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Global cash visibility and its importance

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedAug 20222 min read

Global cash visibility is the ability to see your exact cash position. For larger companies, global cash visibility can have a very literal meaning. They can hold cash in multiple currencies and multiple countries. This isn’t so common for SMEs in the UK. It is, however, very common for SMEs to have cash in different places. It’s vital that they keep track of it effectively.

The basics of global cash visibility

In the context of business, the term cash is used to refer to anything that can be monetised within three months. It can therefore include accounts receivable (and investment income) as well as cash (in hand and at bank). In some businesses, it may include cryptocurrency, cheques or even travellers’ cheques.

Ideally, all of these different cash positions should be visible from one central location. Realistically, however, this is not always possible. In fact, it will almost certainly be impossible if your business is still handling actual cash or physical cash equivalents (i.e. cheques and travellers’ cheques).

You can and should, however, aim to streamline your cash management to minimise the effort it takes to see your global cash position. In particular, you should leverage technology as much as you can. This not only increases speed and convenience but it also reduces the possibility of human error.

Why global cash visibility is important

There are three main reasons why global cash visibility is important. The first is that mistakes are going to happen from time to time. When they do, you want to catch them quickly. This generally makes it a lot easier to put them right (and potentially less expensive too).

The second is that fraud is also a risk for all businesses. That includes sole traders/freelancers handling their finances themselves. If you fall victim to it, you need to know as quickly as possible. Again, the quicker you act, the less damage the fraudsters can do.

The third is that knowing your global cash position is essential to managing your cash flow. Most businesses have a combination of accounts receivable and accounts payable. You need to know what cash you have and where it is to be able to manage payments to your own suppliers. Keeping track of your cash position also helps with forecasting.

As a bonus, the process of maximising your global cash visibility can also do a lot to help you reduce costs and/or streamline business processes.

How to maximise global cash visibility

For most SMEs, the keys to global cash visibility are streamlining and automating. Firstly, try to eliminate physical payment methods if you possibly can. If you really can’t then do your best to minimise their use. Then log and bank them as quickly as possible.

Likewise, minimise the number of payment methods you offer. The key to doing this successfully is to think about what your customers want. Many customers will be perfectly happy with just Direct Debits and/or Instant Bank Payments. If you want to provide extra options, then consider payment cards and potentially one ewallet or possibly cryptocurrency.

Update your cash positions automatically as much as you can. With GoCardless, you can link your account with your accounting software (e.g. Xero). When invoices are paid, they will be automatically reconciled. This keeps everything up-to-date with no effort on your part. If you’re not using accounting software, you can see your status at a glance in your GoCardless dashboard.

Check your cash position at least once a day no matter how busy you are. Most electronic payment methods pay out at set times. Ideally, you should check your cash position as soon as possible after these times. If you’re also taking physical cash payments, you will also need to check your cash position after the tills have closed for the day.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.