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Tips for successful treasury management

What you’ll learn

  • Learn the best practices in corporate treasury management that help treasury become more successful.
  • Understand how effective treasury management services can help treasury become more successful.

Treasury teams are essential to the success of their organization, yet sometimes underestimated. Enhancing the company’s treasury strategy can increase the productivity of their team and can improve the effectiveness of their treasury. Today, the corporate treasury plays a vital role within an organization. Treasury management services no longer involve simply managing working capital. Treasurers need to ensure that the treasury strategy that they are using is robust and scalable.

What is treasury management?

Treasury management is the management of a company’s whole financial affairs, including obtaining funds from diverse sources, currency management, cash flows, and numerous corporate finance strategies and procedures. The end goal of treasury management is to optimize short-to-medium term liquidity and help CFOs make good financial decisions involving their most important assets.

Leading-edge companies are continuously improving their treasury management to improve their financial performance.

Why is treasury management important?

Treasury management plays a vital role by assuring that a firm has the cash it needs at all times to run. The goal of any profitable company is to achieve bottom line growth and treasury management services help to do this through the maximization of cash liquidity. And that can be achieved through implementing a tried, tested, and quality corporate treasury strategy that helps cash flow management services.

Corporate treasury management best practices

Corporate treasury management best practices include the following:

Corporate treasury management best practices

  • Centralizing treasury management solution: Centralized treasury management solutions work better than decentralized systems because it follows the bottom-up approach. In centralized systems, forecasting is done from an entity level and rolled up to global forecasts. This enables granular cash flow visibility, informed decision-making, and minimizes errors. Centralization facilitates a consolidated view of the cash flow and risk scenarios of an organization’s global operations, helping financial managers make decisions based on overall performance rather than limiting them to specific geographic locations.
  • Accurate cash flow forecasting: Cash flow forecasting is vital to drive decisions regarding funding, capital expenditure, and investments. An accurate forecast can help to forecast future cash positions, prevent cash shortages, and provide the ability to earn returns on any cash surpluses.
  • Preparing for risks proactively: A company inherits various risks like operational risk, commodity risk, liquidity risk, interest rate risk, foreign exchange risk, etc. Effective treasury management services can help businesses minimize risks by embracing an efficient risk management approach. The risk management policy represents the assumption of vital risks and necessary tools for its management.
  • Keeping a record: Corporate treasury requires handling tons of documents and these documents need to be filed up in the correct order and a copy of the same should be stored on the company’s server available only to the treasury team.
  • Reporting: Performance of a company is assessed through an efficient financial management service. A treasury module connected with ERP or a dedicated treasury management solution provides accurate reporting needed to make executive decisions.
  • Adopting automation and AI: Automation reduces manual work and allows teams to concentrate on strategic tasks. AI, on the other hand, allows better data storage and management, which can then deliver important insights for other elements of the organization like financial planning or supply chain management. It helps by minimizing operational risk and reducing complexity.

Benefits with automated cash forecasting

Cash forecasting automation eliminates manual work and allows staff to focus on more high-value tasks with:

  • Better visibility over cash
  • Effective and timely decision-making
  • Reduction of cost in business
  • Improved risk management

How to make treasury more efficient

A company should provide training on new treasury management strategies and latest software to the team. Treasury teams need to be abreast with new technologies to stay ahead of the curve and ensure enhanced productivity and decision-making efficiency. Cash flow training is vital for companies to monitor their liquidity at multiple durations, improve their cash flow, and generate long-term profits.

Schedule a demo to learn how implementing the best treasury management services sets up companies for future strategic growth.

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The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.