5 winning strategies for managing liquidity in volatile times

July 24, 2023

Effective liquidity management is crucial to the success of any business. Learn about liquidity management strategies, managing risk, and more in our article.

Market and economic volatility are intensifying treasury managers’ focus on liquidity management, highlighting its critical importance for every business. Here are five strategies companies can employ to promote greater visibility and access to liquidity in any economic environment.

1. Engage customers and suppliers on payment terms.

Use regular relationship meetings to review and revise payment terms with customers and suppliers.

Here are two key internal questions organizations should be asking: Are your payment terms well-defined? And do they directly impact liquidity management in a positive way? “By taking a dynamic look at these questions, companies can better understand risks that are created through terms management,” says John Melvin, vice president, working capital consultant, at U.S. Bank.

Consider using discounts to give customers an incentive to pay you faster and negotiations around pricing and sales volume to encourage suppliers to give you more time to pay. 

2. Encourage customers and suppliers to migrate from paper to digital payments.

Work with customers to migrate them from paying you by check to using the growing variety of digital payment options, including traditional Automated Clearing House (ACH), Same Day ACH, card and some of the newer, faster payment channels such as Zelle®, The Clearing House RTP® network and the FedNow® Service, which the Federal Reserve launched in July 2023.

Receiving digital payments won’t necessarily mean the cash arrives faster — as customers may delay initiating digital payments to shore up their own liquidity — but it will mean you can recognize and post incoming transactions sooner.

From a buyer’s perspective, today’s instant payment alternatives allow you to pay suppliers on the due date, both giving you payment certainty and allowing you to maximize your trading partner’s liquidity.

Also, as a buyer, consider evolving your purchasing process by using a payments menu when working with suppliers. A payments menu offers your suppliers distinct combinations of payment methods and terms from which to choose. The menu allows suppliers to get the payment terms they want, but to receive those terms they must accept a particular payment method. The menu should include digital payment options in lieu of paper-based payments. For instance, a menu might offer 60-day terms if the supplier accepts an ACH, or 25-day terms if it accepts a virtual card.

A payment menu will help move suppliers to your preferred digital payment method or methods and enable you to take advantage of prompt payment discounts. The buyer also gets more predictable timing with payment settlement, which enables more efficient use of cash and investment of idle cash. 

3. Embrace modern technology solutions.

The intersection of legacy technology and new payment rails complicates corporate liquidity management. “As payment systems emerge and evolve, legacy platforms aren’t necessarily able to keep up with the changes,” says Mary Brause, senior vice president, deposit and liquidity products, at U.S. Bank. “This requires companies to bolt together old technology and new solutions.”

It’s important to adapt your liquidity management strategy to changing circumstances by employing new electronic tools, which can encourage tactical and strategic evolution.

“Companies can reduce costs when they integrate payment solutions with existing treasury workstations and ERP infrastructures,” Brause notes. “A central payments solution will include up-to-date security protocols and regulatory compliance modules and can take on all payment types.”

Deploying cloud-based ERP or treasury workstation solutions can connect cash flow planning tools with your company’s CRM and sales management systems. And dashboards are a powerful visual tool that provide leaders across the organization with meaningful cash flow metrics that reflect the strategic drivers of diligent cash flow management.

4. Unlock trapped cash.

One risk of not having visibility into your cash flow is that you may be trapping cash and not even know it.

Companies across all industry segments experience trapped-cash scenarios, in many cases as a direct result of manual internal operational flow. “Manual processing can create limited visibility into transactions as well as the recognition of cash,” Melvin says.

“With greater visibility, you can better identify where trapped cash exists,” he says. “For example, company A sends company B a payment without remittance information. You can’t apply cash without this information, so it sits waiting for outstanding data, such as trade/credit availability, investment decisions, or liquidity availability. This forces company B to borrow unnecessarily.”

5. Reduce liquidity risk.

“Without visibility into your cash flow, you create liquidity risk,” Brause says.

In addition to effectively forecasting cash and managing seasonal cash flows, some techniques to address this risk include:

  • In receivables management, employ a more robust technology solution that can automate payments tracking against contract terms and send payment reminders.
  • Understand counterparty insolvency risk by monitoring the business strength of your suppliers/vendors.
  • Manage cross-currency transactions. Cross-currency transactions can be unpredictable, with fluctuations in exchange rates making it difficult to accurately figure out how much a cash inflow or outflow will be. 

Change is constant.

At any given time, a business might be in a strong cash position with few concerns about accessing liquidity. But economic cycles come and go, meaning for most companies, access to liquidity can tighten from time to time. Businesses employing these five strategies will be much better prepared to maintain access to cash when financial waters get choppy.

“Change is constant in liquidity management, and optimizing how you manage data, accept and receive payments and drive business processes will reflect directly on your bottom line,” Melvin says. “It’s important to have a 360-degree awareness of what’s going on around you and how it impacts your working capital and liquidity management strategies.”


Enhancing your liquidity management requires insight into the latest payments trends and innovations. Contact U.S. Bank for more information.

Related content

Addressing financial uncertainty in international business

Webinar: CSM corporation re-thinks AP

Evaluating interest rate risk creating risk management strategy

5 tips for managing your business cash flow

Tech tools to keep your restaurant operations running smoothly

The future of financial leadership: More strategy, fewer spreadsheets

Staying organized when taking payments

The growing importance of a strong corporate culture

Is your restaurant Google-friendly?

Employee benefit plan management: trustee vs. custodian

Delivering powerful results with SWIFT messaging and services

Empowering managers with data automation and integration

Preparing for your custodian conversion

Work flexibility crucial as municipalities return to office

High-cost housing and down payment options in relocation

How RIAs can embrace technology to enhance personal touch

Digital processes streamline M&A transactions

Crypto + Relo: Mobility industry impacts

For today's relocating home buyers, time and money are everything

How to increase your savings

How to identify what technology is needed for your small business

Key considerations for online ordering systems

Tools that can streamline staffing and employee management

Improve online presence your business

Hybridization driving demand

Refining your search for an insurance custodian

How to spot an online scam

In a digital world, Liberty Puzzles embraces true connection

3 simple brand awareness tips for your business

How to get started creating your business plan

Authenticating cardholder data reduce e-commerce fraud

Third-party vendor risk: protecting your company against cyber threats

5 tips to use your credit card wisely and steer clear of debt

Why Know Your Customer (KYC) — for organizations

Webinar: CRE technology trends

Cybersecurity – Protecting client data through industry best practices

Cybercrisis management: Are you ready to respond?

Business risk management for owners of small companies

Proactive ways to fight vendor fraud

Fight the battle against payments fraud

5 winning strategies for managing liquidity in volatile times

What corporate treasurers need to know about Virtual Account Management

CFO survey: A shifting focus on ESG in business

CFO report: Driving growth via new business models and technology

CFO insights: Leading the recovery for sustainable growth

4 questions you should ask about your custodian

Luxembourg's thriving private debt market

Insource or outsource? 10 considerations

Easier onboarding: What to look for in an administrator

Putting home ownership within reach for a diverse workforce

How jumbo loans can help home buyers and your builder business

How to apply for a business credit card

Prioritizing payroll during the COVID-19 pandemic

Meet your business credit card support team

Omnichannel retail: 4 best practices for navigating the new normal

How to reward employees and teams who perform well

8 ways to increase employee engagement

Planning for restaurant startup costs and when to expect them

Business tips and advice for Black entrepreneurs

10 tips on how to run a successful family business

Empowering team members

Why retail merchandise returns will be a differentiator in 2022

How does an electronic point of sale help your business keep track of every dime?

How a travel clothing retailer is staying true to its brand values

Use this one simple email marketing tip to increase your reach

Opening a business on a budget during COVID-19

How a small business owner is making the workplace work for women

How small businesses are growing sales with online ordering

How (and why) to get your business supplier diversity certification

Business credit card 101

Checklist: Increase lead generation with website optimization

The role of ethics in the hiring process

Choosing your M&A escrow partner

How to test new business ideas

How a group fitness studio made the most of online workouts

Year-end financial checklist

How community gave life to lifestyle boutique Les Sol

The San Francisco bridal shop that’s been making memories for 30 years

How Wenonah Canoe is making a boom in business last

Complying with changes in fund regulations

The latest on cybersecurity: Mobile fraud and privacy concerns

The secret to successful service provider integration

High-yield bond issuance: 5 traits lawyers should look for in a service provider

3 tips to maintain flexibility in supply chain management

How to build a content team

Travel for less: Smart (not cheap) ways to spend less on your next trip

Tips to overcome three common savings hurdles

Helpful tips for safe and smart charitable giving

Allowance basics for parents and kids

The password: Enhancing security and usability

5 Ways to protect your government agency from payment fraud

Hospitals face cybersecurity risks in surprising new ways

10 ways a global custodian can support your growth

3 questions to ask your equity, quant and CTA fund administrator

Administrator accountability: 5 questions to evaluate outsourcing risks

How Shampoo’ed is transforming hair and inspiring entrepreneurs

Webinar: AP automation for commercial real estate

The benefits of a full-service warehouse custodian

Cryptocurrency custody 6 frequently asked questions

4 ways to outsmart your smart device

How to spot a credit repair scam

6 ways to spring clean your finances and save money year-round

How to cut mindless spending: real tips from real people

Real world advice: How parents are teaching their kids about money

How to stop living paycheck to paycheck post-pay increase

Practical money tips we've learned from our dads

Give a prepaid rewards card for employee recognition

5 unique ways to take your credit card benefits further

5 tips to use your credit card wisely and steer clear of debt

30-day adulting challenge: Financial wellness tasks to complete in a month

Webinar: Robotic process automation

Celebrity Cake Studio’s two decades of growth and success

How Al’s Breakfast is bringing people together

What you should know about licensing agreements

Webinar: CRE Digital Transformation – Balancing Digitization with cybersecurity risk

Hospitals face cybersecurity risks in surprising new ways

Webinar: CRE Digital Transformation – Balancing Digitization with cybersecurity risk

5 steps for creating an employee recognition program

How to hire employees: Employee referral vs. external hiring

Break free from cash flow management constraints

Service provider due diligence and selection best practices

Post-pandemic fraud prevention lessons for local governments

How a bar trivia company went digital during COVID-19

Evaluating interest rate risk creating risk management strategy

Authenticating cardholder data reduce e-commerce fraud


Products and services may be subject to credit approval. Eligibility requirements, restrictions and fees may apply. Investment products and services are: Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency. Equal Housing Lender. Loans and lines of credit are offered by U.S. Bank National Association.

RTP® is a registered service mark of The Clearing House Payments Company L.L.C. Eligibility requirements, other conditions and fees may apply. Services mentioned may be subject to credit approval.

Zelle and the Zelle related marks and logos are property of Early Warning Services, LLC.

Deposit products offered by U.S. Bank National Association. Member FDIC. ©2023 U.S. Bank.

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.