Learn how AI and automation could help Treasury professionals to shift from transactional role to strategic advisors of the CFO.
Treasury performed a critical role during the Great Recession and has been a reliable partner in the crisis years thereafter. Organizations reduced CAPEX spending while maintaining cash reserves, emphasizing the significance of liquidity planning and cash management. In the decade since the role of treasurer has evolved from transactional worker to become strategic advisors to the C-suite.
Now, with COVID-19, Treasury is dealing with uncertainties such as foreign exchange (FX) volatility and market complexity, changing regulations, and compliances.
According to a recent Deloitte survey, 80% of the CFOs want their treasury department to focus on crucial tasks such as Liquidity and Risk Management as well as being a strategic and value-added partner to the CFO. CFOs started recognizing the need for technology in the Treasury department as that enables them to spend less time on transaction administration and more time on “value-adding” activities for CFOs and business units.
Treasurers must see this as an opportunity and take strategic advantage of these trends and developments in order to modernize the treasury department and improve profitability, performance, and value.
This eBook focuses on the evolving role of the treasury – the changing expectations and increasing influence they have on the organization.
HighRadius conducted a joint survey in partnership with Treasury Webinars in Q2 of 2021, focused to help the treasury align with the current state of cash forecasting.
There were 282 active respondents involved in the study. Respondents belong to small companies with around 25 employees to large companies with more than 5,000 employees.
Treasury has been playing an important role in organizations during the COVID-19 crisis. The mandated lockdowns—full or in part—severely impacted numerous industries, leaving companies cash strapped. To remain viable, organizations looked to their treasury function to lead the way in helping resolve or mitigate the crisis. During this unprecedented time, the two vital activities driving treasury’s strategic growth at organizations are:
Also, the factors that have contributed to treasury’s expanding strategic role include:
Today, treasurers are charged with monitoring the changing economy, interpreting market trends, complying with industry regulatory issues, and warding off threats of fraud or technology disruption. Beyond these duties, a treasurer’s responsibilities also often include:
And all that’s in addition to managing cash and investments or achieving cost savings, as the role traditionally has had it.
By leveraging technology, such as APIs, RPA, AI/ML, BI tools, the transactional tasks such as data gathering, consolidation, building reports, are automated which enables Treasurers to focus on strategic tasks such as risk management, optimizing working capital, and participate in M&A decisions.
The treasury is the custodian of cash and manages financial risks of an organization. Their objective is to guarantee that the organization has enough cash to meet its day-to-day business requirements while also assisting in the development of its long-term financial plan and policies.
As we move from small to large organizations, the treasury hierarchy becomes complex.
The ongoing COVID-19 pandemic since the past 12 months, led to a downfall in the world economy. Markets are slumping even though central banks are pushing more liquidity into the system to decelerate the economic slowdown as much as possible.
According to the survey:
Clearly, transforming treasury from a transactional to a strategic function will not happen overnight. It will initially involve rethinking of processes, implementation of new operating models. Treasury evolution can be intense but given the uncertainties and complex environment organizations face, treasuries don’t have the luxury of standing still. Treasury is already uniquely placed to mitigate risks and enable their companies to capture opportunities that will take their businesses forward. They will need to continue to evolve their influence to create the capacity and capability to respond to the increasing demand and establish themselves at the helm of their organizations.
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.