Treasury and Trade Solutions
10
HOW SMART CASH
MANAGEMENT COULD
SAVE YOUR BALANCE SHEET
More often than not, finding ways to improve a company’s balance sheet
requires looking at cash management operations through a different
set of lenses. Just as an eye care professional can offer remedies that
improve eyesight, cash management experts assist with cash flow and cash
management processes that can lead to stronger financial health.
Ebru Pakcan
Global Head of
Payments and
Receivables,
Treasury and Trade
Solutions,
Citi
Top cash management providers
deploy their own methodology for
analyzing treasury and financial
operations, and then deliver
intelligence on root causes of
various problems and prescriptions
for fixing them. Toward this end,
they conduct their examinations
through a number of lenses. One
of their most critical focal points is
an organization’s financial position,
where a thorough assessment
of financial pressures that drive
current-state decisions can help
shape strategies and priorities
going forward.
Perspectives on these pressures
are found in the company’s balance
sheet and income statement, which
represent its wealth and its health,
respectively. These statements
provide insights into financial drivers
that cascade through product
development, distribution, sales
cycles and market expansion. They
also house information that is critical
to unlocking solutions for improving
working capital management, in
addition to risks and controls.
Looking through the financial lens
Since financial statement
characteristics and drivers can
vary from industry to industry,
a company’s cash management
partner must ask the right questions
to understand business and
financial priorities. If, for example,
the company is a new entrant to
an industry or is deploying a new
product line under a new subsidiary,
it may be focusing on shortening
receivables and avoiding sales
reversals. A stronger, longer-term
player in the same industry may
be concentrating on its liquidity
position to support acquisition
activities. An enterprise with a wide
geographic sales footprint may want
to have an optimization play across
multiple balance sheets, and in turn,
may set up a re-invoicing or shared
