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Optimize your liquidity and increase your flexibility with cash management

Portrait of Matthias Holzamer
Partner
Frankfurt Office, Central Europe
+49 69 29924-6401
May 21, 2019

How companies in every phase of the business cycle can profit

Companies must prepare for periods of economic stagnation. The boom of the last decade is coming to an end – a recession could be looming. Corporations need to have liquidity and they need to manage it actively in order to be prepared for macroeconomic changes. Modern cash management techniques with a foundation in big data and artificial intelligence allow companies to optimize their cash flows and be agile in their response to changes no matter which phase of the business cycle they are in.

Cash management brings stability through liquidity

Forecasts of an economic downturn, the pressure of digitalization and the political tensions unleashed by trade wars are hitting export figures in the German economy. After years of operating in a booming economy, German companies are now facing major challenges. Added to that, technology disruption from new innovations is changing markets permanently. Companies that fail to adapt their strategies face a rude awakening.

Steps need to be taken if companies want to be agile and flexible enough to react to changes as they occur. Businesses need to create liquidity and they need to optimize it. Active liquidity management will be the only way to meet the future need for substantial investments that will come from the pressure to digitalize and the prevailing conditions across the economy as a whole. Roland Berger combines traditional and digital cash management strategies into an integrated method to release internal liquidity reserves. The leading-edge digital cash management tools are grounded in big data, automation and artificial intelligence.

Flexibility in uncertain times: Tools for companies in any scenario

Any company can benefit from modern cash management solutions. Cash management by Roland Berger is a combination of various tools from the realms of working capital, supply chain and treasury, areas which are all ripe for optimization. Companies whose business is performing normally can particularly benefit from cost optimization through digitalization and process automation on the basis of artificial intelligence. Using big data analytics to automate processes ensures that a business can operate more efficiently long term. Roland Berger's digital toolbox features groundbreaking methods such as dynamic discounting, treasury analytics, process mining and supply chain finance.

Even companies dealing with a challenging strategic crisis can benefit significantly from optimizing their working capital. Smart A/P and A/R management actively controls the flow of incoming and outgoing payments. Shortening the payment periods for accounts receivable or standardizing payment terms will create liquidity in the medium term.

The right cash management tools for companies facing a profit crisis are medium to short term in nature. The urgent need for liquidity necessitates more drastic action, such as selling inventories or reining in costs. Factoring can also have a major effect on liquidity.

In order to avoid insolvency, companies already in a liquidity crisis need to take radical countermeasures. Postponing or freezing orders and bundling investments within CAPEX initiatives are ways to create liquidity fast. With a combination of traditional cash management solutions and groundbreaking digital tools, Roland Berger is able to offer targeted, demand-driven cash management techniques.

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Optimize your liquidity and increase your flexibility with cash management

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Cash management based on AI and automation creates liquidity and enables active cash flow management.

Published May 2019. Available in
Further reading
Portrait of Matthias Holzamer
Partner
Frankfurt Office, Central Europe
+49 69 29924-6401