{"id":5547,"date":"2020-06-09T12:06:00","date_gmt":"2020-06-09T12:06:00","guid":{"rendered":"https:\/\/www.dab-europe.com\/?post_type=articles&p=5547"},"modified":"2024-07-30T11:32:07","modified_gmt":"2024-07-30T11:32:07","slug":"cash-monitoring","status":"publish","type":"articles","link":"https:\/\/www.dab-europe.com\/en\/articles\/cash-monitoring\/","title":{"rendered":"Cash Monitoring"},"content":{"rendered":"\n

Most of the business owners and CEOs have shift their attention in profit increases, earning ratios and cost reductions which are used to show elegantly how good an enterprise is performing. However, according to Reider & Heyler (2003)<\/mark><\/a>, these businesses might forget their most important daily concern \u2013 monitoring the company\u2019s cash position. Cash is the most important liquid asset of a business which ensures the payroll is met, new customers are acquired, new products are developed, vendors\u2019 bills and taxes are paid, and most importantly growth and expansion of a business is possible. The amount of cash that a company has on its accounts at a certain point in time portrays the company\u2019s cash position. Monitoring of a company\u2019s cash situation is another way of measuring its financial strength and liquidity. As mentioned by Reider & Heyler (2003)<\/mark><\/a>, it is the lack of cash which causes companies to fail and not the lack of profit or growth. Not having sufficient cash is a concern of many CEOs who fear they might lose their businesses due to such reason. On the other hand, having too much cash in the accounts can create an opportunity cost called cash drag. By holding too much cash, companies can lose money as the value of cash can decrease due to inflation, when they could have earned more from allocating it in other products with higher returns. In addition to that, we currently face the common situation of negative interest rates, which might lead to the punishment of paying the bank for having too much money on the accounts.<\/p>\n\n\n\n

Considering this, the monitoring of cash situation should remain one of the most important aspects for every business. Continuous monitoring of the cash movement ensures the company is on the safe side by not spending more than necessary and at the same time not delaying the payment of invoices. Furthermore, a good cash situation is a safety for potential business crisis and emergencies.<\/p>\n\n\n\n

Although it might sound easy, the monitoring of the cash situation is much more complicated for big enterprises. These enterprises have different accounts for a different number of companies. The companies might be located in several countries which use different currencies. When it comes to analyzing these accounts, monitoring of the cash position for each company, no matter the location and currency, requires a special attention of the CEOs.<\/p>\n\n\n\n

In the table below we show a typical cash situation where different companies contain different accounts in different currencies.<\/p>\n\n\n\n

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Figure 1: The typical situation <\/sub><\/figcaption><\/figure>\n\n\n\n

While external investors are more interested in the company\u2019s cash flow statement on quarterly basis, CEOs and other internal stakeholders should have a look at the cash situation more often and regularly. Therefore, a monthly and even daily overview of the cash accounts is crucial for them. Considering this dab: Daten – Analysen & Beratung GmbH is coming with a cash monitoring solution in the market.<\/p>\n\n\n\n

The solution<\/h2>\n\n\n\n

By picking the necessary data and information from your SAP\u00a9 Systems, dab:CashMonitoring is able to reflect your up-to-date Cash Situation on a monthly, weekly or even daily basis. Fully automated and updated in the background, the solution also deals with some common pitfalls when talking about cash positions in your ERP-System.<\/p>\n\n\n\n