ADVERTISING FEATURE
FDs SAY ‘CASH IS STILL KING’
With security and fl exibility top of FDs’ wish list for cash management according to a recent survey, Steve Clarke, Area Director, Lloyds Bank Wholesale Banking & Markets, highlights the approach his team is taking to support businesses in the region.
Many of my conversations with business people in recent months have returned again and again to that old saying ‘cash is king’. Unsurprisingly, it is paramount in companies’ strategies for survival and success.
CASH VISIBILITY AND ACCESSIBILITY HAVE RAPIDLY BECOME THE OPERATIONAL IMPERATIVES OF COMPANIES.
A recent survey, carried out in conjunction with Financial Director (FD) magazine, highlighted the importance of cash in what remains a tough economic environment. A third of the 500 FDs surveyed stated that they had spent more time on the basics of cash management over the past year. The number one issues were security and fl exibility.
CASH – AN OPERATIONAL
IMPERATIVE It mirrors what we’re seeing here in the Thames Valley and South. Cash visibility and accessibility have rapidly become the operational imperatives of companies. ‘Working capital optimisation’ is the buzz phrase.
Having to micro-manage their cashfl ow has become a business priority. In particular as they are feeling the pressure of many of their customers extending payment terms or demanding greater discounts for earlier payment (less than 90-days).
FLEXIBILITY FOR GROWTH The knock-on effect of that, of course, is that these businesses have less time to focus on strategies for growth – the strategies that will ultimately drive the UK economy out of recession.
With that in mind, we’re continually evolving our cash management solutions to deliver security and fl exibility as effi ciently as possible. We all recognise the opportunity costs of holding cash in a low-interest environment. By working together we can tailor solutions to tie cash to better returns whilst ensuring that funds retain the required liquidity.
A key priority across the banking industry as a whole, as well as Lloyds Bank in particular, is to engage technology to provide cash management solutions and services that make life easier.
FORECASTING IN
UNCERTAIN TIMES Uncertainty can drive paralysis, so regular and responsive forecasting is crucial. Our survey showed that cashfl ow forecasting has become central to business planning, with 30% of respondents admitting to spending more time on forecasting than they did 12 months ago. Yet forecasting is not easy when the variables are so volatile. Uncertain payment terms and delays in cross-currency payments are just some examples that impact on the ability of businesses to forecast accurately, as our respondents observed.
Drawing on our extensive experience across sectors and businesses to develop detailed and complex modelling tools, allows customers to revise actual and forecast data as circumstances change.
SECURITY OF FUNDS Many FDs admit that delays in remittance of payments have a huge impact on their business. It resonates with trends we’re seeing in the importance of accessibility and visibility of cash. In common with other banks, here at Lloyds Bank we’re committed to speeding up the cash cycle. Supplier Finance is integral to that, as is the development of Faster Payments and confi rmation of the implementation of SEPA. These steps create potential for
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mid-size corporates to reduce costs and increase speed, visibility and control over their payments.
Centralising funds links closely with the issues of being able to see your cash and access it when required. As one FD remarked, “If I can’t see the cash, I haven’t got it.” Technological advances in providing real-time access to account information are therefore vital. Centralising funds enables businesses to instantly see and manage gaps or ensure that surplus funds are put to work.
It goes hand in hand with ensuring that funds are held in a secure environment to form part of a business’ overall approach to risk management. Here at Lloyds Bank, we’ve worked and continue to work hard to ensure we’re sustainable and strong, so that you can have faith in the security of your funds.
“UNCERTAINTY CAN DRIVE PARALYSIS, SO REGULAR AND RESPONSIVE FORECASTING IS CRUCIAL.”
In the face of continued challenges and shocks, many clients are internally- focused. They want value for money to make cash work harder. That’s why the products and solutions we offer to enable working capital optimisation are supported by a clear standalone business case. Whether that’s optimising interest or reducing risk, our teams are able to have those hub and spoke discussions to guide businesses in this vital area.
To discuss your banking or cash management requirements, please call Steve Clarke, Area Director, Thames Valley and South, on 079202 07685 or
steve.clarke@
lloydsbanking.com
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