Cash is oxygen for a business, but in volatile markets, simply holding cash isn't enough. Treasury management is about optimizing the liquidity you have to ensure it's available when needed, while also working hard enough to offset inflation.
Recent currency fluctuations and interest rate hikes have caught many treasurers off guard. The strategy of 'just leave it in the current account' is no longer viable. Active management of working capital cycles-speeding up receivables and strategically managing payables-is the first line of defense.
Furthermore, parking surplus cash in the right instruments requires a deep understanding of the yield curve. Short-term treasury bills or liquid funds often offer better risk-adjusted returns than traditional fixed deposits in a rising rate environment.
At Numeriq, we help clients build a 'liquidity ladder' that matches investment maturities with projected cash outflows. This ensures that the business is never forced to liquidate assets at a loss to fund operations.