KUALA LUMPUR (Mar 10): Most Malaysian corporates do not have a real-time, consolidated view of their cash, with 71.9% having no sight of their immediate cash positions, a survey has revealed.

The Cashfac Operational Index, which was released today by cash management firm Cashfac Technologies, said Malaysian corporates had the worst real-time cash visibility (28%) as well as the lowest percentage of visible cash (44%) in Asia Pacific.

This despite Malaysian corporates having an average of three banking relationships – the lowest in the region – said the survey conducted by research firm East & Partners Asia from December 2014 to January 2015.

"Attaining perfect clarity essentially hinges on the corporates' ability to integrate all of their platforms and bank accounts together in a seamless and synchronised manner which can be viewed on a single dashboard?," read the Cashfac Asia Pacific Operational Cash Index Whitepaper.

Lachlan Colquhoun, the chief executive of East & Partners Asia, said in a press release that lack of cash visibility among corporates was caused by the complexity and shortcoming of managing multiple banking relationships.

"Corporates across Asia Pacific are often handcuffed by siloed, inflexible and bank specific systems, which restricts transparency of operational cash," said Alastair McGill, managing director of Cashfac in the same press release.

"There is absolutely no reason why these firms shouldn't be able to see the majority of their cash in real-time and have the tools and processes in place to maximise the value of cash in their businesses."

Finance website bobsguide.com said cash visibility was crucial for corporates to utilise their cash efficiently.

"Lacking visibility of the entire bank relationship network, there is no real chance to utilise cash efficiently, and so the organisation is likely to use its borrowing lines and facilities in an inefficient way," said the website.

"This incurs unnecessary bank interest and transactional costs. And it indicates that more, perhaps much more, working capital is being consumed than is in fact necessary to fulfil operation’s needs."

The whitepaper said Malaysian companies cited the high technology upgrade costs and solutions from banks as being the biggest barriers to getting full visibility of their cash.

"The results highlighted that solutions from banks were inadequate, and where available, corporates deemed them to be too expensive," said the whitepaper .

It further revealed that 38.7% of cash in Malaysian corporates is not optimised under any pooling structure.

Malaysia is also the worst in the region at utilising cash management structures, with just 17.7% using end of day sweeping and 43.6% using notional pooling facilities, it said.

According to accountingtools.com, notional pooling is "a cash concentration system that allows cash to remain where it is and under local control, but which is recorded at the banks as though the cash has been centralised".

Cash sweeps, which are intended to occur at the end of every business day, is "designed to move the cash in a company's outlying bank accounts into a central concentration account, from which it can be easily invested," said the website.

But the survey added that Malaysia's low usage of cash management structures was "not surprising", as 54% of the Malaysian corporates are domestically focused.

Malaysian corporates also said they had the lowest degree of control over international transactions with multiple banks, it said.

Overall, only 35% of the 364 corporates in Asia Pacific interviewed for the survey have a transparent line of sight to their real-time cash positions, it said.

"High costs, propriety banking systems and patchy work-around solutions were all seen by corporates as undermining the accuracy and confidence in data and impacting the ability to achieve real-time cash visibility," Cashfac said in a press release.

Only 23% of cash is physically pooled in Asia Pacific. And, where notional pooling was possible, it was not fully exploited with less than 50% of all cash being notionally pooled together, it said.