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Role of Cloud Treasury Management in Reducing Debts

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With rising interest rates due to the current inflation, debt management has become even more challenging for treasurers and finance managers. Read this ebook to learn how a treasury cloud solution can help you manage your debts effectively.
CONTENT

Chapter 1

What are the implications of poor debt management in treasury and finance?

Chapter 2

3 Steps to improve debt management

Chapter 3

How does cloud cash management software optimize debt management?
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Chapter 01

What are the implications of poor debt management in treasury and finance?


With interest rates rising, many finance leaders are in distress. With clients unable to make payments on time and with a high DSO, meeting financial obligations can be challenging. Furthermore, companies can find themselves in a cash deficit situation if they cannot pay their debts on time. 

Businesses that still use primitive methods to manage their debt are more likely to fail at debt management, as this labor-intensive activity takes up a lot of time and can raise your company’s financial strain. 

What are the implications of poor debt management?

If you are still using manual methods to manage your debts and cash management process, then you are most likely to face these complications:

  • Delay in reporting your day-to-day cash flows.
  • Short-term credit rates are unfavorable due to a lack of liquidity insights.
  • Inability to have a safety net of cash savings to cover unexpected costs.
  • Stifled growth due to reduced investments.
Chapter 02

3 Steps to improve debt management


The following are three best practices that can help the finance team improve debt management with interest rates rising:

The solution to achieving these goals is having a better treasury management system, which isn’t possible with an outdated manual process. Hence, a treasury management cloud can be used instead for best-in-class results.

Chapter 03

How does cloud cash management software optimize debt management?


Cloud cash management software optimizes your debt management process by providing a centralized system for managing the cash flow of your business. It has several features that can help you turn your inefficient cash management process into an effective one. 

The following are some of the features of HighRadius Treasury Cash Management Software that can help you with the same:

Role-of-Cloud-Treasury-Management-in-Reducing-Debts

  1. Helps you with impact analysis using simulation
  2. It simulates what would happen if borrowing costs increased; this impact analysis can be done using the cash forecasting simulation. For example, your current debt fund investments lose value due to rising interest rates since investors want higher-rate funds. So now you will have visibility into these areas and be able to make strategic financial decisions accordingly.

  3. Records both expected and actual transactions
  4. It helps you make intercompany transactions and learn about cash balances such as total cash inflows, total cash outflows, debts, investments, the balance left in revolvers, etc. This also assists you in determining whether your organization’s financial status is stable, surplus, or deficit, allowing you to set goals and make decisions accordingly.

  5. Integrates with a variety of data sources 
  6. It easily links to all your banks, ERPs, and independent market data sources. These integrations help you seamlessly derive data from various sources and provide a detailed and accurate analysis of your cash position, especially by providing information on your existing debts. You can auto-populate settlement instructions using best-fit investment and debt planning criteria based on credit line availability and predetermined targets to make more efficient decisions.

  7. Auto-reconciles data every single day
  8. Bank reconciliation is essential to identify any deviation between cash transactions and bank statements. It ensures that transactions reported and bank statements are correct. Automatic bank reconciliation helps detect fraud and checks for potential delays in paying your debts.

  9. Provides a real-time 360-degree view of the organization’s financial status
  10. You can receive continuous and global cash visibility with end-to-end automation. The software also easily captures all mirrored and notional bank accounts’ intercompany transactions, balances, and interest, improving global treasury management.

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Take a quick tour to learn how to drill down into transactional-level details for each account to reduce DSO and stay debt-free with the HighRadius cash management 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.

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