1) Integrating liquidity and FX management globally
Whether it’s managing and aggregating funds spread across non-functional currencies, physically moving FX and cash, or gaining visibility into global cash positions, liquidity management is entering a new era of simplicity and efficiency.
Cross-currency sweeps, for example, use same-day rates when automatically converting non-functional currencies into functional currencies on an intra-day basis – a significant improvement over the traditional two-day spot process. This makes it easier to manage liquidity and cash funding deployment across a company’s global currency impact. Such intra-day capabilities, along with new treasury technology tools, are elevating liquidity management from a back-office activity to a front-and-center decision-making driver.
2) Opting for automated real-time reconciliation
One of the most significant benefits of using automated reconciliation is increased efficiency in liquidity management. Tracking intraday cash movements improves the visibility into cash positions.
Accelerating real-time reconciliation
Payment delays and a lack of information provided with payments are two of the most significant roadblocks to rapid and effective reconciliation. This becomes more challenging when cross-border/currency implications are addressed. Banks are now developing solutions based on new-age technology that significantly improve real-time reconciliation, even in cases where payment information is missing or segregated.
Using cash management software to match payments received with expected receipts reduces cumbersome manual matching processes by bringing together disparate pieces of payment data. Hence, it improves the reconciliation of payments.
3) Managing risks with treasury solution
A treasury software assists the organization in keeping track of current and future cash inflows and outflows for different time periods. It aids in risk mitigation in the treasury by detecting discrepancies or fraud in transactions or payments through automatic reconciliation and accurate cash forecasts. This helps to optimize cash usage and avoid debts. Furthermore, treasurers can recommend better investment portfolios and financial plans for their organization.
4) Incorporating several scenarios into the cash forecasts to visualize future cash flows effectively
When multiple scenarios are analyzed, the impact of specific future conditions can be better visualized. This enables businesses to revise their strategies for overcoming potential financial risks. As a result, treasurers should stress test what-if scenarios (both best and worst-case scenarios) and incorporate them into cash forecasts to see how their cash balances would change if those scenarios occurred. This helps them make proactive decisions leveraging cash forecasting solution.
5) Implementing Cloud that helps in tracking bank signatories
Cash and liquidity management, as well as banking management, are among the top five priorities for treasurers, according to the 2021 PwC Global Treasury Survey. As a result, both mid-market and enterprise treasury require a system to effectively and timely monitor cash and improve banking. An automated cash management system aids in the tracking and management of bank signatories, as well as the elimination of other banking management issues such as balance sheet management, regulatory compliance management, and security breaches. Bank signatories can benefit from automation in terms of security, compliance, and productivity.
CFOs are in the midst of the most challenging yet exciting period of their careers. Emerging treasury technologies like automation are disrupting the way treasury operates by providing them several benefits.
