Corporate Treasurers Feeling Ill-Prepared

Cash flow isn’t entirely in the control of corporate money managers, according to a new survey from FinServ and consultancy group Hanse Orga. The company published the findings after surveying cash management professionals at a recent conference for corporate finance decision-makers, and according to Hanse Orga, cash management threatens to trip these managers up in the future.

A survey of CFOs, corporate treasurers and other cash management professionals revealed just how challenging managing cash flow is for the profession today.

Among a slew of statistics, Hanse Orga found that 43 percent of these professionals are still using Excel spreadsheets to manage cash flow, either as their only system or as a complimentary system to existing ERPs.

“Apparently,” the company concluded, “standard solutions for cash management do not, yet, fully meet the demands of the market.”

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But there are other key obstacles that are making cash management a friction-rich process for CFOs and treasurers, researchers found.

For example, nearly half of those surveyed said that while their functions have implemented a strong method for reporting and data analytics within the treasury function of their corporations, they also noted that there is room for improvement. Thirty-eight percent reported desiring a more adequate integration of accounting data to manage cash flow.

Not one respondent said they are fully satisfied with their accounting data analytics and reporting capabilities, Hanse Orga pointed out.

These money managers are also expressing anxieties about future challenges.

According to researchers, responses regarding incoming obstacles were relatively evenly distributed between “new regulations, technological development, global markets, corporate growth, low interest rates and volatile exchange rates,” though incoming regulations and technological developments were cited by more than one-third of respondents.

Further, only one-third of respondents reported feeling confident that they could meet these impending challenges head on.

Other obstacles that will be threatening the effectiveness of corporate treasurers and CFOs involve international cash flow operations, researchers noted.

The majority of those surveyed said cash pooling is the main focus of their cash management efforts, and nearly half of those said they remain focused on local or national cash management.

And while 28 percent of these respondents reported operating cross-currency cash management for their international operations, just 4 percent said they have implemented an automated cross-currency cash pooling mechanism, a figure researchers said “indicates that the cash pooling is done in one currency, only in many cases” — a figure that could lead to FX and cross-currency hurdles.

Overall, according to Hanse Orga, corporate treasurers and CFOs are looking to grasp better control over cash flow, implement more efficient cash flow processes and obtain central control over local cash entities.

But with a significant number of corporate finance professionals still stuck on the spreadsheet and with the majority of respondents reporting that cash management is a function within the head office of their company (suggesting that these businesses are already centralizing company-wide cash flow management), Hanse Orga said that today’s treasurers are already anticipating a slew of future challenges. With some hurdles threatening to blindside these professionals and with so few survey respondents declaring that they are fully prepared for these future challenges, Hanse Orga’s research highlights the complexities and the burdens associated with the corporate treasury position of the modern corporation.