Preview of Upcoming Cash Management and Cash Visibility Research  

⇨ Robust cash management governance is critical to avoiding operational risks 

⇨ Organizations prioritizing sustainable cash operations are emerging more resilient  

⇨ Cash management solutions are key technology for SAPinsiders to support finance and accounting strategy 

In the upcoming Cash Management and Cash Visibility benchmark report due for publication on June 30, 2022, we’ll explore the cash management function, automation priorities to support cash visibility, and the collective insight of our SAPinsider community. We’ll look at strategy and innovation trends of SAPinsider organizations, as it relates to their needs for cash management and cash visibility in the current operating environment.   

The current financial climate is unpredictable, so it is more important than ever for SAPinsiders to clearly understand their organization’s cash position. With so many different factors driving uncertainty, having a good handle on cash flow is essential for making sound decisions.   

Lack of Cash Visibility 

Often treasurers lack the necessary cash visibility to give them a clear picture of their organization’s entire cash situation. This can make it difficult to assess risk and make informed decisions about allocating resources appropriately. Moreover, a lack of visibility into current cash holdings can lead to severe issues, including supply chain disruptions exacerbated by inflationary pressures and other unforeseen risks.   

Working with multiple banks across different markets and encountering complex bank connectivity issues can make it difficult to get an aggregated view of an organization’s total cash position. Finance and accounting teams need access to technology to help them overcome these challenges and gain greater visibility into their organization’s cash situation. Survey respondents from our SAP S/4HANA Finance and Central Finance benchmark report identified cash management and treasury solutions as a top 3 three technology currently in use to support finance and accounting strategy, 

SAP S/4HANA offers cash management capabilities that provide “cash visibility” across the organization for SAP customers. These capabilities allow organizations to manage accounts, monitor bank fees, and review bank relationships. In addition, the integration of bank statements into SAP S/4HANA provides a comprehensive view of cash positioning, enabling cash flow reconciliation. 

Avoiding Cash Management Risks 

A lack of accurate forecasts and outdated data often leads to poor business decisions, resulting in increased financial risk. For example, with limited cash visibility and forecasting capabilities, a company might be more likely to make short-sighted investment decisions or pursue unfavorable foreign exchange hedging strategies. Additionally, perhaps even more troubling is that these mistakes could ultimately lead to risky merger or acquisition activity. SAP Fiori apps in SAP S/4HANA provide user-friendly views to forecast liquidity and analyze actual cash flow. 

Cash management is a complex process that requires careful planning and execution. But with the right tools and approach in place, organizations can effectively manage cash to help ensure that an organization has the funds it needs to meet their financial obligations.   

What Does This Mean for SAPinsider? 

Minimize the risk of strategic missteps with proper cash governance. While there are many different reasons to prioritize effective cash management processes in your organization, perhaps the most critical is its impact on your overall strategic decisions. Having accurate and up-to-date information about cash flow and liquidity can help treasurers identify when their organization has more or less cash available than it needs, allowing them to make informed choices about how best to use that cash. Additionally, by understanding the intricacies and risks of cash management, treasurers can proactively work to mitigate those risks and ensure that their organization’s financial position is as strong as possible. 

Explore solutions that enable cash visibility. The recent economic downturn has made it clear that effective cash management practices are crucial for any organization. During periods of uncertainty, companies that are less prepared can struggle mightily, and even face collapse. This underscores the importance of technology solutions that provide visibility into an organization’s cash position. Bank connectivity tools, for example, simplify access to multiple banks across different markets and provide a centralized view of transactions. This is essential for making informed decisions about where to allocate scarce resources. 

Focus on cash excellence is critical for ensuring long-term success. This is especially true for businesses that rely on a complex network of global suppliers, as they must be prepared to deal with vendor payment issues, supply shortages, and other challenges that could impact their operations. Companies that have taken proactive steps to improve their cash visibility and control in good times are much better equipped to navigate these difficulties. 

Take the survey here to share your experience and gain insight from your peers.