November 2022 - Saving, as a rule, is a disciplined practice aimed at achieving specific personal goals. But when it comes to the corporate environment, companies set multiple short-, medium- and long-term objectives, the most important of which is invariably the ability to generate and maintain a healthy cash flow to meet their most immediate operational needs and finance their long-term growth plans.

According to Agnallo Nampunda, Treasury Director at FNB Mozambique, this is a crucial distinction for the business community to keep in mind, as the business model of treasury management is, by its very nature, very different from individual savings habits.

"The differences between the various types of business make it impossible to adopt predetermined yet flexible rules for effective liquidity management. However, they share a common goal: business profitability," explains Agnallo, "although companies spare no effort to be profitable, they can raise their success to higher levels through efficient cash management, investing their cash reserves or surpluses in interest-bearing accounts until the funds are needed."

Agnallo says that achieving this optimal state of cash management requires managers to stay in tune with the current and future cash needs of their businesses. They then need to effectively combine a range of savings and investment solutions that serve their purpose for a continuous and fluid movement of funds. This type of diversified cash management approach using various solutions is, in fact, a relatively simple business discipline to put into practice and the resulting benefits for the sustainability of the business are invaluable.

Although the way to optimize liquidity may differ from business to business, Agnallo says that the fundamentals are fairly universal, namely, separating the day-to-day transactional account from the investment account helps companies and individuals optimize returns and manage short- and long-term cash needs. "Many of our successful business clients have subscribed to several liquidity management solutions at the same time, from a transactional account for day-to-day operations to a money market, which is a combination of term deposits for expenses and long-term investments."

"Considering the significant interest our clients earn, it's easy to see why many of them include savings accounts in their diversified approach to cash management, and the financial discipline they develop within the business is often even more valuable," he explains.

By simply running a separate account for liquidity management and another account for day-to-day transactions, companies can reduce the risk of being faced with unsustainable future expenses, such as paying VAT or salaries, and may not have enough funds to cover them."

Agnallo explains that FNB offers a number of affordable solutions that allow its corporate clients to achieve this level of optimized cash management. All of FNB's business savings accounts are savings instruments with no opening costs, which means that our clients can open as many accounts as they need to effectively manage their funds at no cost. In addition, our Clients can name their accounts as they prefer, thus clearly reserving each account for the purpose of optimizing cash flow in the long or short term.

"We have seen time and again the positive effects that well-structured, diversified cash management brings to our Corporate Clients," he says "We work tirelessly to instill an understanding of the value that small, disciplined cash management measures taken today can mean for long-term growth and the future sustainability of the business."