Manual processes and antiquated procedures no longer align with treasury processes. Learn how companies can embrace automation to help close the productivity gap and focus on more profit-centric activities.
There’s no denying that cash forecasting is a critical activity for treasury operations. No organization can afford to lose sight of its cash and liquidity positions regardless of size or industry. Yet, this can be easier said than done in a volatile economic environment. An SAP-sponsored report supports this viewpoint. The study of 371 finance professionals revealed a clear and compelling need for the office of finance and treasury to improve its cash management, control management, and general finance activities:
Respondents also identified these top objectives for making immediate improvements:
Nonetheless, most corporates cannot make immediate improvements using legacy treasury systems.
Legacy treasury solutions limit treasury’s capacity for expansion because:
The bottlenecks stated above emphasize the need for treasury technology. The additional factors that influence treasury
Unsurprisingly, businesses are looking to invest in corporate treasury software to automate, record, and control many fundamental treasury functions.
Corporate treasury software solutions automate critical financial operations in their most basic form, such as bank treasury operations or real-time cash flow data collection while maintaining financial data security.
Yet, corporate treasury software now provides more capability owing to the increasing complexity of treasury demands. Modern treasury solutions have grown to encompass treasury requirements in a superior, secure, and compliant architecture. But due to the abundance of technologies and software available, choosing the most suitable solution is difficult. Hence, the treasury must consider the questions below.
A proper cash management software for corporate treasury assists treasurers with the following functions:
The benefits of an effective cash flow management system are:
A corporate treasury software establishes and implements various communications interfaces for bringing in complete data required to manage treasury functions. Hence, the treasury team can benefit from a single source of truth for all data sources feeding into the centralized treasury systems.
Instead of wasting time reformatting, gathering, verifying, and cleansing data, the team can see and act on the data for faster and more accurate decision-making. As a result, treasury professionals can be more productive and save time by viewing critical issues such as cash, bank accounts, working capital, risks, and liquidity throughout the organization. They can better undertake roll-up analysis for the entire firm or do a thorough ad-hoc study of specific concerns by using corporate treasury software solutions offering a “drill-down and drill-through” approach.
The treasury team can immediately view any charges related to payments and transactions using corporate treasury software. This is because it has complete and up-to date information about a company’s finances.
Furthermore, the treasury team can handle several bank accounts from a single location. This makes financial transfers, such as those used to pay invoices faster, easier, and, in certain situations, cheaper.
Errors and mistakes can be costly, especially concerning the company’s finances. Corporations traditionally rely on spreadsheets and manual processes that reduce cash visibility. Reducing manual processes and eliminating reporting and documentation errors allow the treasurer to focus on cash and risk management rather than overcoming operational difficulties.
An automated treasury procedure eliminates any guesswork, thus minimizing human error. Moreover, some corporate treasury solutions provide complete straight-through processing (STP), i.e., total automation of all regular (day-to-day) treasury processes.
According to a poll by Strategic Treasurer and TreasuryXpress, 72% of organizations expected their corporate treasury management system deployment to take no more than nine months, yet only 41% of implementations were completed within that time frame.
Previously, when implementing treasury solutions, a firm would have to include in the initial set-up and ongoing maintenance costs of onsite servers and hardware, necessitating extensive internal IT assistance. But, setting up corporate treasury software is straightforward and less expensive nowadays. Implementation starts upon contract signing when a dedicated project manager is assigned. Their role is to prepare and execute a full implementation and training plan. It is a web-based out-of-the-box application specialized in streamlining main processes in the corporate treasury. Therefore, each implementation is quickly delivered and turnkey.
The enhanced visibility and flexibility of transferable funds have functioned as a spur for adopting treasury solutions. The capacity to evaluate a company’s real-time financial situation and transfer surplus assets to meet financial obligations can considerably improve business capabilities. Knowing exactly where funds are being spent allows surpluses to be found and put to better use. Instead of cash sitting idle, corporate treasurers can now free up credit within an organization for more productive usage, allowing for improved corporate liquidity planning and management.
Solutions are also becoming more scalable and can be deployed globally. The capacity to effectively utilize cash and other assets to generate growth and profitability while avoiding risk and maintaining regulatory compliance is perhaps the most critical benefit of an integrated treasury management system.
Corporate treasury software solutions provide numerous advantages:
Overall, software for corporate treasury plays a vital role in keeping corporate finances on track by enhancing agility and control to maximize the efficiency and accuracy of all cash reporting. That’s a positive benefit as globalization accelerates and the CFO’s work gets more complex.
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.