Liquidity Analysis and Liquidity Planning

One year ago, when PORTOLAN started developing its recent tool “LAP” – Liquidity, Analysis and Planning” nobody could forecast the beginning of the global financial crisis and its disastrous effects. But very soon after release of the new module we realized that timing and scope of supply could not have been selected in a better way. In the meantime, sustaining and ensuring liquidity is the need of the moment for many mid-sized enterprises (which mustn't or cannot ask the German government for a loan guarantee).This requires a sustained status of liquidity which can be created in ever shorter cycles. Today, it is impossible to evaluate the liquidity of a company manually or by using a spreadsheet program due to the complexity of the basis of immense data material.

Liquidity forecast

Whether it is a due-day related determination of the respective current payment pattern of the customer, the automatic elimination of non-relevant "outliers" and long-running uncollectibles, the assessment of current order volumes of customers and vendors, a forecast of incoming and outgoing payments based on open items and budgeted values - each process must be carried out immediately and in a rolling way in order to obtain a realistic evaluation of the company's liquidity. The presentation of our product LAP within the PORTOLAN Customer Forum in October 2008 and first direct contacts as well as initial installations at customers clearly pointed out that there is a big need for action, respectively a backlog demand within this area. Not only corporate managements ask for more transparency on that sector, but also chartered accountants as well as banks are emphatically asking today for a suitable tool in order to plan and guarantee liquidity. As time is short and you have to act without delay, there is little scope left for starting some long and time-consuming implementation projects concerning such a tool. The high level of integration into PORTOLAN’s financial accounting has soon turned out to be a “blessing”. Only a few hours after installation of the product first reports analyzing the liquidity are available for the user and he can start with the planning of important “cash positions” immediately.

Annual budget/details