Ask the Agent: Liquidity Management

One of the most common challenges for FP&A and treasury teams is managing liquidity

risk before it becomes a business problem.

When a cash forecast shows a future shortfall, finding the root cause can be

time-consuming, and analysts often need to review multiple legal entities,

investigate cash flow drivers, evaluate funding alternatives, assess

working capital opportunity, and ultimately recommend a course of action to

management. The Board FP&A Agent helps accelerate that entire process.

Rather than simply reporting what happens, it acts as a finance partner and

colleague, helping identify risks, analyze those root causes,

evaluate alternatives, and recommend best actions.

Let's walk through a real liquidity management example with the Board FP&A Agent.

We begin with a liquidity analysis.

The first question any finance professional asks is simple: when does the company

run out of cash? The FP&A Agent immediately identifies that the first negative

consolidated cash balance occurs in week 12 with a closing balance of negative

450,000. It also shows how the position develops over time.

Cash declines from positive 441,000 in week 10 to

264,000 in week 11 before turning negative in week 12.

As an FP&A analyst, that's exactly where I would focus my attention, the point

where liquidity risk first emerges.

The next question is whether this is a temporary issue or a structural liquidity

problem. The agent interprets the trend automatically.

It highlights that a deficit begins in week 12, worsens in week 13,

remains negative in week 14, and then starts to recover from week 15 onward.

The lowest cash position occurs in week 13 at negative

749,000. This tells us we're not looking at a sustained liquidity

crisis. We're looking at a concentrated three-week funding gap with a primary

risk window occurring between weeks 12 and 14.

Once we've established the risk, the next step is understanding where it's coming

from. The FP&A Agent immediately isolates the entities driving the

deficit. Acme Italy contributes approximately negative

267,000, while Acme US South contributes approximately negative

192,000. Together, those two entities

explain virtually the entire consolidated cash shortfall while the remainder of the

organization remains net positive.

Instead of manually tracing balances across dozens of legal entities,

finance immediately knows where to focus their investigation next.

Now that we've identified the two responsible entities, we can investigate what's

actually causing the cash deficit itself.

The agent reviews the cash flow activity for both entities and identifies that

total cash outflows exceeded inflows by approximately

200,000 during that critical period.

It highlights three primary drivers.

Fixed outflows represent the largest recurring burden at approximately 1.8

million.

Investments account for just over one million of discretionary cash consumption.

And variable operating outflows contribute to another 700K.

The agent's conclusion is particularly valuable.

This isn't primarily an inflow problem.

It's an outflow-driven liquidity event occurring on top of an already

weak opening cash position. That's exactly the type of insight that an

FP&A team would need when explaining the issue to their leadership.

Once we've diagnosed the problem, the next question becomes: can we solve it

internally? Before increasing debt or implementing more disruptive actions,

we ask the Board FP&A Agent to evaluate whether cash can be reallocated

across legal entities. The agent reviews the group liquidity position and

identifies potential funding sources.

You can see here that Australia emerges as the strongest candidate because it

remains cash positive throughout the planning horizon with approximately

45K available in week 12 and more than 56K available in

week 13. Mexico is also identified as a secondary source, while

France and Germany are classified as short-term bridge funding options because

their own liquidity positions weaken later in the forecast.

This is exactly how a treasury team would think.

First determining whether the organization can solve the problem internally before

seeking external funding as a secondary option.

The Board FP&A Agent doesn't stop at identifying funding sources.

It also evaluates multiple transfer strategies and quantifies their impact.

The first option is minimum transfer strategy, moving approximately

58,000 into week 12. That reduces the number of negative weeks from

five down to only two and significantly lowers borrowing requirements, but

it doesn't fully eliminate that deficit.

The second option is a buffer strategy.

Additional transfers in week 13 completely eliminate the negative cash position and

remove the need for any incremental borrowing beyond the existing line of credit

draw. The third option is a phased strategy that spreads transfers across

multiple periods and relies more heavily on Australia and Mexico while

minimizing dependency on France and Germany.

Rather than presenting a single answer, the Board FP&A Agent allows finance to

compare alternatives and understand the trade-offs between liquidity protection,

operational flexibility, and execution risk.

But before we commit to intercompany funding, there's another question worth asking

here. Can we improve liquidity operationally?

The Board FP&A Agent evaluates receivables acceleration opportunities by

analyzing customer payment behavior, days sales outstanding, payment

quality, and invoice balances. Customers such as these on the screen

are identified as strong candidates because they combine meaningful balances with

reliable payment histories. Rather than simply recommending collections activity,

the agent prioritizes which customers are most likely to deliver near-term cash

improvement and recommends specific engagement strategies with those customers.

This helps finance focus effort where it will have a great impact faster.

Next, we explore whether discretionary supplier spend can be rephased.

The agent reviews the largest accounts payable invoices during the stress window

and separates critical from non-critical spending.

The Board FP&A Agent then protects strategically important payments such as

payroll, debt service, utilities, core materials, and

forecast cost of goods sold. Instead, it identifies selected supplier

invoices that could potentially be postponed, preserving approximately

$12,000 of liquidity. The simulation shows that payment deferrals

alone won't solve the problem, but they can contribute meaningfully as part of a

broader liquidity strategy. Again, this is a realistic financial

analysis. Not every lever solves the problem, but understanding the

contribution of each lever helps build a complete, comprehensive

response plan. Finally, after evaluating operational and internal

funding options, we assess the bank facility.

The current facility is 300,000 and with 45,000 already

drawn and 255,000 of remaining headroom.

The agent evaluates multiple drawdown strategies.

A minimum draw addresses the immediate week 12 issue but leaves some

residual risk, while a full buffer draw eliminates all negative weeks

but increases carrying costs. A staged drawdown provides the most balanced

solution, protecting liquidity while minimizing unnecessary borrowing and

preserving flexibility. This is the type of analysis treasury teams perform

when deciding how and when to access external funding.

The final step here is where the Board FP&A Agent becomes a true finance partner.

It doesn't simply provide analysis, it provides a recommendation.

What makes this workflow powerful is that it mirrors how an experienced FP&A and

treasury professional would approach a liquidity issue.

First, identify the problem, then understand its severity, find the root

causes, evaluate internal funding options, explore working

capital improvements, assess external financing alternatives, and

finally, recommend the best course of action.

The Board FP&A Agent accelerates every single step of that process.

It doesn't replace finance expertise; it amplifies it.

By combining trusted planning data with AI-driven analysis and

recommendations, it helps finance teams spend less time finding problems and

more time solving them.