 04/09 04/08 04/07 04/06
  • 22.
  • 23.
  • 24. People do what you pay them to do… … not what you tell them to do.
  • 25. But, we told them to manage inventory levels… 49% over budget Annual bonus measured back orders and out-of-stocks Annual bonus measured inventories Inventory Levels
  • 26.
  • 27. That which can be RFP’d… … should be RFP’d, even if you’re satisfied with your current service provider.
  • 28.
  • 29.
  • 30. Operating Personnel May Not Look Below The Line So, you’re not going to charge me any bank fees if I leave all my excess cash in your bank???
  • 31.
  • 32.
  • 33.