Securing liquidity with IT and through IT

published on 20 March 2020 | reading approx. time 3 minutes

It can not be denied. The most urgent task, apart from the health of all, is to secure liquidity in order to survive the upcoming difficult phases essentially unscathed. Short- and medium-term liquidity outflows must be avoided. And incoming payments must be generated. IT can support you in both tasks.

IT is involved in this issue in two ways. On the one hand, it is the focus of liquidity-securing measures and on the other hand, it may be an instrument for discovering liquidity cushions.
  

IT in the focus of liquidity protection

It's no secret. Within IT there are no longer needed assets and at the same time expense drivers, which lead to liquidity outflows. These assets and expense drivers must be identified.

Several sources can be ideally (not conclusively) analysed:

• With the instrument of license measurement, used and unused or over-licensed
  license agreements can be identified and unnecessary payment flows prevented. It may even be possible to generate revenues at the level of "used licenses".
• This license measurement sounds complex at first, but it is not by using technology (agents).
• With the instrument of data analysis, storage utility can be identified which indicate excessive cost structures within the storage requirement (on prem or in data centres). In this way, pending expansion orders can be avoided or ongoing storage costs reduced.
• With appropriate monitoring tools, zombie servers can be identified to avoid external or internal costs (support, operating and licensing costs).
• By checking the service levels of IT service providers by contract, the service levels can be adjusted to the minimum standard if necessary, thus reducing the costs for IT service providers. If necessary, services can be waived altogether or in the long term.
• The same check can also be applied in a structured manner to certain other cost types (telecommunications, energy, insurance, maintenance, etc.).
• A contract review in the direction of IT customers can also be used to question whether the service side still matches the revenue side. If necessary, revenues can be increased.
• By analysing intercompany services, the question could also be directed towards internal services.
• By homogenizing the IT landscape, by merging systems with the same functions and by increasing the degree of digitalization of business processes, savings can also be achieved in the medium term in the areas of personnel and administration costs, as well as operating and licensing costs. Planned and budgeted projects in these areas can be brought forward and possible free personnel capacities can be used.
• Etc.

If resources are not available in your own company, use our competence from auditing and consulting in the field of IT services.

Securing liquidity through IT deployment

IT and the data embedded in it are the mirror image of the company. It is not without reason that we are increasingly and in some cases almost exclusively analyzing only the data and data streams of a company, for example in the context of the annual audit.

This data can, of course, also be used to secure liquidity - especially throughout the Group.

Examples of analyses in the area of liquidity are:

• Analysis of the age structure of open items and thus prioritized dunning.
• Analysis of first, second and third degree liquid funds.
• Analysis of recurring postings according to expense types such as memberships, allocations, contributions, etc. and analysis of whether these expenses can be reduced.
• Avoidance of unnecessary purchase orders by analyzing the release strategy and order limits.
• Examination of payment conditions and their optimization.
• And much more.

Examples of the use of analyses to avoid financial losses due to an internal control system weakly implemented in the ERP system are:

• Ongoing analysis of bank data changes
• Analysis of supporting documents with the risk of double payment
• Analysis of actions that uncover fraudulent actions in purchasing or sales (discounts, credits, cancellations, etc.)
• Creation of new creditors and transactions by unusual users
• System check of the ERP system for ongoing security
• And much more

Both approaches raise the question of how this task should be tackled even more under the current load? Take advantage of our competence and technical instruments to obtain the results of your internal control system promptly and continuously.