Improve your liquidity and cash flow forecasting
Liquidity management is one of the core roles of the treasury and maintaining the right level of liquidity to guard against risks is of key importance. Your liquidity needs are affected by many factors both internal and external, some of which lie outside your control and some of which are extremely subjective and difficult to forecast. Liquidity, after all, is not an exact science.
The level of liquidity held varies hugely, even between companies in similar industries and similar market positions, while due to complex account structures, a “safety net” of cash holdings may be inaccessible when most needed. Effective liquidity management requires an account structure that facilitates fast decisions and simplifies transfers between your accounts. At Nordea, we make this a reality.
Simplification and optimisation of your cross-border, multi-bank bank account structure can hold many advantages for you – from increased internal administrative efficiency to a reduction in external financing needs and improvements in cash visibility.
We know from our experience that corporate customers deal with varying levels of bank account complexity, specific local and global market needs and individual industry and company requirements. This experience allows us to bring our best practices to your cash management account set up.
Expertise combined with the right solutions
With our experience in this area, we can partner with you to develop a strategy to optimise your liquidity and give you more visibility and control over your cash forecasting. Our expert advice, combined with tools such as Global Cash Pool and cash forecasting solutions provided together with leading industry partners, mean you benefit from real-time reporting and constant visibility of your global cash position – and the know-how of the Nordic’s largest financial institution.
How Nordea can help you meet your liquidity and cash forecasting goals
To meet your specific needs, we can offer you different solutions to best optimise your liquidity based on your internal structures, business volumes, industry requirements, legal framework and other external factors.
At Nordea we have been using a proven methodology for evaluating a company’s liquidity requirements for more than six years. It requires little more than publicly available metrics from annual and quarterly reports, and your own understanding of your business’s position. We recommend that organisations should make regular evaluations of liquidity risk part of their treasury policies and put in the context of major strategic events that may be coming up, for example mergers and acquisitions.
In terms of gaining control and better visibility, one of our most effective solutions for instance, is a master account with underlying sub-accounts for subsidiaries and various departments. All funds run through the sub-accounts are reflected in the master account. This solution minimises the need for credit facilities and provides better opportunities for placing excess liquidity in the money market. You can get interest benefits when accounts and pools in different countries and currencies are concentrated in Nordea. If you’d like to find out more about how Nordea can help your liquidity management, get in touch with us or speak to your cash management adviser.
Watch how Nordea helped Ramboll take control of their liquidity
Do you regularly move funds cross border between own accounts? Sweeping Services is a cash pooling service for the concentration of bank account balances belonging to a company or a group of companies. For this purpose use the above automated funds transfers product.
On an agreed, regular basis the balance of the sweep account is automatically swept to the concentration account. In the case of a negative balance, funds can automatically be topped from the concentration account to the sweep account.
Some benefits of sweeping services include the concentration of your group´s cash balances, improved net interest, reduction in your need for external financing and facilitatation of administration.
Up-to-date information for better decisions
An essential element in effective cash management is the availability of relevant and timely information. You need to monitor the payment process and know exactly where your liquidity is at any time.
Cash management becomes easier if you have more accurate and timely information. User-friendliness, real-time reports and the possibility of reconciling your bank accounts are key factors for successful liquidity management.
Nordea is at the forefront of electronic banking. Our electronic banking systems are designed for local needs, yet also provide tools for managing accounts across borders. A parent company or a treasury centre can manage liquidity and obtain information from any Nordea unit.
If your company wants to establish a shared service centre or another administrative structure, we can supply you with the necessary systems and support. We aim for a seamless look and feel which will facilitate decision-making and streamline operations.
Balance and transaction reports
The balance and transaction reports service gives you an opportunity to centrally control the balances of your various accounts, optimise your liquidity management and reconcile incoming and outgoing transactions.
- Efficient control of balances of all accounts
- Efficient control of transactions
- Real-time information
- Updated balances
- Information is presented in your electronic banking system
- Available from accounts with other banks
Zero Balancing is a cash pooling service for the concentration of funds within a company, or a group of companies, into one account - the top account.
The balances of the sub-accounts are transferred to the top account at the end of each business day with original value days. The top account will therefore hold the overall net cash position of the company or group of companies
The top account is normally held by the parent company or a group treasury company. Any number of sub-accounts can be linked to the top account.
Sub-accounts are used for normal cash management transactions and are actual bank accounts.
- Improves your net interest
- Reduces your need for external financing
- Reduces your group's balance sheet
- Gives you access to the group's net liquidity
- Facilitates your administration
- Provides data on inter-company lending
Trezone® is a business-to-treasury (B2T) solution which eliminates the need for manual reporting and consolidation of treasury-related information. The solution is web-based, modular and remarkably easy to implement. Features include cash flow forecasting, dealing, hedging, netting and guarantee management.
Read more on our Trezone® page.