Cash Forecasting is ‘Achilles´ Heel’ of Asian Treasurers, Says Reval

While 90% of Asian treasury professionals recently polled in Hong Kong and Singapore indicated that they were dissatisfied with their ability to forecast their cash positions, making liquidity and funding risk a top concern, only 7.5% identified operational risk as an area worth their attention, reports Reval, a provider of software-as-a-service (SaaS) solutions for treasury and risk management (TRM).

“Cash flow forecasting, the treasurer´s tool to understand current liquidity levels and identify the timing of future liquidity pitfalls, has always been and will continue to be one of the most important tasks in managing liquidity risk and financing business growth,” said Tony Singleton, Asia-Pacific managing director at Reval. “But while risk awareness has certainly increased across Asia, many of the region’s treasurers are still using error-prone spreadsheets for forecasting, leaving treasury potentially exposed to inaccurate global cash positions and forecasts.”

With only 10% of respondents saying that they are fully satisfied with their forecasting processes and quality of data, the fact that operational risk is not an issue suggests that auditors, board risk committees and chief financial officers (CFOs) feel comfortable running their business on spreadsheets. “Four years after the global financial crisis, I would encourage CFOs to consider how such a disconnect puts their overall business at risk,” Singleton added.

The survey, conducted at a recent event hosted by Reval on TRM, gleaned insight from 80 finance and treasury executives from companies across multiple industries in Singapore and Hong Kong.

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