'95 per cent corporates have lowest cash flow visibility'

MUMBAI: Almost 95 per cent of corporates in the country have lowest visibility of their cash position due to dominance of cash payments for spends rather than use of e-payment channels, says a study.

"Indian corporations have been identified as having the lowest visibility over their cash flow, with many lacking efficient processes, systems and tools to deliver real-time visibility and predictability of cash flows," global payment technology company Visa said in its ' Cash Flow Visibility Index Study' for 2014.

The study showed that 95 per cent of companies do not have 60-day visibility of their cash obligations, and 87 per cent of them do not even have a 30-day visibility.

It said due to "lack of right processes, systems and tools", companies require time to manually work on analysis reports.

The study revealed that 97.5 percent of leading companies in the country do not have access to analytic reports that provide real-time visibility of cash positions.

It said corporates spend up to 480 man hours per week manually entering data and preparing cash assessment and analysis reports due to absence of appropriate tools and systems.

The level of adoption of electronic collection and payable platforms in many businesses, the study said, is very low.

"Only 15 per cent of companies use electronic collection platforms to manage their revenues, and close to 44 per cent of the corporate's operation is managed on spreadsheets," it stated.

The lack of real-time digitised data of receivables and payables means that businesses are unable to predict their future cash obligations accurately, one of the findings showed.

"Indian businesses are clearly in need of solutions that will greatly enhance their cash management processes. Real-time visibility and predictability is a must-have for all CFOs and treasurers so that they can make accurate decisions on reinvestments or expansion of their businesses, both leading to better profitability for their companies," Visa Group Country Manager, (India and South Asia) TR Ramachandran said.