The "liquidity planning" refers to the process of forecasting and managing a company's available cash balance over a specific period. The goal is to ensure that the company has sufficient liquid funds to cover ongoing operating expenses, meet payment obligations, and avoid unexpected financial shortfalls.
Typical functions of software in the area of "liquidity planning" may include:
Cash Flow Forecasting: Predicting future cash flows based on historical data and projected revenues and expenses.
Scenario Analysis: Conducting "what-if" analyses to simulate different financial scenarios and assess their impact on liquidity.
Liquidity Monitoring: Monitoring current cash flows and comparing them with planned values.
Creditor and Debtor Management: Managing supplier and customer payments to optimize payment terms and maximize liquidity.
Liquidity Forecasting: Generating forecasts for future liquidity needs based on planned activities and financial commitments.
Automated Payment Planning: Automating the planning of payment transactions to ensure payments are made on time and avoid liquidity shortages.
Reporting and Analysis: Creating reports and analyses on the company's liquidity position, as well as identifying trends and risks.