“One-in-three companies in Australia don’t know what the majority of their cash position is,” says Chrystie Dao-Szabo, Head of Cash Management Sales at BNP Paribas. “Some 30% of them have less than 50% visibility of their actual cash flows and amounts, while another third also have less than 75% accuracy in their cash forecasting.
“This means a lot of companies do not know their solvency position at any specific point in time!
“A third also say their cash forecasting is keeping them awake of a night, according to our latest Corporate Treasury & CFO Outlook.”
Mrs Dao-Szabo adds: “Many are also not getting the best out of their cash-flows, with half of respondents (53%) allocating their surplus cash to traditional bank deposits. As a result, many corporates are losing money by not making their cash work better for them”.
Filipe Simao, Head of Client Advisory at BNP Paribas in Europe, notes: “Two-in-three corporate treasurers also report that their boards and management are paying closer attention to cash management and liquidity.
“Half (54%) reported that meeting compliance and regulatory requirements takes between 10-30% of their day, while for one-in-five respondents it takes between 30-50% of their time. It is unlikely that reporting pressure will decrease in the near future; rather it is becoming part of the ‘new normal’.”
Mr Simao notes: “There is a mismatch between the importance placed on cash management and the confidence level of treasurers in their cash visibility, forecasting and processes – which shows a clear need for corporates to enhance their cash management.
“Globalisation, increasing regulations and market volatility is putting increasing pressure on CFOs and treasurers to improve their cash management. As a result, we are seeing a growing interest in cash management efficiency.
“Treasurers are increasingly becoming the bankers of their organisations. Some are even looking at setting up an in-house bank or at least partnering more with their banks.”
Read the Corporate Treasury & CFO Outlook here.