Cash is invisible to corporate treasurers

According to the latest "Corporate Treasury and CFO Outlook" survey of 30 corporate finance execs in Australia by BNP Paribas, an often overlooked issue facing companies is just how much cash they actually have in hand, along with how to manage it optimally.  

"One-in-three companies in Australia don't know what the majority of their cash position is," said Chrystie Dao-Szabo, head of cash management sales at BNP Paribas. "Some 30 per cent of them have less than 50 per cent visibility of their actual cash flows and amounts, while another third also have less than 75 per cent accuracy in their cash forecasting."

And while BNP's senior cash management execs asserted that this means a lot of companies do not know their solvency position at any specific point in time, they were equally adamant that cash was not being embezzled or stolen.

Dao-Szabo said: "Many are also not getting the best out of their cash-flows, with half of respondents (53 per cent) 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, noted: "Two-in-three corporate treasurers also report that their boards and management are paying closer attention.

"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," Simao said.