Cash visibility and cash flow forecasting now a priority for Asia Pacific treasurers

Cash visibility and cash flow forecasting now a priority for Asia Pacific treasurers

According to this year’s Asia Pacific Treasury Management Barometer survey, commissioned by Bank of America Merrill Lynch and SunGard, treasurers in this region are prioritising the improvement of cash visibility and cash flow forecasting.

The study reviewed answers from over 1,350 treasury professionals from across the Asia Pacific region and revealed how the treasury landscape is evolving when considering liquidity management, transactional FX, trade finance and treasury technology.

In the past, cash visibility has been a concern for many survey respondents and this year, 21% felt that it was a requirement due to the range of banking relationships, the large number of accounts and different ways of accessing account information.

Talking about the survey, Ivo Distelbrink, head of global transaction services in the Asia Pacific for Bank of America Merrill Lynch said: “Visibility and control over cash balances remains the holy grail of treasurers across the region. Concurrently, consistent with our conversations with clients across the region, the push for enhanced visibility over balances comes with more extreme challenges in Asia Pacific, given the large number of banking relationships, accounts and regulations in place,” Distelbrink said.

11% of survey respondents said that process automation, working capital optimisation and risk management were also priorities for this year. These cash and treasury processes are more challenging in this region because of the use of cash and paper instruments and restrictions on cross-border flows in some countries and currencies. In addition to this, modern treasury functionalities have not been available in the Asia Pacific region for as long as in Europe and North America, but this is rapidly changing.

Steve Evans, chief operating officer of treasury and payments at SunGard says that treasurers in this region are concentrating on working capital and liquidity management. “Treasurers are well-placed to support working capital optimisation due to their pivotal role in liquidity management, and expertise in centralising financial processes with a high level of efficiency and control,” Evans said.

The study also found that 49% of participants have a treasury management system (TMS) or a treasury module in place as part of their enterprise resource platform (ERP).

Senior vice president of corporate liquidity sales at SunGard, Ash Khalek, said that treasurers are focused on technology in order to become more efficient. “With a third of respondents already using hosted and cloud-based (or SaaS – software as a service) solutions for treasury management, treasurers recognise the role of these solutions to “leapfrog” legacy technologies and achieve rapid implementation of a best-in-class treasury technology infrastructure,” Khalek said.