Here are some duties of a cash manager:
Cash management is vital for establishing and maintaining financial stability in a business. Cash flow management requires regular reporting and a good grasp of finances. Without it, the company could be in a liquidity crisis. Managing cash flow takes time and requires attention to detail, and it is critical to the company’s success for:
These are the problems faced by treasury leaders in cash flow management:
Poor global cash visibility:
Companies need high cash visibility to make decisions. Data distributed across TMS, ERPs, bank portals, and sales order systems limits visibility. Non-standard processes can also result in erroneous forecasts, resulting in low visibility.
The following factors reduce the accuracy of projections:
As a result, CFOs need to rely on outdated data that preventing from making effective decisions.
Low frequency of forecasting and variance analysis:
Treasury spends a lot of time on manual data extraction and cash forecasting. So, it’s challenging to increase the frequency of cash forecasting and variance analysis.
Lack of security:
The treasury is more vulnerable to cyber threats from manual systems and processes. In addition, low visibility impedes risk management.
Increased cash buffers:
Increased cash buffers and improper use of idle cash lead to lost opportunities in value creation. Treasury personnel cannot use excess cash for M&A or investment without knowing how much idle cash they have. Thus the ROI would decrease.
Higher borrowing costs:
Legacy systems cannot capture the amount of cash on hand and line of credit. Hence, companies are more likely to borrow money late and pay higher interest rates.
Automated cash flow management services simplify the treasury processes by reducing manual duties. This allows financial professionals to focus on liquidity and risk management, improving team efficiency.
A recent McKinsey study shows how technological changes are helping businesses grow:
What are the features of cash flow management automation?
These are the features provided by cash flow management automation that help treasury leaders:
Uses of constant cash visibility:
Uses of automated data gathering:
Uses of intercompany and notional pool balances:
Uses of bank reconciliation:
Bank reconciliation identifies differences between the accounting records and the bank statement. Hence, it helps spot fraudulent activities to protect companies.
A $10M tech firm was facing these challenges in cash management:
After using the HighRadius cash management solution, they were able to get these benefits:
Treasury leaders seek these benefits to overcome their cash management hurdles. Schedule a demo to learn how to use cash flow management automation to meet your goals.
The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.