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Introducing kandon Technologies Liquidity Management and Treasury Management Products for Brands

By Guardian Nigeria
01 August 2022   |   3:12 pm
Liquidity is the ability of an asset or a business to quickly convert into cash. Liquidity management is the process of managing this ability and making sure that you always have enough cash on hand to pay your bills, maintain operations and grow your company. Liquidity can be measured in many different ways, but typically…

Liquidity is the ability of an asset or a business to quickly convert into cash. Liquidity management is the process of managing this ability and making sure that you always have enough cash on hand to pay your bills, maintain operations and grow your company. Liquidity can be measured in many different ways, but typically it refers to a company’s short-term or long-term assets. At kandon, you are assured of liquidity provision for the running of your business in your preferred currency, from the range of global currencies available across our operation areas. 

What is Liquidity Management?

Liquidity management is the process of managing the amount of cash and other liquid assets available to a business. A company with great liquidity will have plenty of cash in its accounts, which allows it to run smoothly without having to worry about paying its bills on time. In contrast, an organisation lacking liquidity may find itself paying rent or employees late if it doesn’t have enough money in its account balance sheets. 

Liquidity management involves ensuring that businesses have sufficient funds on hand at all times so they can meet their obligations of paying bills on time, buying inventory and supplies needed for operations, making payrolls and continuing operations during periods when business is slow or there are unexpected expenses such as equipment repairs or product recalls due to quality concerns with existing products already in inventory.

Liquidity Management Strategies

There are several liquidity management techniques that are used by kando.com in the management of clients’ liquidity on a personal and organisational level. Some of these techniques include:

  • Physical Concentration
  • Notional Pooling
  • Overlay Structures

Physical Concentration

Physical concentration is a liquidity management technique where a company has a large portion of its assets in a single location. The asset base can be physical or financial, but it is usually the most liquid asset on hand. This means that if something happens to that particular place and there is no other immediate access to cash, then the business gets into trouble. For example, if one of your warehouses burned down with all your inventory inside and there was no backup plan for where to put those products after they were sold off the shelf at various retail locations, then you’d have an issue managing liquidity.

Physical concentration can be a risk to a company if the assets are in one place because if something happens at this location (like an earthquake or fire), then all those assets could be lost at once without having any alternate options available for replacement or backup facilities nearby.

Notional Pooling

Notional pooling is a liquidity management technique that allows banks to create a single, large pool of assets and liabilities. This makes them less dependent on the interbank market and allows them to manage liquidity more effectively.

The way this works is that a group of banks agree to trade with each other based on their combined balance sheet sizes instead of individual ones. For example, if Bank A has $100 million in assets and liabilities and Bank B has $200 million in assets and liabilities, then they might agree to trade as though their combined balance sheets were worth $300 million (that is why it’s called notional). 

That way, if Bank A needs some money from Bank B but doesn’t have enough collateral for it (such as gold or government bonds), then they can borrow what they need by trading securities at face value instead of having actual cash flow back-to-back between each other using the same custodial account structure used when making payments between two separate institutions.

Overlay Structures

Overlay structures are an investment technique used by institutions and individuals to manage liquidity. Overlays are typically structured as a series of derivatives, such as swaps (fixed-to-floating), caps (floating-to-fixed) or collars (fixed-to-fixed). These structures allow investors to lock in the yield on their investments over a set period while simultaneously hedging against changes in interest rates. The combined price movements of these underlying instruments determine the investor’s overall return profile across all maturities within that overlay structure.

Liquidity Management in Business

Liquidity is a measure of how easily you can access cash. It’s one of the three main factors that impact the capital structure of your business, along with profitability and debt capacity. Liquidity management is about managing these factors to ensure stability and growth for your company. There are two main benefits to liquidity management in business:

You can manage cash flow more effectively by forecasting when you will need cash in order to plan for future payments, sales or investments. This allows you to avoid having too much debt on the balance sheet while keeping your income high enough to pay it off quickly at any time if necessary. 

You can reduce risks by having a good understanding of what types of liabilities are best suited for certain situations within different scenarios so nothing unexpected happens later on down the line. 

Liquidity Management in Investing

Liquidity management is a key part of investing. Liquid assets are those that can be converted into cash quickly and easily, while illiquid assets require the owner to wait for an extended period before they can be turned into cash. When you invest in a stock or bond, for example, you’re buying an asset that isn’t liquid at all you will not be able to sell it immediately at any price if you need money right away. 

On the other hand, when you put money in your savings account at the bank or open a custodial account with a brokerage firm (which holds your actual securities), you have access to immediate liquidity you can withdraw funds whenever necessary without paying penalties or waiting for days or weeks like with traditional brokerage accounts.

Liquidity Management Comes With Risk

There is a slight risk involved in liquidating assets. The price you receive may be lower than expected. This can happen when there is not enough supply of the asset in question or if there is an influx of investors looking to buy that particular asset at the same time. This is where Kandon comes in to help you make the best decision as to how to reduce your risk to the barest minimum or to avoid the risk as much as possible. 

Types of Liquidity

There are several types of Liquidity that you need to know as an investor or just a business person, to be able to understand how to engage and interact with kando.com. The main types of liquidity include:

  • Asset liquidity
  • Market liquidity
  • Accounting liquidity

Asset Liquidity 

Asset liquidity is the ability to sell an asset quickly for cash. Liquidity is one of the key components of financial risk, so you should consider it when deciding which assets to buy and sell. Assets that are easier to sell will generally be more expensive than those that aren’t as liquid. Asset liquidity can also be measured by using market prices; if an asset has high liquidity, its market price will tend to move back toward its equilibrium price more quickly after being changed by news or other factors. 

Market Liquidity

Market liquidity is a measure of how easy it is to buy or sell an asset, i.e., how much volume there is in a market. Therefore such kind of liquidity comes at bigger costs or losses, especially in emergency situations. As an investor, you can raise market liquidity from the stock market or money market through the help of Kandon.com.

Accounting Liquidity

Accounting liquidity refers to a company’s ability to meet its short-term financial obligations. It is a measure of the company’s ability to pay its short-term liabilities, and it is often expressed as accounts receivable divided by current liabilities. A higher ratio means that the business has more money coming in than it owes, so it should be able to pay off any debts on time. A lower number suggests that there may be problems paying off those bills for the company.  Liquidity affects how easily you can convert something into cash, for example, selling a house versus selling stocks or bonds. Cash is typically considered liquid because it can be quickly converted into other assets or used for payments like bills or rent.

Importance of Liquidity Management

Liquidity management is important in the handling and processing of your finances and liquidity, liquidity which is the ability to meet short-term obligations. It’s important for businesses and investors, as well as the economy. Liquidity management matters because it:

Helps ensure the financial system can operate smoothly by maintaining a supply of funds available to individuals and businesses at a low cost

Keeps markets functioning efficiently by allowing market participants (including corporations) access to credit when they need it most during periods of stress such as a downturn in business activity or a correction in asset prices.

Provides confidence and stability for investors by ensuring they have access to cash when needed and are able to sell their investments at close-to-expected values despite changes in economic conditions.

Treasury Solutions and How to Improve your Earnings

The needs of clients seeking financial and treasury solutions continue to evolve and this is what drives the offerings by treasury management firms in the treasury industry such as Kandon.com. Liquidity management is better done with teams of treasury specialists dedicated to the delivery of solutions on liquidity management, that help businesses regardless of their size or where they are located to scale and this is what Kandon offers to its clients. 

What is Treasury?

Treasury is a type of fund that allows you to earn an exciting rate at kando.com, while your funds and earnings are invested in plans of your choice. You can keep earning from it until the term ends or withdraw earlier if you want to use the money for other purposes. Treasuries have a fixed return rate, which means that no matter what happens with interest rates or inflation, you will always receive a fixed amount of profit per year. In addition to this steady stream of income, Treasuries can also provide you with high returns if there is an increase in interest rates or inflation during your investment period.

What are Treasury Solutions?

Treasury solutions are a way to earn money by investing in the stock market. They allow you to invest in the stock market without having to do it yourself but have professionals such as Kandon do the whole work of scouring the markets for you. Treasury solutions are one of the best ways of making money on kando.com. They’re an easy way for you to make more money, and you don’t have to do anything except sign up for them and provide your investment capital. 

Cash and Treasury Management Tools 

There are several types of tools that help in the management of treasury as used on kandon.com. The top treasury management tools to improve your earnings include:

  • Liquidity Manager
  • Foreign Exchange and Interest Rates
  • Cloud Computing

Liquidity Manager

The liquidity manager is a tool used to manage cash and cash equivalents, short-term investments, and short-term liabilities. It provides an easy way to achieve the following goals:

  • Achieve a target balance of ready cash by adjusting the amount available for purchasing securities on margin or in your trading account at any time
  • Increase or decrease your holding period for investments purchased with borrowed funds (margin)

Foreign Exchange and Interest Rates

The Forex market serves as the largest market, with the most liquidity globally. It allows you to trade currencies and exchange rates between countries. Interest rates are a key driver of most financial markets including stock markets and bond markets. Interest rates can be used by governments, corporations and individuals to manage cash and treasury management. 

Cloud Computing

Cloud computing provides access and delivery of computing services via the internet. It is a model for enabling ubiquitous, on-demand access to shared pools of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly configured and operated with very minimal management effort or service provider interaction. Cloud computing ensures the seamless operations of cash and treasury management databases, transactions and databases. 

Cloud Computing also enables the sharing of resources by all participants in the Financial markets and Industry in real-time. Cloud providers make these resources available to customers using web-based tools over a network such as the Internet by means of cloud APIs (application programming interfaces), which are used to build software against cloud infrastructure. 

Treasury Management Services

There are several treasury management services available in the industry as offered by kando.com, some of them include:

  • Asset Liability Management
  • Trading And Hedging
  • Portfolio Management
  • Treasury Management Services

Asset Liability Management

Asset liability management is the process of managing an individual or company’s assets and liabilities. A company will have both, which means it has assets that are generating income for the organisation, as well as debts or payments that need to be made in the future. The asset liability management process involves analysing these two elements, understanding how they affect each other, and determining how best to manage them within your business model. It is important not only because it allows companies and individuals to plan better for their futures but also because failing at this task can lead directly to bankruptcy or other serious financial issues. Kandon is here to help you avert such occurrences with sound asset management.

Trading And Hedging

Hedging is a risk management strategy that involves taking a position in one financial instrument (the hedging instrument) to offset the effects of a second instrument whose price movement is expected to be opposite to that of the hedging instrument. The goal of hedging is to reduce or eliminate the risk of adverse price movements by offsetting them with transactions in instruments that react in an opposite direction. 

Portfolio Management

Portfolio Management is a function of risk management, liquidity management, profitability management, efficiency management and effectiveness. A flexible portfolio that’s carefully managed to include the right mix of assets can help you meet your organisation or individual investment goals while keeping costs low. This is a service that is offered by top portfolio managers such as Kandon.

To manage portfolios effectively, it’s important to understand how different investments behave under various conditions and how they relate to one another. You also need good tools for analysing data on past performance as well as forward-looking forecasts of expected returns and risks. 

Treasury Management Services

Treasury management services are part of the overall financial management process. It includes managing liquidity, working capital and cash flow, securing funds and maintaining sufficient capital to provide adequate protection to your business. Kandon helps you to manage your cash through treasury management operations so that you can achieve the best possible results while minimizing risk.

Conclusion

The treasury solutions are a great way to improve your earnings on kando.com. We hope that you have found this article helpful and we are looking forward to having you take advantage of the treasury solutions offerings. 

Liquidity management is an important aspect of all the financial decisions that you make. It’s important to keep track of your liquidity and ensure that you have enough money on hand when needed. This can be difficult for small companies but it’s necessary if they want to grow into large corporations. And Kandon is here to help small businesses to achieve this goal. Liquidity management comes with risks but if done correctly, it should never be an issue for any company or investor who understands what they are doing. 

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