Maximizing the visibility of the cash surpluses and shortages in a corporate organization invariably scores highly in industry surveys of corporate treasurers’ priority objectives. Ever since the financial crisis, the efficient management of internal cash has been an important focus for finance management. Cash resources may be used to pay down external borrowing, and finance policy may require that some surplus cash is held in reserve and invested, rather than being recycled into the business. Efficient liquidity management is generally seen as an important measure of corporate health, enabling companies to deploy cash quickly to where it is needed, in support of corporate profitability.
The key to achieving best practice liquidity management is gaining dependable and timely visibility of the company’s cash, so that it can be quickly mobilized to best effect. It is accordingly surprising that many companies report sub-optimal performance in this area, and cash visibility levels as low as 60 percent are frequently seen.
This white paper (Download here) describes the steps that can be taken to achieve a best practice solution in this most important treasury business process, substantially enhancing the available cash resources of the organization, and contributing to enhanced profitability and commercial effectiveness.
The components that need to be implemented to deliver a complete and integrated cash visibility solution are:
- Bank account management
- Bank connectivity
- Cash positioning and reporting
- Cash forecasting
The implementation of each component on its own will result in the realization of several best practice benefits – on the way to achieving optimized cash visibility for the whole corporation.
Best Practice Tools and Facilities
The key to achieving complete cash visibility is enjoying dependable, unbroken access to all the relevant cash flows in the organization’s financial ecosystem. This requires the roll-out of next generation treasury technology, to deliver the necessary functionality to define and control treasury processing and communications, to provide analysis and intelligence, to centrally manage consolidated treasury data, and to generate the necessary reporting. The treasury technology achieves the required connectivity with the organization’s cash management banking partners via a communication hub, to manage the import of bank balance reports, and to process wires effectively and transparently. The third facility is the provision of expert support services, to monitor system and connectivity performance, and to research and repair errors quickly and effectively.
The combination of efficient SaaS technology and bank connectivity with expert and responsive service provision provides the operating environment that enables best practice – and cost effective – cash visibility to be realized in practice.