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Key questions to consider while searching for a cash flow planning software

What you’ll learn


  • Advantages and limitations of treasury software 
  • Which factors should be considered before choosing treasury software
  • Five success factors for selecting the best cash flow-based financial planning software

What type of software do finance professionals use?

Companies often employ the following treasury software for cash flow planning:

  • Spreadsheet
  • TMS
  • Cloud-based software / SaaS

What is the scope and limitations of the treasury software?

1. Spreadsheets

Scope of spreadsheets

According to the Cash Forecasting & Visibility Survey by Strategic Treasurer, 91% of companies still use spreadsheets for forecasting. 

Spreadsheets historically have been used to gather, track, and reconcile data for years. These are the advantages of using spreadsheets:

  • Open source
  • Only needs basic training to use it
  • Can be modified
  • Can be added to a workflow quickly and easily
  • Various spreadsheet templates are readily available for users
Limitations of spreadsheets

When using spreadsheets to forecast cash flows, the treasury department encounters the following challenges:

  • Manual, error-prone, and time-intensive process
  • Tedious collection of the appropriate datasets 
  • High input requirements and frequent human adjustments
  • Little visibility into specific entities to detect differences
  • Dead-on-arrival reports due to time-consuming data gathering and collaboration between teams

2. TMS

Scope of a TMS

A locally hosted application is a Treasury Management System (TMS) installed on-site. It aids in automating, documenting, and managing crucial treasury operations.

Many businesses believe a TMS will handle all their operational cash management problems. The following are the advantages of using a TMS:

  • Boost in productivity
    A treasury management system is good at streamlining and automating laborious data management duties and manual operations, which increases company’s daily productivity.
  • Limit redundant banking and FX costs
    TMS measurable benefits include the convergence of payment systems and banking connections, which results in lower cross-bank and FX fees.
  • Bank and connectivity flexibilityThe bridge to numerous banks and accounts is often where a TMS’s value proposition is seen. It integrates readily with bank portals. Hence, treasurers have complete control over their funds and activity due to the separation from old bank interfaces. However, it may not be able to store an abundance of data or integrate with all systems.
  • Regulatory compliance and risk mitigation
    It utilizes integrated risk mitigation features and establishes company-wide compliance with industry standards within the systems.
Limitations of a TMS

Limitations of a TMS

  • It uses MT940 file formats downloaded from the bank and runs these statements, But the STP rates are low, and data gathering gets delayed. It doesn’t support multiple users accessing, updating, and sharing information.
  • Difficulty in creating custom reports and forecasting due to manual data exporting and cleansing
  • Requires manual intervention and reconciliation due to outdated UI and architecture
  • Cumbersome and expensive maintenance and updates

3. SaaS

Scope of SaaS

SaaS users subscribe to an application rather than buying and installing it. The SaaS application is accessible to users from any internet-connected device.

It provides the following benefits:

    • Frees up the bandwidth: It frees up analysts’ bandwidth to focus on liquidity planning instead of manual data gathering and modeling.
    • Confident decision-making: Treasurers can make confident investment/debt decisions with accurate and readily available data.
    • Better flexibility and scalability: It offers operational flexibility that handles unexpected changes without requiring the setup of physical servers. Moreover, it offers predictability to monitor when and how much scalability is required for growth/investments. The software can be scaled anytime according to the user’s needs and changes in business requirements, wherein more data or processes can be added/replicated.
    • Better cost savings: It doesn’t require extra costs for updates and upgrades for the new capabilities. There are also no maintenance costs, and the vendor handles updates and upgrades, leading to more ROI.
Limitations of SaaS
  • Connectivity requirement:
    Since the SaaS model relies on web distribution, the company cannot access any program or data if the internet service is interrupted.
  • Minimum data requested:
    SaaS systems require more than six months of historical customer data to get the accuracy of clients’ behavior, and they also need bank statements of more than one month with rules defined for categorizing CFCs for bank data.
  • Lower barriers to entry for the competition:
    Easy replacement and lower entry barriers for the competition might also result from simple integration into the SaaS model. Since most SaaS transactions are subscription-based, businesses still need to provide clients more value over rivals while ready for the next subscription level once they sign up.
  • Higher costs than spreadsheets:
    SaaS is typically priced on an annual subscription model. The cost can range from $45,000-$60,000, including a one-time setup fee. It is cheaper than TMS, which costs between $200,000 and $400,000, depending on the solution complexity, with an additional annual maintenance fee. But, it is costlier than spreadsheets, which are free.

Challenges in adopting new cash flow financial planning software

The following are the common challenges treasury faces in adopting a new cash flow financial planning software:

  • Difficulty in transitioning from old to the new solution
    Moving data and restructuring processes can be a significant challenge when legacy or siloed technology is widely used. 
  • Tedious and expensive training to use the new technology: 
    Learning how to use new technology can be challenging and tedious for treasury teams with a lot on their plates or who have been accustomed to an outdated program or interface.
  • Fear of change or less-adaptable mindset:
    For treasury teams who are adapted to traditional methods of processing data using spreadsheets, it’s tough to consider a new technology with a mindset of ‘we have always been doing it this way’. They may not want to embrace change or think technology will replace them.

What factors need to be taken into account when selecting treasury software?

An effective treasury software system aids in streamlining procedures and boosting productivity for businesses. However, choosing one that satisfies all the requirements can be challenging given the number of options.

The following four rules can help the company simplify the selection process:

  1. Examine the current treasury operations
    Creating the groundwork for a robust treasury software solution provides the ideal chance to evaluate how things are currently operating. Examine the following things:

    • What are current procedures and processes?
    • Is the current software performing to its full potential?
    • Have the company’s real day-to-day duties changed?
    • Are the processes and procedures documents still relevant?

    This analysis makes it possible to improve company processes before implementing a new treasury software solution and getting the most out of it.

  2. Establish the system requirements
    Know the requirements, for example:

    • Seamless integration with banks, ERPs and TMS
    • Capabilities for hedging
    • Time savings and ROI
    • Automated data aggregation
    • Automated cash forecasting with increased accuracy

    Sort the requirements according to their significance. Assign weightages by creating a scorecard. Shortlist the vendors or technologies based on the scores.

  3. Prioritize needs
    There’s a genuine risk of getting carried away with items a firm doesn’t truly need at the price of things they need. Separate the ‘must-haves’ from the ‘good to haves’ and return to the original list of needs. Any treasury solutions software that a firm chooses must address the fundamentals. A fancy, expensive treasury technology with a thousand distinct features will be useless to the team if they can’t use it for the most basic tasks.
  4. Plan the implementation thoroughly
    In addition to budgetary assistance, successfully deploying treasury software solutions requires the complete support of management. Create a strong project team with members from your organization’s core financial and business divisions, sponsors, stakeholders, and suppliers. To lead the team and oversee the implementation process, the company must engage an experienced project manager.

What questions should be considered when searching for cash flow planning software?

There are a few things to look for when choosing cash flow planning software to ensure that all of the company’s financial planning needs are met. Businesses should consider these questions:

Question to consider for cash flow planning software

To maximize the value and cost-efficiency of the cash flow management tools, cash flow planning software should cover the following factors:

6 Success factors in the best cash flow based financial planning software

  1. Automates & tracks intercompany balances and cash pooling:
    A cash management software should automatically track intercompany activity, balances, and interest across all mirrored and notional bank accounts. This increases net cash flow and improves the visibility of the financial situation. Furthermore, it must have:

    1. Flexible dashboard reporting
    2. Comprehensive view of pooling arrangements
    3. Various download formats
  2. Automates verification of bank statement items to records from the prior day:
    The solution should automatically reconcile transactions using predefined and treasurer-defined rules. It should also allow teams to check for errors and correct them quickly. Cash managers can focus on higher-value tasks since automated bank statement handling and reconciliation saves:

    1. Time
    2. Reduces errors
    3. Eliminates manual work
  3. Enables real-time access to bank accounts and accurate cash balance prediction:
    Businesses with little cash on hand may experience severe liquidity shortages. By monitoring cash balances across bank accounts, businesses, pools, and currencies, cash flow management solutions should ideally assist in ensuring that users are always in the best possible financial position to meet their daily responsibilities.
  4. Supports dashboards and reporting:
    A good cashflow management software should integrate open-banking APIs in order to provide instant access to a wide range of cash reporting features by aggregating and standardizing transaction data from many banks into a single, accessible, real-time dashboard. Furthermore, it should examine cash in motion, deposited cash, and capital reserve levels to ensure that a corporation is financially healthy.
  5. Reporting:
    Effective performance evaluation of a corporation is achieved through cloud treasury management. Since data and processes are automated, reporting turnaround time is reduced, and the accuracy of the reports increases. Hence, the management can make better business decisions and improve their credibility with suppliers, investors, and the board.
  6. Provides high security and encryption:
    Businesses frequently have several bank accounts with different currencies in different countries and entities. Due to this, they are more vulnerable to money fraud and cyber risks. A cash flow management system should centralize and retain an unlimited amount of data while maintaining high levels of security, data integrity, and encryption. In a single repository, this helps to secure years’ worth of financial data.

Customer success story with HighRadius:

A $10 million firm faced the following cash management challenges:

  • Manual effort due to inability to integrate with the sources
  • A/R and A/P largely contributed to the variance
  • The spreadsheet-based process lacked scalability
  • No visibility on the number of available funds and where they are

They were able to obtain the following benefits after implementing the HighRadius cash management solution:

  • Continuous global cash visibility
  • Better management of vendor payments
  • Automated repetitive tasks
  • Better planning of cash flows

Talk with our solution expert today to get your hands on the best cash flow based financial planning software.

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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.