The pandemic has exacerbated the need to embrace treasury automation in companies all over the world. A survey by Mckinsey stated that 88% of finance executives have increased their implementations of automation and AI since the outbreak. Additionally, the ACT (The Association of Corporate Treasurers) conducted a survey in 2021 that found that around 23% of treasurers increasingly invested in automating treasury functions, and 47% have begun investing in automation in 2021 alone. Automation has become more of a necessity than a desire as it gives treasury teams bandwidth to focus on making proactive liquidity decisions.
Cash is king, and failure to anticipate cash crunches leads to detrimental business impacts such as overborrowing or overspending. The use of spreadsheets and cash flow statements for forecasting limits forecast accuracy and visibility into cash flows. However, automating treasury processes provides granular visibility, proper reconciliation, and real-time insights, ensuring error-free cash flow management and improving liquidity decisions.
Automating treasury processes drives business growth in the following ways:
Treasurers can gain continuous and granular cash visibility through a single cash management software. They no longer need to estimate their cash positions based on limited or outdated information. Accurate and automated data help treasurers to get a clear picture of the company’s cash position.
With accurate data, CFOs can make confident and timely data-driven decisions based on reliable cash forecasts and reports.
McKinsey’s survey stated that companies automating 50-70% of their tasks noticed 20-35% annual cost efficiencies and ROI in triple-digit percentages.
With automated treasury software, fees charged by banks for cross-border payments and payments across multiple vendors are eliminated. The money saved can be used for business expansion, debt payments, M&A, etc.
Since automation handles routine tasks efficiently, CFOs can exercise better control over risks. Better cash flow analysis also helps the key decision-makers to identify the problematic areas and mitigate potential risks.
A billion-dollar construction firm dealt with these challenges within cash forecasting:
With the help of automation and AI-based cash forecasting, they were able to achieve 94% cash forecast accuracy and reap additional benefits such as:
When choosing the best treasury management software, it is essential to gauge the solution by its ability to address a variety of challenges in treasury. Some of those challenges are:
An ideal automation solution is efficient enough to curb these challenges through the following ways:
HighRadius AI-powered Treasury Management Software Applications allow treasury professionals to take complete control of treasury functions and help support the company in meeting its business goals. If you’d like to learn more and speak to a solution expert, click here.
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.