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Complex multi-banking and reporting challenges hinder corporates’ view of cash

Fewer than one in 10 UK corporates have a real-time view of their cash balances, according to a report published today.

The EMEA Operational Index analyses the transparency of cash movements made by the top 1,000 corporates across Europe the Middle East and Africa (EMEA) ranked by revenue. It found that only 9.1 per cent of UK corporates have a real-time view of their cash balances, with only 8.3 per cent able to forecast cash flow in real time.

The index is based on interviews with 350 CFOs and corporate treasurers and is compiled by Cashfac Technologies and East & Partners. The results are due to complex banking relationships and reliance on inadequate multi-bank systems that hinder real-time views of operational liquidity, say the researchers.

Alastair McGill, managing director at Cashfac, said: “The challenges facing the corporate treasurer are significant but accepting the status quo and failing to achieve a clear line of sight into the enterprise’s cash position injects risk and cost that most firms are keen to drive out of their business.”

The report also found that:

  • EMEA corporates have as many as 17 bank relationships; many more than in other regions such as Asia;
  • there is a powerful need for treasurers across the EMEA region to lower the contingent risk for their organisations in not having accurate real-time cash management in place;
  • UK corporates report having greater control over transactions across time zones and multiple banks relative to their EMEA peers; and
  • corporates feel that bank understanding of their businesses and the industries they work in needs to be improved.

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This item appears in the following sections:
Cash & Liquidity Management
Global Cash Visibility
Liquidity Risk Management
Cash Flow Management & Forecasting
Cash Flow Forecasting