How can we efficiently manage cash and liquidity requirements?
Treasury is concerned with the management of cash and liquidity, financing, bank relationships and financial risks. To manage these areas effectively, Finance must have access to current market information and align this information with future business requirements to manage performance.
With the Treasury decision area, you can set planning goals and scorecarding metrics for performance management elements such as:
- Loan balance ($).
- Net cash flow ($).
- Borrowing cost (%).
- Investment yield and risk (% and #).
- Net liquidity ($).
- Shares issued and outstanding (#).
- Interest ($ and %).
- Dividend payments ($ and %).
- Options outstanding and paid up ($ and #).
You can analyze these goals and metrics by a number of dimensions to find the hidden gems in the data:
- Fiscal month / year.
- Balance sheet lines / class.
- Division / department.
Using the Treasury decision area
You set targets based on your goals and metrics in Treasury. You monitor your success by looking at how you measure up against your targets. Further, you look into your results to find out more about these elements driving performance management.
- Borrowing cost (%): What are the options for short-term borrowing and cash requirements?
- Net liquidity ($): Should surplus cash be placed in money markets or into a bank account? If so, at what rate of return and for how long?
- Dividend payments ($ and %): If we incurred a loss this year, should we continue paying dividends from previous years or suspend the dividend?
