What is cash visibility?

Introduction to cash visibility

Cash visibility is the ability to accurately track, monitor, and understand the movement of cash across your organization. It requires a comprehensive view of your cash balances, cash flow, and other cash-related activities. And it helps ensure better decision-making, improved liquidity management, and enhanced risk mitigation.

Establishing cash visibility is often one of the first tasks that a new or recently hired treasury function is expected to perform since it is a prerequisite for many other activities within treasury management.

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Importance of cash visibility

Cash visibility should underpin every financial decision. Without it, it’s impossible to achieve effective cash management or financial reporting at a basic level. Below are some of the key activities that cash visibility enables.

Decision-making: Cash visibility lets you make informed strategic decisions. You can identify surplus cash to be invested, find optimal ways to manage debt, and allocate resources for future growth initiatives.

Liquidity management: Effective cash visibility ensures you have enough funds to meet your operational needs and financial obligations. By understanding your cash positions across different accounts, currencies, and regions, you can address liquidity gaps and reduce your reliance on external financing.

Risk management: Cash visibility can help you detect anomalies or discrepancies. In doing so, you’ll spot potential risks in plenty of time to act, safeguarding your assets and ensuring financial stability.

Compliance and reporting: You can’t meet regulatory compliance and financial reporting requirements without accurate and timely visibility into your cash positions. Cash visibility is essential for complying with accounting standards, and tax regulations, reducing the risk of fines and penalties, not to mention reputational damage.

Optimizing your working capital: In addition to identifying surplus cash to be invested, cash visibility will help you optimize your payment terms with suppliers and customers. This, in turn, will enhance your cash conversion cycle and improve your cash flow efficiency, strengthening your overall financial performance.

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How to enhance your cash visibility

The more streamlined and automated your cash management, the easier it is to achieve global cash visibility. Here are a few ways to enhance your cash visibility.

Centralize your cash management: Cash visibility is much easier if you can see everything in one place. Integrating data from bank accounts, payment systems, and ERP systems into a single treasury management platform will give you a holistic view of your global cash positions.

Partner with a modern treasury platform: The right treasury management system will make it easy to centralize your financial data and payments in one place so you can see your cash positions across multiple bank accounts in one dashboard. This not only facilitates real-time data aggregation and reporting, it also reduces manual errors and improves data accuracy.

Consolidate bank accounts: Reducing your number of bank accounts won’t just simplify cash visibility, you’ll also streamline your reconciliation and reduce your administration overheads. 

Standardize your cash reporting: By standardizing your cash reporting formats, metrics, and KPIs across your organization you’ll ensure the consistency and comparability of your cash visibility data. Stakeholders will be able to access information easily, track performance, and make informed decisions.

Improve internal communications: Good communication between your finance, treasury, accounting, and other teams is essential for maintaining good cash visibility. Easy access to relevant information is vital to coordinate efforts and ensure successful cash management. 

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Key considerations for cash visibility

Cash visibility is essential to the financial health of your organization. But it’s not without its challenges, both in terms of achieving true visibility and ensuring your data remains secure. Below are some potential pitfalls and how to avoid them.

Data fragmentation: Scattered data sources, siloed systems, and manual processes can make cash visibility hard to achieve, leading to data inaccuracy and delays in reporting. You can mitigate this by centralizing your data into a single system.

Regulatory compliance: Data privacy laws and financial regulations change all the time. Your cash visibility initiatives must be underpinned by systems that adhere to the highest privacy and security, protocols. And you must have robust compliance and risk management processes in place.

Security risks: Any data stored in the cloud is at risk of attack. So it’s vital to ensure you have strong safeguards such as encryption, both during data transit and when it’s at rest.

‍Cross-border operations: If you’re operating across multiple jurisdictions, you’ll face additional challenges related to currency fluctuations, tax regulations, and cross-border cash movements. You’ll need a solution capable of managing cash across different regions while keeping things simple for your team.

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How Atlar can help you achieve cash visibility

With its robust bank account management features, the Atlar provides a 360-degree view of your company’s cash. Atlar offers full bank connectivity through channels like SFTP and Swift, native ERP integrations, and real-time API connections. The platform connects to wherever your company manages its money, meaning no siloed systems or missing data.

Once connected, Atlar continuously receives and standardizes financial data in real time. The result is that all cash balances and transactions – across all bank accounts, currencies, and business entities – are consolidated in one platform and visible at a glance. You can easily drill down to see the full transaction details, view your cash balances at any point in time, and track your cash flow over any time horizon. Explore our cash positioning and cash reporting features to learn more.

Alternatively, you can request a 30-minute demo with the Atlar team to see the platform in action.