Corporate cash management

Earn extra with your cash assets

Efficient and productive cash management is an integral part of a company’s operations. If you constantly have excess liquidity, you should consider finding a suitable cash management model for your company. You should divide your cash assets into different categories. For example, you can divide excess liquidity into primary spare cash and secondary spare cash.

Primary spare cash

Important characteristics of the primary spare cash:

  • can be cashed in when necessary
  • exposed to the smallest possible risk of losing the capital

With the primary spare cash you can also prepare for holiday bonuses, dividends or other larger expenses by investing the money in an instrument that matures when you need the money.

Secondary spare cash

The secondary spare cash is spare cash that is not needed in a normal situation but may come handy in case something unexpected happens. As the assumption is that the cash will not be needed in the short term, you can seek a higher return when investing it.

Important characteristics of the secondary spare cash:

  • the investments should mature at a regular frequency, for example, every 6 to 12 months, allowing a regular assessment of the liquidity need
  • when the maturity dates are spread evenly and the investments offer regular cash flows, you can also invest the secondary spare cash for longer periods
  • the return on the secondary spare cash should be higher than inflation

The return on your company's cash assets will be much better with more efficient cash management and spending that is designed to suit your company's needs.