What is the main goal of liquidity management in treasury practice?

The main goal of liquidity management in treasury practice is to ensure sufficient cash is available to meet the organization's obligations as they come due. This involves monitoring cash inflows and outflows to maintain adequate liquidity levels, which are essential for smooth operations, meeting payroll, servicing debt, and covering unexpected expenses.

Effective liquidity management balances the need to have enough cash on hand with the desire to invest excess funds for returns. However, it primarily focuses on maintaining operational stability through timely access to cash. In a treasury context, this can involve cash forecasting, analyzing cash flow patterns, and seeking funding sources to cover short-term needs.

While enhancing investment returns, improving employee performance, and minimizing operational costs are valuable considerations in overall financial management, they do not align directly with the core function of liquidity management, which is fundamentally about managing cash to meet immediate financial commitments.