Liquidity Survey: Last Chance to Participate!

Entering 2020, corporate treasury professionals were worried. When we published the Treasury & Risk “2019 Cash Management Survey” last November, it seemed that “uncertainty in the global economy [was] causing businesses to entrench and build their cash reserves to weather any financial downturn,” according to Hung Nguyen, director of sales North America for BELLIN.

Indeed, that’s what the data showed. Over the course of 2019, cash reserves had grown in 42 percent of organizations, and had grown by more than 10 percent in 2 out of 10 companies. Meanwhile, cash holdings had decreased in only 22 percent of organizations. Stockpiling cash seemed to be a priority for many businesses late last year.

Take this year’s Cash Management Survey (here), and:

• Receive an exclusive benchmark report showing research results
• Be entered to win a $200 AmEx gift card

Then, when asked which single factor they expected to have the most impact on cash reserves over the upcoming year, respondents selected “uncertainty in global business climate” as their third-most-prevalent choice. Among the 5 percent who selected “Other,” several wrote in answers such as “anticipation of a recession in the next year” and “potential for a recession.” Little did they know what 2020 would entail!

Even the pessimists who took the survey in early autumn of 2019 could not have predicted the havoc Covid-19 would wreak on the global economy. Still, their expectations were closer to reality than those of the quarter of respondents who believed last year that increases in operating cash flows would be the largest driver of their company’s cash reserves in 2020, or the 8 percent who saw increasing capital expenditures as the biggest influencer of their level of cash holdings. (See Figure 1, below.) It seems unlikely that very many businesses have seen jumps in operating cash flows or capex over the past six months.

Knowing what we know today, these results are fascinating. That’s why we at Treasury & Risk are excited to gather answers to the same questions this year—to see how businesses’ liquidity management practices are changing in response to the Covid crisis. How are corporate treasury teams revising their investment policies for management of cash and short-term investments? Have they been able to continue increasing cash holdings this year, or are they now drawing down their company’s cash reserves? And how are they allocating cash among their different investment options?

Whether or not you participated in last year’s survey, we invite you to spend 15 minutes answering this year’s questions. Responses will be compiled and analyzed only at an aggregated level. And if you contribute your insights, you will receive our exclusive survey report with the full results, and will be entered to win a $200 American Express gift card.

Help us build our knowledge base of current cash management practices, and we will help you benchmark your response to the Covid-19 crisis against that of your competitors and peers. Take the “2020 Cash Management Survey” before it closes on Monday, September 21.