We develop a liquidity management model with dynamic agency. The agent controls short-term investment, which affects the current profitability, and long-term investment, which determines the firm growth. The optimal contract reduces liquidity risk facing investors by implementing over-investment in the short term, regardless of the distribution of transitory and permanent shocks. Cash-poor firms behave short-termist and provide only accounting-based incentives. In contrast, cash-rich firms focus on long-term capital investment and exclusively use equity-based compensation.​