Liquidity planning - what is it about?

Without sufficient liquidity, everything is nothing. Insolvency endangers the continued existence of a company and thus the jobs of all employees. Insolvency occurs when a company is unable to pay its mandatory due liabilities. To avoid this scenario, the company's liquidity has to be managed permanently.

Every day anew: cash management and forecast

To optimally manage liquidity, it is therefore important to know which funds are available at which point in time.

These funds can be immediately available, but may also exist

• in the form of loans with various maturities and
• in different currencies or
• committed as deposits, investments or collateral

and thus be present but not available without limitation.

The starting point of cash management is the ongoing determination of available liquidity, which consists of account balances, available assets and credit lines. From day to day, one looks at the daily financial status and the cash forecast for the coming days. In the medium to long term, liquidity planning is used.

So that you don't lose the overview, the Trinity TMS Treasury Management System helps you to keep an eye on all of your company's cash flows and financial transactions.

Trinity offers a web-based and thus globally usable software solution for planning and controlling liquidity. The modular treasury management system takes into account payment flows from financial transactions as well as operative cash flows.

To manage the company’s financial deals, the resulting cash flows and for effective risk management, the system offers a variety of modules:

• Cash management
  for short-term account-based preview and disposition
• Currency-differentiated liquidity planning
  for medium- to long-term planning in categories
• Contract management
  for the administration of financing and investments on the money and capital markets
• Foreign exchange management
  for the administration and valuation of fx hedging instruments
• Interest rate derivative management
  for the recording of interest rate hedging instruments
• Commodities Management
  to reflect cash flows deriving from acitivites to hedge commodity risks
• Monitoring of limits and credit lines
• Digital guarantee management
  to keep an overview of sureties and guarantees
• In-house bank
  as a cost-effective alternative to local banks
• Multilateral netting
  to offset intercompany receivables and liabilities
• Payments management
  for the secure processing of account transfers and treasury payments via standing settlement instructions
• Account assignment
  for automatic posting of account transactions in the ERP
• An integrated reporting system
  for evaluations, simulations and dashboards

Thanks to the complete integration of all modules with each other, the cash flows from all financial transactions are immediately visible for liquidity planning. Enriched with additional planning data, which is automatically imported from various sources in the background, a reliable database is created for controlling and securing the company's liquidity.

For efficient daily account planning, the Trinity TMS cash management module determines clearing proposals based on predefined rules. Time-consuming routine tasks such as importing and updating plan data, reconciling bank statement positions, etc. are replaced by automated processes, leaving the cash, treasury and risk manager more time for the essentials.

The administration of financial deals takes place in treasury management, which usually also includes risk management for the assessment of losses due to the volatility of foreign exchange rates, commodity prices and interest rates and even default risks to a greater or lesser extent.

The inclusion of current foreign exchange rates, interest rates and other risk factors provided by market data providers helps to assess the risks in the decision-making process for optimal liquidity planning. Currency-differentiated liquidity planning in Trinity TMS then provides the necessary overview for global exposure management. At the same time, the market data provides the valuation basis for the automated booking of the financial cash flows in the ERP.

For the evaluation of financial data, Trinity provides a meaningful reporting system, flexible pivot analyses and connection options to business intelligence tools. Links to internet trading and confirmation matching systems, electronic banking solutions and different ERP for the transfer of planning data as well as the generation of instructions for the fully automatic posting of financial cash flows make work immensely easier.