See, control, optimise: The importance of global cash visibility

Whether you are a chief financial officer, group finance manager or hold any other senior finance or treasury role, it is expected you are the cash expert.

Quite simply, they need to know how much their organisation has at any given time – as well as both their payables and receivables. Often, however, one of the core elements of the job – strategising and using your cash wisely – is overlooked or simply becomes a near-impossibility.

Because of the way many businesses function when it comes to banking operations, establishing a concrete global cash position simply falls by the wayside. Financial teams spend half their working hours logging in to a series of clumsy, archaic banking portals which, thanks to disparate subsidiaries, do not guarantee an accurate global cash position.

In fact, the reality of it is businesses may well have millions of pounds hidden, so to speak, down the side of the sofa. Securing total visibility can help finance teams locate and utilise working capital and is best broken down into three intertwined categories: see, control, and optimise.

See: the importance of knowing your global cash position

When you are leading multi-national banking operations of any scale, knowing your global cash position is vital.

Your current set-up may well be serving you well enough, or so you think. You are conducting global banking operations, but behind the scenes it’s sticky tape and plasters.

Increasing numbers of businesses are opening their eyes to the litany of mind-numbing manual processes grinding their banking operations to a near-halt. The first half of a CFO’s day, for example, is likely spent awaiting data from colleagues who are desperately compiling cash data from a variety of independent banking portals.

Members of a Group Finance Function – who do not have direct access to their banks or data – often only see their global cash position at month-end, meaning entire banking operations are run on a 30 to 60-day time deficit.

All of this serves to undermine a businesses’ number one concern: how much cash does it have.

Control: dealing with risk and fraudulent activity

With increased visibility, controlling your working capital becomes a considerably easier feat.

Fraud – and wider security issues – remain one of the most prevalent pitfalls plaguing global banking operations, preventing total cash control. Contrary to what is widely believed, though, internal risk and fraudulent activity is the bigger concern for the corporate treasurer than cyber-criminals.

It is up to a businesses’ security teams to guarantee external protection, but internal issues can create a sizeable splinter in your global banking operations. Human error, for example, is a ubiquitous issue.

Say a payment gets sent to a client twice. Not impossible, given a businesses’ global cash position is likely muddied and unclear. With no clear means of managing payments or forecast, a duplicate payment seems like an inevitability. Some businesses would not worry, assuming they would get the money back eventually.

While this is true in most instances, the temporary shortfall that may result from human error is enough to impede both a businesses’ personal workflow and their banking operations. They may enter an overdraft, incurring more unnecessary fines through accrued interest.

Optimise: how centralising bank visibility supports daily cash forecasting

As mentioned previously, having total visibility is one thing, but knowing what to do with it is another. A business cannot utilise what it cannot see.

Who needs paying today? Who owes the business  money? What happens when all seems said-and-done until a final accounts payable ping comes in, sending the business unexpectedly into its overdraft? It is not just about your current global cash position – it is about forecasting.

By midday, a business needs to know what the cash forecast is. If it is in a surplus, there exists a cut-off point at which the finance team can choose to strategically invest. Should you be in shortfall, a cut-off still exists that determines when the team can opt to source extra cash.

This cut-off point means that while a business is waiting to receive an approximate cash position post-banking portal faff, the window to maximise the benefits of its cash visibility is slimming. There may only be a short amount of time for a finance team to decide whether it is best to sweep cash into investment funds overnight, further invest, or explore the variety of other options available with your working cash.

Effective daily forecasting also means actualisation can be tracked significantly more easily, meaning expected payables or receivables which no-show can be investigated and resolved much faster.

With both visibility and control over their global cash position, businesses’ can turn hope into certainty. And banking operations without the need to rely on overdrafts.

Who can help me see, control, and optimise my cash?

As becomes apparent, there is a lot that goes into simplifying global banking operations.

Between the vitality of increasing a businesses’ cash visibility, the necessity for a reduction in manual processes, and the associated importance of high-level strategising and forecasting, it can seem like a lot to handle – especially if a business lacks a dedicated treasury team.

Put simply, using banking portals and localised processes is no longer a justifiable workflow for a business conducting large-scale banking operations.

AccessPay recognise this, and instead provide instant cash visibility – no matter the number of accounts or subsidiaries – through our cloud-based system and Cash Management solution. In other words, we can help businesses’ ‘See, Control and Optimise’ their cash – read our full companion article here to find out more.

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