Strategies for optimising cash management in times of rising financing costs

With the rising cost of debt, optimised cash management is critical for organisations. Eight Advisory identifies four key levers to activate:

• promoting a cash culture throughout the company
• optimising cash flow
• reducing trapped cash
• safeguarding financial results through sound interest rate risk management.

A strong cash culture is based on sensitising all employees to the impact of their operational decisions on the company’s cash position. This approach requires a coherent strategic implementation at all levels of the organisation. It enables better collection processes, optimised purchasing and tighter inventory control.

Optimising cash circulation helps to avoid unnecessary financing requirements. This requires the use of tools such as cash pooling and treasury management systems that facilitate the centralisation of information and the coordination of cash flows.

“The treasurer  orchestrates all cash flows to ensure that liquidity is in the right place at the right time,” comments Mathieu Cascallana, Partner at Eight Advisory.

In countries with restrictive regulations, the reduction of trapped cash can be achieved through regular dividend payments or intercompany service fees.

“In the longer term, localising as many costs as possible within these subsidiaries—by relying on expatriates and procuring local goods and services—will help reduce trapped cash,” explains Mathieu Cascallana.

Implementing a well-defined interest rate risk management policy helps to secure financial results over a targeted horizon (budget/business plan) and avoid unexpected market influences.

With these 4 levers, companies can turn the constraints of uncertain economic environments and contexts into performance-enhancing factors.

Read the full version of this article by Mathieu Cascallana, Partner at Eight Advisory published in Option Finance on May, 6 2025 (available in French).