Liquidity management

What is liquidity management?

Liquidity management is the discipline concerned with identifying, securing and protecting a company’s cash flow. It comprises the setting of liquidity targets, the monitoring of liquidity, the management of payment transactions, and the assessment and control of risks.

Liquidity management is an essential component of corporate financing and cash management. The main task of liquidity management is to protect the company from liquidity bottlenecks and to ensure that sufficient funds are always available to meet all payment obligations.

Effective liquidity management requires close cooperation between the finance, controlling and treasury departments.