Are you a corporate treasurer feeling like a dinosaur in the digital age? Don’t worry, it surely wasn’t 165 million years ago when spreadsheets and calculators were not just yours, but every treasurer’s best friends. The digital age has brought upon a wave of changes and challenges for almost all corporate treasurers.
With the rapid development of technology, businesses are facing increasing pressure to keep up with the changing times, and the corporate treasury is no exception. The impact of the digital age on corporate treasury is profound, as it presents both challenges and opportunities.
On one hand, technology has made it easier for corporate treasurers to manage finances and monitor their cash flows. On the other hand, the use of digital currencies and new payment platforms has also made it more difficult for treasurers to keep up with changing regulations and risks associated with it.
Furthermore, the digital age has created a shift in customer expectations, with an increasing demand for speed, convenience, and security. Corporate treasurers must adapt to these changing expectations in order to remain competitive and relevant in today’s market.
In this blog, let’s deepen our understanding of the roles and responsibilities of a corporate treasurer, challenges faced by them, and the ways in which they can keep up with the evolving digital age of treasury management.
A corporate treasurer is responsible for managing a company’s finances and financial risks. They oversee the organization’s financial operations, including cash management, debt management, risk management, and investment management. The corporate treasurer aggressively participates in public markets and with the company’s enterprises, investors, and regulators to raise profit.
The corporate treasurer’s role revolves around efficient cash flow forecasting, low-cost funding, and effective risk management. They are a crucial decision-maker and strategic partner to the corporation and are often in charge of debt management, capital management, and regulatory reporting as well.
Overall, the specific duties of a treasurer can vary depending on the organization, but generally, the three main duties of a treasurer are:
Corporate treasury function within a company is responsible for managing the financial risks and liquidity of the organization. The main objective of corporate treasury is to ensure that the company has sufficient funds to operate its day-to-day activities, while at the same time minimizing any potential financial risks.
The division provides financial resources, raises finance and capital to support corporate activities, and manages the risk and liquidity portfolio dynamically. They work to optimize the company’s liquidity and financial performance while ensuring compliance with regulatory requirements.
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Let’s checkout the four common challenges faced by corporate treasurers today:
Any organization’s global cash visibility is critical to making timely business decisions. Visibility is hampered since data is dispersed across multiple organizations such as treasury management systems, ERPs, bank portals, sales order systems, etc. Low visibility can also be caused by non-standard processes which result in erroneous forecasts.
Corporate treasury can face repercussions due to lack of global cash visibility, such as:
Lack of accuracy lowers the confidence in making decisions. CFOs depend on unreliable data, thus can’t take effective decisions. Accuracy suffers as a result of:
New technology is already applicable and in use in a variety of fields. The main motives for implementing new technology are risk reduction and process automation. Treasury management system (TMS) is a software that aids in the automation of repetitive, and manual treasury processes.
A treasury management system is the ideal solution for dedicated treasury support due to the complexity of treasury demands, such as the need for:
Treasurers require the flexibility of spreadsheets to gather data, but they may not always have the time to implement frequent cash balances to assure spreadsheet accuracy. It also holds certain limitations such as:
Technologies such as AI can make a significant impact for corporate treasury departments by helping with accurate cash forecasting for making confident decisions on borrowing and investments.
The traditional way of forecasting is subjective and dependent on the instincts of treasurers. In the traditional way of forecasting:
KPIs help management measure how corporate treasury is performing and how the department contributes to the company’s bottom line. The treasury department must track these 20 must-have KPIs especially during economic distress when speed and efficiency are key.
The use of emerging technology facilitates the real-time flow of information and accurate cash flow forecasting. With treasurers working from home or in hybrid format, the cyber risks have prevailed significantly, so treasurers must take preventive measures to control cyber frauds and data breaches and mitigate them with stringent actions.
Risk management is a critical aspect of corporate treasurer roles and responsibilities because the stakes are extremely high. As a result, having automated cash forecasting software is critical for a corporate treasurer to identify the degrees of impact and mitigate risks in advance. Treasurers can use accurate cash forecasts to:
How can automation and AI help the modern treasurer overcome their challenges?
Corporate treasurers can keep up with the changes in treasury by possessing the following skills:
Using an MVP strategy makes sense since it is a low-cost, low-risk, and low-effort option to try out next-generation technological solutions safely and securely.
HighRadius’ AI-powered autonomous treasury solutions help corporate treasurers improve their cash flow forecasting and cash management capabilities.
Here’s how corporate treasurers can take advantage of HighRadius:
Overall, by leveraging HighRadius’ AI-powered solutions, corporate treasurers can improve their cash flow forecasting and cash management capabilities, reduce manual work, and optimize working capital.
To see how HighRadius can help you transform your treasury operations, schedule a demo with our experts.
Hope this blog will help you adapt to the evolving digital expectations in treasury and thrive, just like how the dinosaurs in Jurassic series adapted to their changing environment.
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