3 Reasons You Should Start Your Treasury Management RFP Today

November 30, 2017
Daniel Shaffer

The reasons why companies should adopt a treasury management system (TMS) are even more compelling today than they were five years ago.

A new report by Strategic Treasurer, The Definitive Guide to Treasury + Risk Management Systems, includes a checklist to help firms decide whether they need a TMS. While some of the items listed are perennial, others are becoming more pressing due to increased loss from fraud, rapid changes in currency markets and onerous regulatory requirements.

We’ve picked out three compelling reasons why treasurers who are not yet using a TMS should get start the RFP process today:

1. Fraud

The board of directors knows the company is at risk and is looking for treasury to protect company assets and shareholder value. According to Strategic Treasurer’s 2017 Treasury Fraud & Controls Survey, a staggering 86 percent of organizations have experienced fraud attempts in the last two years.

This is a very real threat – and treasurers and CFOs need to do everything they can to protect their organizations from the possibility of financial loss and reputational damage. A dedicated TMS can play a key role in detecting and preventing fraud, for example, by:

  • Introducing payment workflows with multiple levels of approval
  • Encrypting all treasury data
  • Providing central visibility over bank accounts, authorized signers and bank account documentation
  • Providing a treasury-wide audit trail

Free Download: Strategic Treasurer's Definitive Guide to Treasury + Risk Management Systems 

2. Risk

A recent survey carried out by CFO Research in collaboration with Kyriba identified risk management as a key area where CFOs can add strategic value. But in practice, much of this responsibility falls to the treasurer. As Strategic Treasurer points out, “In many organizations, a significant portion of these risk management responsibilities have been delegated to treasury.”

Managing risk is becoming a bigger responsibility for treasurers because recent geopolitical developments -- like Brexit or inflation in Venezuela -- have triggered significant currency movements, denting many companies’ profitability.

Without a dedicated TMS, treasurers may struggle to manage FX and other risks effectively. A powerful, cloud-based TMS can support risk management in a variety of ways, from offering direct connectivity to FX trading platforms to supporting derivative and hedge accounting. In today’s high-risk environment, these benefits should not be overlooked.

3. Compliance

Also increasing in importance is the compliance burden faced by many treasurers and their organizations. Against a backdrop of increasing regulatory requirements – and hefty penalties and fines – non-compliance is a significant risk. A TMS can support and ensure compliance by providing financial controls and streamlining financial reporting.

Bank account management (BAM) is one area where a TMS can add particular value. Citing developments like FATCA, Basel III and Dodd-Frank, the Strategic Treasurer checklist notes that BAM modules included in treasury systems “can track and report on a long list of bank-related data and information.” According to the report, 70 percent of organizations list BAM as a needed functionality, while 28 percent see BAM tools as the focus of significant investment in the coming five years.

Act now

There have never been more compelling reasons for investing in a TMS, especially as we head into a new year. The many long-standing benefits still apply: a dedicated treasury system can reduce costs, increase productivity, and unlock working capital. But today’s challenging risk and regulatory environment – not to mention the growing threat of fraud and cybercrime – means that for many, purchasing a TMS has become a matter of urgency.

Download the new Strategic Treasurer report today to learn more.

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