Overcoming Complexity In Cash Management: A New Report

Peter David

secBusinessman with a digital tabletThe European Union has been a tremendous economic, cultural, and political success. It has brought a very diverse group of nations together under a common currency and integrated governance.

But for those of us who manage our corporation’s finance function, it has also increased complexity. Because of recent changes in EU oversight, the regulatory and legal requirements on issues such as profits, cash, and taxation are far more complicated than they were just five years ago.

That’s the conclusion of a worldwide financial survey conducted by CFO Research and sponsored by SAP in June 2015.

A global study

Researchers contacted senior finance executives around the globe to find out how they are preparing to overcome the next generation of obstacles in cash management. Many roles were represented, including CFOs, treasury analysts, SVPs of finance, and controllers.

European respondents came from four of the largest EU nations: France, Germany, Spain, and the UK. Apart from Spain, these countries are also among the 10 largest economies on the planet.

Top takeaways

I’ve read the full report, “Next-Generation Needs for Cash Management,” which provides a complete list of the insights into what cash managers are facing right now. Among the top takeaways are:

  • Manual intervention: Six out of 10 treasury executives agreed that they regularly use an excessive amount of manual intervention to develop accurate views of their company’s cash position and to forecast future actions across all business units. This is a substantial waste of executive time and a drain on potential profitability.
  • Cost pressures: An overwhelming majority (84%) reported that their organization’s treasury function is now under greater pressure than ever before to reduce operating costs. More than half of respondents (56%) attributed the pressure to being under-resourced and projected that they will require additional resources within the next two years.
  • Technology complications: Almost half (48%) of execs say that their current array of point solutions and ERP systems within the finance function are complicating matters. They see a need to improve their IT infrastructure and develop a single source of truth for cash accounts. For another 12% of EU execs, this problem is more acute and demands substantial improvements – especially due to increased foreign exchange volatility across the region.

The CFO mandate

CFOs and other treasury executives see a new mandate emerging based on market conditions and competitive pressures.

They feel compelled to ensure that their organizations have adequate liquidity so that growth and innovation are not a drain on system resources. And they feel a need to reduce exposure to financial risks, including the risk of not acting fast enough.

At the same time, most respondents say that their companies’ information systems and tools for cash management are not adequately equipped to handle the Big Data requirements that will enable them to act quickly.

A simple solution

If your organization is running incompatible systems, you are wasting a tremendous amount of time and resources moving and normalizing data. Imagine how much more agile you could be with a single architecture that could manage libraries for predictive, planning, text processing, spatial, and business analytics.

Then consider the SAP Treasury and Financial Risk Management application, which helps your organization gain greater insight and control over complex processes for managing cash, liquidity, risk, and compliance – while integrating financial reporting with SAP software.

Read the report

If you’d like to download the complete report, click on the link below. I think you’ll find it valuable reading. In addition, you can drop by the Finance Solutions Hub for a rich library of resources on simple finance solutions from SAP, and view videos and reports here.

For the full report, please click on Next-Generation Needs for Cash Management. 


Peter David

About Peter David

Peter David has been regional chief financial officer of Europe Middle East and Africa at SAP since December 2014 and served as its chief financial officer of Latin America and The Caribbean from September 2012 to July 2013. Mr. David established a strategic direction and oversees its financial and operational activities region-wide. He joined SAP in 1995 and served as its chief financial officer and chief operating officer in the past.