Treasury recession is a severe, pervasive, and protracted decline in economic activity. It refers to the measurement of price alterations throughout a given time frame. It is calculated as the difference between the top of the previous expansion and the bottom of the downturn. Market volatility might only last a few months, whereas it might take years to recover economically from the previous state.
The treasury recession has the following impact on treasury:
Planning and taking action before and during an economic downturn are necessary to recession-proof a business. To create and execute these plans, business leaders require reliable analysis tools and valuable and accurate financial data. To comprehend current outcomes and create what-if scenarios and forecasts, business executives need the visibility that treasury management solutions offer into financial and operational data.
Here are some ways in which treasury management solutions can help recession-proof an organization:
It also helps perform variance analysis across various cash flows and time horizons. The “closed-loop feedback mechanism” lowers the difference between forecasts and actuals. This mechanism enables treasury management solutions to discover what they did correctly or incorrectly and gives them the information they need to improve forecast accuracy.
The best practices to build resilience with treasury management solutions are:
Building resilience during a treasury recession comes down to operating deliberately and always being ready to adapt. Automation can free up bandwidth when the treasury team already has enough on their to-do lists. Speak to our experts to learn more about surviving the treasury recession with treasury management solutions.
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.