Firms need better data for improved analysis: study

Singapore

ONLY 59 per cent of leading companies in Singapore have 30-day cashflow visibility, while the figure for 60-day cashflow visibility is even lower at 19 per cent, a survey said.

However, Singapore fares slightly better than the regional average, which puts the percentage of firms being able to forecast their cash obligations up to 30 days ahead at 50 per cent. For 60-day visibility, the regional figure is also at 19 per cent.

The 2014 Cash Flow Visibility Index study polled chief financial officers or treasurers of 811 leading corporations in 10 markets, including Australia, Hong Kong, India, Japan, Malaysia and Singapore. Research firm East & Partners Asia conducted the study, which was commissioned by payments technology company Visa.

Lacking the right processes, systems and tools that would deliver real-time analytical reports, companies resort to working manually on cash flow and analysis reports. However, these reports may end up being dated as a result and could also give rise to human error. The survey showed that Singapore firms clock over 122 man hours a week manually entering data as well as preparing cash assessment and analysis reports, although this is significantly lower than the regional average of nearly 253 man hours.

Meanwhile, only 20 per cent of local firms said that they have strong confidence in the accuracy of their internal financial system data.

"Large and complex organisations that have enterprise systems appear to have an overlap between data maintained on their systems and on spreadsheets," said Lachlan Colquhoun, chief executive of East & Partners Asia. "This overlap indicates that duplication of data persists or that the same duplicated information is inadequate for eventual use. We also see that companies in sophisticated markets such as Singapore that have a higher proportion of data available on their enterprise systems also having a higher degree of overlap."

The report highlighted other findings too, such as the low adoption of electronic collection and payable platforms by many businesses.

Olivia Leong, Visa's head of commercial and prepaid payment solutions (Asia Pacific), noted: "Real-time digitised data from a single, reliable and clean source is critical to achieving profitability objectives for businesses. Our discussions with finance professionals suggest that their challenges in obtaining such data may arise from a lack of optimisation on existing systems."

Finance professionals may also shy away from adopting new solutions because of the time or resource investment that they expect is required, but there are easy-to-implement, cost-effective solutions available, she highlighted. "They can start by changing the way businesses pay and get paid," added Ms Leong. "A 16-digit account plays a pivotal role in this process change."

Solutions can cover procure-to-pay automation, payables automation, invoice management, spend management and commercial payment consulting.