Liquidity Management Overview
Ripple Treasury Liquidity Management provides end-to-end visibility into all your liquidity, with seamless integration using sophisticated, user-defined cash positioning, forecasting, and in-house banking. Our advanced, technology-driven features allow you to strategically manage cash, increase accuracy and discover new insights necessary to stay up-to-date with your business needs.
Worksheets
Our dynamic worksheets allow you to query sets of data, view that information in the worksheet, then drill down in a live environment and see details of each transaction or dataset queried. These resemble spreadsheets but are much more powerful, allowing you to slice and dice your data.
Refer to Worksheets: View and Use for more information.
Bank Statement Worksheet
This specialized worksheet provides a quick overview of Actual (prior day) and Estimated (current day) bank balances for a specified date range. You can view bank balances that are categorized as a Ledger balance or an Available amount. This gives you a quick look at bank balances coming into the system from your imported daily bank files.
Refer to Bank Statement Worksheets: View and Use for more information.
Balance Explorer
The Balance Explorer lets you access and view transaction details and balance records from multiple internal and external sources. The transactions may be Actual, Estimated, or Forecast Balance Records. They may be imported via the electronic bank statement, imported directly by the customer, or manually entered through the Balance Explorer.
You can use this tool to quickly locate any type of cash transaction in the system using its powerful sorting, filtering, and drill down functions. It provides you the ability to:
Easily view specific transactions that are of interest regardless of the time period or the search criteria involved.
Download balance information into a spreadsheet for further investigation or reporting purposes.
Maintain individual records for Estimate and Actual transactions.
Maintain individual Forecast records.
Drill down into any transaction to see all details associated with the transaction.
Add, clone, modify and void balances and transactions (for users with access rights).
Refer to Balance Explorer: Find a Transaction or Balance for more information.
Transaction Assignment (TA) Rules
You probably have many different banks, and each bank utilizes many different Bank Codes (like BAI Codes, MT940/42, and CAMT), associated with transactions reported on the electronic bank statement file and imported into Ripple Treasury. This creates a data-consistency input problem.
At the same time, you likely have many different internal codes (Categories) that they use to identify their transactions when reporting internally, or to their own internal systems, like ERPs. This creates a second data-consistency input problem.
For example, every company is different with how transactions are entered or imported into Ripple Treasury, how those transactions are classified or recategorized, and how they are recorded in accounting and journals.
Transaction Assignment (TA) Rules provide a powerful, flexible, and efficient way to:
Recategorize your transactions
Generate cash accounting
Perform specific actions that help you report on different balance records, transactions, and transaction types
Refer to Transaction Assignment Rules: Create and Edit for more information.
Cash Accounting
Cash Accounting allows you to set up Ripple Treasury to automatically generate general ledger journal entries based on transactions associated with a bank account. Transactions can be imported from the bank, imported from third party systems, or created via Payments or Financial Instruments.
The Cash General Ledger lets you analyze bank transactions and generate journal entries automatically to update your back office General Ledger system. The General Ledger encompasses the following functions:
Define your back office General Ledger systems. This includes defining the segments making up the GL account numbers, which are also known as GL Charts of Accounts.
Define your companies (entities or subsidiaries).
Import the GL account numbers during the initial installation and provide periodic updates to keep all systems in sync.
Apply GL accounts to Actual and Estimated transactions manually or using Transaction Assignment rules. Cash accounts contain their own default GL account number. The key is to apply 1 or more offset GL accounts to those transactions requiring a journal entry, in the most automated way possible. Not all transactions will necessarily require a journal entry.
Extract selected items, marking them as extracted to avoid duplication.
Re-extract items, if required, under controlled procedures.
Produce reports with views by bank account, GL account, etc.
Highlight both the status of individual transactions and totals
Define items still in Suspense that require attention
Display all transactions both before and after the GL extract was run
Create manual journal entries that aren't associated with a bank account.
If required, export these journals to your corporate general ledger.
Refer to Liquidity Management GL: Configure GL for more information.
Cash Reporting
There are several types of cash reporting that exist in Ripple Treasury:
List Reports: Report in spreadsheet view that looks similar to Worksheets but without drill-down options. Adjust the report to your desired view and then export it to to Excel, PDF, or Word. Refer to List Reports for more information.
Ad Hoc Reports: Reporting tool for data queries, which allows you to create reports across all data fields in the system for quick and efficient column-generated reports. You can export reports to Excel, PDF, or Word. Refer to Ad Hoc Reports: Run Reports for more information.
Standard Reports (Library): Pre-written reports that allow you to view data based on the typical treasury needs (cash balances and transactions, reconciliation, accounting, deal management, etc.). The Ripple Treasury Platform offers over 80 standard reports that are usable out of the box. Refer to Standard Reports Library: Run Standard Reports for more information.
Analytics Dashboards: Simplified graphs of reports from the Standard Report Library in tile columns. Refer to Analytics Dashboard: Create Standard Report Dashboard for more information.
Custom Reports: Flexible, customized reports with the fields and data sources you wish to report on and set up your desired sub-reports, expressions, highlighting for specified thresholds, visualization styles, interactive pivot tables, groupings, and graphs. Custom reports can be created using the Instant Reports wizard or through the full Custom Reports tool. Selecting the Custom or Instant report creation tools, the Dashboards, or the Repository opens the set of custom reporting screens in a new browser tab where you can move between the report-building screens and the Repository where they are saved.
Instant Reports: Quick reporting wizard that generates Custom Reports. Refer to Instant Reports: Run Reports for more information.
The Instant Reports wizard is a simpler screen to follow than the full Custom Report tool. However, once you are familiar with the tool, you will likely find it more efficient to use the full tool.
Custom Reports: Full-featured Custom Reports tool that lets you modify existing reports and create new reports from scratch. Refer to New Analysis: Run Reports for more information.
Dashboards: Present elements of multiple existing reports on a single screen in a tile format to create a centralized view of different aspects of operations. Dashboards can give you snapshots of data from different sources, such as a table from one report, a chart from another report, etc. Dashboards are infinitely configurable, and the tiles can be sized to accommodate any type of data. Refer to Dashboards: Configure for more information.
What is Liquidity Management?
Liquidity Management refers to the ability to accurately track, monitor, and understand the movement of cash within your organization. This involves having a comprehensive view of cash balances, cash flows, and other cash-related activities.
Improving Liquidity Management is crucial for businesses to maintain financial health and operational efficiency. Liquidity Management is achieved through:
Digital Tracking Systems: Implementing systems that record and reconcile cash movements digitally.
Standardized Processes: Using standardized methods for tracking and reporting cash activities.
Real-Time Monitoring: Using technologies that provide real-time updates on cash positions.
Liquidity Management Vs. Cash Forecasting
Forecasting is often confused with Liquidity Management.
Liquidity Management Features | Cash Forecasting Features |
|---|---|
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Liquidity Management Workflow
The following diagram shows how liquidity data is captured and incorporated into a worksheet.
How Liquidity Management Fits Into Your Business
Roles Involved
Treasurer
Treasury team
About Liquidity Management
Cash positioning reporting uses an account-based structure
Focused on short term Liquidity Management (daily / weekly)
Predominantly managed by treasury management system (TMS) daily and weekly forecasting tools
Helps cash managers and treasurers ensure operating accounts are funded correctly and optimized
Assess counterparty risk
Short-term scenario analysis and management
Pain Points We Can Help You Overcome
Have to log into multiple bank portals to get visibility on what and where your cash is
Not prepared for unexpected and unknown events
Managing and predicting cashflows from multiple sources can lead to complexity of cash flows
Manual process
Lack of control, auditability, and transparency
Can’t view my cash position the way I want to
Inability to explain to the board where the numbers come from
Success Metrics
Ending cash positioning
Percent of target liquidity
Variance
Daily cash on hand
Operating cash flow
Working capital ratio
Counterparty risk exposure
Purpose
The key benefits of Liquidity Management are:
Improved Decision-Making: With clear insights into cash positions, businesses can make better financial decisions.
Cash Availability: Liquidity Management helps you ensure that there is enough cash available to meet obligations and invest in opportunities.
Risk Mitigation: Understanding your cash positions reduces your risk of cash shortages and improves your overall financial stability.
Core Objectives
Liquidity Management will usually be some combination of the following:
Maintaining a balance that prevents overdraft
Meeting loan obligations and balance requirements
Covering account activity charges
Meeting major disbursement contingencies
Optimizing cash borrowing and investing
Monitoring foreign currency risk
Liquidity Management Key Capabilities
Data and connectivity:
Bank and ERP connections
Data orchestration
Automation of data collection
Cash positioning:
Real-time cash positioning
Strategically position your cash
Scenario analysis:
Flexibility to run multiple scenario analyses
Identify and act on counterparty risk
Insights and reporting:
Dashboarding and reporting
Insights for capital structure decisions
Transaction tagging and mapping:
View and track your cash at any level of detail
Easy to use:
Time to value in 90 days
Quick adoption
Key Questions Answered by Liquidity Management
How can I see and report on my cash quickly?
How can I see who has made changes to the cash position?
Auditability of my position to ensure nothing strange has happened (fobs, etc.).
What accounts are at risk of going below my balance thresholds?
How am I able to plan for various cash flow scenarios?
Importance
Liquidity Management protects you from business risk and increases your data connectivity.
Business Risks Without Liquidity Management
Liquidity risk:
Limited cash visibility
Error-prone manual process
Limited scenario planning
Counterparty risk:
Reputational damage from financial instability
Security risk:
Audit and tracking issues with spreadsheets
Fraudulent transactions
Reputational risk:
Security token management risks
Security breach exposure
Data Connectivity Through Liquidity Management
Data:
Banks (any API-based bank can be connected within 7 days)
ERPs
Budget
People
Examples of how the data is made visible:
Daily cash reporting and liquidity analysis
Multi-currency forecast models
Rolling business unit cash flow forecasts
Consolidation reporting
Variance and accuracy analysis
Accounts receivable (AR) and accounts payable (AP) analysis and payment profiling
Use Cases
Daily Cash Compared With Weekly Forecast
Liquidity Management allows you to create a short-term forecast to see your daily cash against your weekly forecast.
Account-Level Forecasting
This is a granular approach to visibility management. The aim is to focus on future sales, revenue, and other metrics on specific accounts.
Daily Cash Forecasting
A daily cash forecast has detailed transaction-level tagging and interactive cash position worksheets. You can easily build, view, and assess cash positions for faster, more accurate decision-making.
What if Scenario Analysis
Model potential scenarios to proactively manage liquidity risks, identify potential counterparty exposures, and simulate cash flow impacts under various conditions.
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