The right tools for liquidity planning

In the last 20 years, the Trinity Team has spoken with many treasurers and CFO’s about liquidity planning and the use of different scenarios. We noted that most of them have only one forecast. A few treasurers develop three scenarios (a best-, base and worst case scenario). We believe the current crisis taught us that these three scenarios might not be sufficient; scenario planning should be broadened to really stress-test your company’s future. The question of course is: how to do this in an efficient way (or what tools do you need?) The added value of corporate treasury is to manage risk and liquidity planning under all circumstances. We all know that people aren’t really interested in cash flow planning when conditions are easy and profitable. Before the lockdown-period started, liquidity planning was probably easy, compared to the current dynamic environment we find ourselves in. The fact that people are now working remotely complicates the matter even more, if the right tools aren’t used. But what are the key characteristics of the ‘right‘ tools for liquidity planning?

Multiple planning structures

First of all, you need a planning structure. This can be a simple one or a structure with more rows (to capture more cash flow categories). It all depends on the type of company. A requirement for a right tool is that it can handle several structures in parallel.  
Fig 1: An example of a simple planning structure

Web-based, multi-currency, flexibel time buckets

The tool should allow the web-based entry of data by colleagues around the world. To capture the FX risk, the data should be uploaded in their original currency. The system should further allow the data to be grouped in days/ weeks/ months/ quarters/ years.

Interface with ERP/ Excel/ CSV/ manual

Next to the above it is important that data, which are already available in other systems, should not be keyed-in twice. Therefore interfaces with ERP/ Excel/ CSV should be supported next to the manual uploading of data. It goes without saying that the flows originating from treasury transactions are automatically included.

Multiple scenarios / comparison of scenarios

The system should be able to capture various scenarios (e.g. best case, total crisis, forecast June, Actual). The only way to check the consistency of a forecast scenario is to compare it with the previous, the actual etc. The Trinity Treasury Management System can be set up fast and is easy to work with. It can help CFOs, treasurers and controllers around the world to develop a set of liquidity scenarios for futures that could be applicable in their industry.


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