Cash Visibility

Cash visibility is an organisation's ability to see how much cash it has, where it is held, in which currencies and on what terms, across every bank account and legal entity, accurately and in good time. It is a basic goal of corporate treasury, because a treasurer who cannot see the group's cash cannot fund payments efficiently, invest surpluses, reduce borrowing or manage currency and counterparty risk.

Visibility is the starting point for most other treasury activities, including cash positioning, cash forecasting, pooling and investment. It depends on collecting statements from many banks, which is the job of multi-bank reporting and the wider multi-bank connectivity set-up. Banks themselves need a similar view of their own positions, especially intraday.

Imagine a family with money in five different bank accounts, two credit cards and a jar in the kitchen. If nobody knows the total, they might take out an expensive loan while savings sit idle in another account. Gathering every balance into one list each morning solves that.

A company with dozens of subsidiaries and hundreds of accounts faces the same problem on a bigger scale. Cash visibility means that list exists, is up to date and can be trusted, so that decisions about paying, borrowing and investing are based on the real picture.

• Coverage. The share of the group's accounts and balances reported centrally, ideally all of them.
• Timeliness. Prior-day closing balances at a minimum, and increasingly intraday or real-time positions.
• Detail. Transaction-level data, not only balances, so cash can be matched to invoices and forecasts.
• Restrictions. Which cash is freely usable and which is pledged, held as restricted cash, or trapped by local rules.
• Currency and counterparty. Balances by currency and by bank, so exposures can be managed.

The most direct gain is lower borrowing. A group that can see a surplus in one subsidiary can lend it to another instead of drawing on an expensive credit line, and surplus cash can be invested rather than left in non-interest-bearing accounts. Visibility also reduces risk: treasurers can spread balances across banks to limit counterparty exposure, spot unusual movements that may signal fraud, and react quickly when a bank comes under stress, as many companies tried to do during the US bank failures of March 2023. Finally, it improves forecasting, because comparing expected and actual balances each day shows where forecasts go wrong and supports better management of working capital.

Most groups bring bank data into a treasury management system or an ERP. The data arrives through SWIFT messaging, host-to-host file connections, regional protocols such as EBICS, or bank APIs, in statement formats including MT940, ISO 20022 camt.053 and BAI2. Intraday updates use formats such as MT942 and camt.052, or API calls that return live balances. Rationalising the number of banks and accounts, setting up cash pools and running bank reconciliation daily all improve the reliability of the picture. Where data cannot be automated, local finance teams may still report balances by spreadsheet, which is slower and error-prone.

Governance matters as much as technology. Many groups require central treasury approval to open or close any bank account, keep a master register of accounts and signatories, and review it against bank confirmations at least once a year. Without such controls, accounts opened locally for a project or an acquisition can sit outside the reporting system for years, holding cash that nobody at the centre knows about.

Visibility is harder in some parts of the world than others. Small local banks may not support standard formats or SWIFT, statement data can arrive late, and some countries impose capital controls that mean cash can be seen but not moved. Mergers bring in new banks and systems that take time to connect. There is also a gap between seeing cash and being able to use it: a balance that appears in the system may be committed to payments already in flight. For this reason treasurers pair visibility with forecasting and with controls over who can open accounts, since an unknown account is the clearest failure of visibility.

Banks need real-time knowledge of their own positions at central banks, correspondents and clearing systems to manage intraday liquidity. In 2013 the Basel Committee published monitoring tools for intraday liquidity management that ask banks to track daily maximum usage and available liquidity. Payment companies and money transfer operators face a similar task across many nostro accounts and prefunding positions in different countries, where poor visibility leads either to idle buffers or to failed payouts.

• Basel Committee: Monitoring tools for intraday liquidity management