Being able to understand, digest and act upon capital needs is crucial for building a well-deﬁned capital management plan. Greater transparency can allow you to automate banking structures, which in turn helps you leverage solutions that take global visibility to the next level. A recent survey showed that 40% of corporations want to streamline banking partners and accounts, which can be challenging to execute.1 There are three key steps that you can take to simplify the process and get started.
Increase visibility into your cash management
Today’s dynamic market environment means companies face volatile interest rates, inﬂationary pressures and rising borrowing costs. Now more than ever, treasurers need to have a holistic view of global cash positions to make informed, real-time decisions.
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1. Evaluate your current position
A methodical approach is crucial to ensuring a successful transition. Evaluate your current legal entities, account structures and banking relationships to diﬀerentiate what’s essential and what can be rationalized/streamlined to better ﬁt your needs. For example, if your banking relationships and services are widely spread but your day-to-day treasury needs require an integrated suite of tools, you’re likely missing out on the eﬃciency that rationalization provides. Additionally, if your accounts for diﬀerent entities are scattered, it can be diﬃcult to ﬁnd your consolidated real-time cash position, creating a barrier to full visibility.
2. Rationalize account structures and banking partners
Once you have a deep understanding of your current arrangements, you’ll have a clearer picture of how to rationalize. Depending on your position, your ideal banking structure may be a single banking provider or a small group of ﬁnancial institutions. Because many liquidity solutions oﬀered by major banks require full connectivity across accounts, you’ll be able to capitalize on your banking partners’ full capabilities once the rationalization is executed.
3. Access connected solutions
Solutions that work together can help automate and streamline treasury functions and provide eﬃcient access to working capital and excess liquidity. In addition to reporting and forecasting capabilities, innovative tools such as AI and machine learning will enhance your understanding of what cash is available and where it’s held.
Tools to automate and centralize liquidity
- Physical cash concentration:
- Centralizes funds to make cash management more eﬃcient. Oﬀers control and visibility to handle complex cash ﬂow challenges via a single digital platform.
- Cross-currency/cross-border sweeps:
- Provide the ability to sweep funds between two accounts in diﬀerent currencies. A selection of major currencies is available with same- or next-day options, subject to local currency cutoﬀ times.
- Move liquidity globally across regions to obtain a consolidated global position on a same-day basis, with same-day value.
- Multibank sweeps:
- Aggregate providers and balances across accounts via a single automated sweep.
- Allow seamless connection to any account within our global franchise or with your other banking partners.
Reporting tools for next-level visibility
- Multibank reporting:
- Helps minimize time and effort spent accessing multiple bank systems.
- Locates transactions quickly across primary and third-party bank accounts.
- Cash forecasting
- Provides accurate, real-time cash visibility, which is essential due to rapidly changing economic conditions.
- Bank of America’s solution, CashPro Forecasting, uses machine learning and AI to improve accuracy and efficiency.
The rewards of greater visibility
Your re-envisioned, leaner banking structure will provide a holistic view of your global cash position, which will result in several beneﬁts:
- Productivity: You’ll spend less time navigating banking relationships, freeing up resources for activities that add value.
- Eﬃciency: Decision-making will become easier, as you’ll no longer have to manage the nuances between multiple banking systems.
- Analysis: Real-time information will be in one place, helping you to easily pull data and spot patterns.
- Automation: Tools such as AI and machine learning will simplify day-to-day operations.
Most importantly, greater transparency can allow you to ﬁnd funds to leverage for debt paydowns, capital expenditure and general business reinvestment.
To learn more about increasing visibility into your cash management, or any other treasury needs, contact your Bank of America representative.
Will Davis | Vice President, Liquidity Product Sales Manager, Bank of America
1 PwC Global Treasury Survey, June 2023.
Navigating treasury transformation
Successful large cash consolidation initiatives require significant time and resources, as well as upfront planning.
Consolidating cash between regions
In today’s rising rate environment, companies are seeking ways to optimize liquidity domestically and across regions, cut overall borrowing costs and improve returns on capital.