Opportunities for maximizing treasury management.

• Author: Whitley, Laura
• Position: TRFASURY

Without question, the last few years have brought upheaval to the global economy and uncertainty to businesses in the United States. Between lagging consumer demand and the diminished value of some assets, many companies have gone beyond the typical belt-tightening to help their companies survive.

Absent new loans or a sudden uptick in revenues, American businesses--from multinationals to small companies--are increasingly turning to treasury management as an efficient and effective way to help contain costs, reduce risk and conserve cash. Though the worst of the downturn has hopefully passed, evidence of lingering doubt among financial executives is clear.

In the latest edition of the annual Dank of America Merrill Lynch CFO Outlook survey, only 38 percent of financial executives said they expect the U.S. economy to grow this year. That's down from 56 percent who projected growth a year earlier. Not surprisingly, CFOs gave low marks overall to the national economy, grading it 44 on a scale of 100--the lowest number in the survey's 14-year history.

The forecast isn't entirely glum. Financial executives indicated that they plan to continue spending on research and development. They also don't expect the challenging economy to translate into job losses at their companies. In fact, almost half of the CFOs surveyed said they expect to add staff, while most of the rest expect their workforces to remain the same size. Roth of those responses were consistent with the previous year's survey.

Still, it's clear that financial executives don't anticipate an immediate turnaround in the economy. While they generally think credit will be available this year, survey results reveal a decline in those who expect their companies to consider financing in the months ahead. At the same time, fewer CFOs said they expect revenues and profits to grow.

So if not financing or increased revenues, where will companies find money this year? Increasingly, financial executives are focusing on freeing up liquidity within operations. That means installing more efficient and effective treasury management capabilities.

Given the ongoing volatility, many companies have evaluated whether their existing strategies and systems provide adequate insulation against revenue and cost distortions. Those embarking on such evaluations must keep in mind some key considerations:

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