Firms Focus on Receivables Portfolio as a Means to Create Liquidity

To succeed and grow in this post-crisis era, corporations will need to capitalise on change and seize new opportunities to generate cash and optimize liquidity, says IDC/Financial Insights.

 

"Atop the priority list of the corporate finance executive is an emphasis on the receivables portfolio as a strategic asset and means to create liquidity," says Jeanne Capachin, research vice president, IDC/Financial Insights. 

 

Capachin adds that continued streamlined management of banking relationships and prudent risk management will also be a focus.  For many corporations, these initiatives will need to be managed within the context of evolving global business requirements, regional nuances and changing regulation.

 

“Corporations are thinking about key initiatives that will help them optimize liquidity, streamline communications, and lower operational costs.  To capitalize on the changes that we’ve seen in our industry, corporations are looking to introduce innovation and efficiency into the management of cash and risk and their surrounding workflow processes. For instance, corporations will look at alternative financing options; in particular they will leverage their trade receivables in their overall capital structure,” adds Scott Coffing, president of SunGard’s corporate liquidity business.

 

SunGard has identified 10 trends impacting how corporations approach liquidity management. These trends include:

1. Corporations will increase demand for hosting and managed services of their financial applications
 
2. More organisations will utilize statistical modeling for corporate credit risk assessment
 
3. There will be a continued increase in trade financing of suppliers
 
4. Corporations will more strategically leverage their receivables in their overall capital structure
 
5. Organisations will continue to increase their vendor/supplier counterparty risk assessment
 
6. Corporations will adopt more advanced modeling for evaluating FX risk
 
7. As the SEPA ‘end-date’ nears, corporations will have a renewed focus on compliance
 
8. Hub and spoke networks will be adopted to facilitate corporate-bank communications
 
9. North American organisations will escalate migration from paper checks to ACH, EFT and card payments

 

10. Corporations in emerging markets will increase their adoption of SWIFT messaging

 

 

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