Liquidity Planning: What Really Matters
Liquidity planning is the key to steering your company safely through turbulent times. Even high sales are of no use to you without sufficient liquid funds. However, many entrepreneurs underestimate how quickly liquidity bottlenecks can arise – especially during strong growth or in times of crisis.
In this article, you will receive practical tips on how to implement your liquidity planning efficiently, strategically, and proactively – with examples, tools, and checklists.
1. Liquidity – what exactly is it?
Liquidity is the ability of a company to meet its short-term payment obligations at any time and without delay. Short-term means that the company must meet its payment obligations within a year. High liquidity is therefore crucial for the survival of a company.
There are different types of liquidity planning that vary depending on the company’s objectives. Operational liquidity planning deals with the question of how the company can meet its short-term payment obligations without bottlenecks. Strategic liquidity planning, on the other hand, deals with the question of how the company can design its liquidity to ensure it has sufficient funds in the long term to achieve its goals. Good liquidity planning is therefore crucial to the success of a company. It not only helps the company meet its short-term payment obligations but also ensures that it has sufficient funds in the long term to achieve its goals.
🔗 More on the key figure Liquidity 1st Degree →
2. The Importance of Liquidity Planning for Companies
Liquidity planning is an essential part of corporate financing. It aims to forecast the company’s future liquidity and ensure that the company has enough funds to meet its obligations. Good liquidity planning is crucial for the smooth functioning of a company. It helps the company avoid financial bottlenecks and ensures that it has the means to meet its payment obligations.
A liquidity planning usually includes a forecast of the company’s future income and expenses, as well as an analysis of the company’s short- and long-term financing options. The plan should be regularly reviewed and adjusted to ensure that it meets the company’s current needs.
🔗 Learn more about Treasury Management →
3. The 5 Most Important Aspects of Liquidity Planning
1. Fixed Payment Plan
Consider all regular revenues and expenses such as rents, wages, lease payments, and tax prepayments.
2. Variable Costs
Plan fluctuating items such as raw materials, advertising, or energy costs realistically – they have a big impact on your short-term solvency.
3. Reserve Formation
Create liquidity reserves to buffer seasonal fluctuations or unexpected expenses (such as repairs).
4. Sales and Scenario Planning
Work with realistic revenues but also calculate pessimistic scenarios. This way, you are prepared for failures.
5. Flexibility & Early Warning System
Rely on a rolling planning model that you update monthly. Complement it with KPIs such as defaults, cash balance, or receivables turnover.
4. Conclusion: How to Successfully Plan Liquidity
Step-by-Step Guide to Professional Liquidity Planning
Here’s how to proceed in a structured manner:
-
Analyze your current cash flows
-
Create a liquidity plan for at least 12 months
-
Plan regularly on a rolling basis, not statically
-
Use tools or Excel templates (e.g., cash flow sheets)
-
Monitor plan vs. actual deviations monthly
-
Act early, if your liquidity buffer falls below a critical level
🔗 Overview of Controlling Tasks →
Common Mistakes in Liquidity Planning
❌ Confusing sales with liquidity
An order generates sales – but only when it’s paid does it generate liquidity.
❌ Ignoring payment terms
Slow payers among customers + short payment terms with suppliers = risk factor.
❌ Underestimating reserves
Spontaneous investments or additional payments can trip you up without a buffer.
Conclusion: Your Next Steps to Better Liquidity Planning
A proactive liquidity planning is more than just number-crunching – it is your navigation system through financial flows. Those who plan and review regularly remain capable of action – whether in growth, order downturn, or financing projects.