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Cash & Liquidity Management
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Moving from Fragmented to Centralised Cash Management

by Mickey Vonckx, Head of Sales Europe, Hanse Orga International

This article outlines the benefits of real-time, centralised cash management, and how it can be accelerated and optimised with the help of specialised technology.

Driving financial efficiency and managing risk are top priorities on the treasury agenda. Many companies lack a central overview of their cash, and are therefore facing unexpected idle liquidity which introduces significant inefficiencies. The fragmented information about cash and financial transactions do not allow for an accurate view on the company’s exposure. The most efficient remedy for such a situation is central cash management.

The challenges

It can be particularly challenging for treasurers of large corporations with many subsidiaries to keep track of important financial information. They have to account for the various cash flows, payment flows, and cash positions of each subsidiary, as well as the total numbers of company bank accounts. Often, when these treasurers require a real-time view of the company’s cash situation, it triggers lots of parallel manual activities by various departments and local entities. Employees will have to update spreadsheets with the latest figures and to modify planning data before the requested information is forwarded to the head office. These fragmented manual processes easily introduce errors or inconsistencies and it takes time before the cash positions and forecasts are populated. As more and more banking information becomes available in real time and business environments become increasingly complex the challenge for cash managers grows quickly as well.