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.
If you are still using manual methods to manage your debts and cash management process, then you are most likely to face these complications:
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The solution to achieving these goals is having a better treasury management system, which isn’t possible with an outdated manual process.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.
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:
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.
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.
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.
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.
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.
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.