As the “chief growth officers” in an organization, CFOs play a crucial role in steering the enterprise toward profitable growth. Re-thinking the role of treasury in the midst of rapid growth is required to ensure success in the digital era. What separates winners from laggards is a treasury management system that equips treasury with the ability to take a more prominent role in driving both operational efficiency and execution effectiveness across business units.
Digitally-enabled treasury management is the strategic weapon that unleashes the enterprise’s value-creation potential. The right treasury management system will empower treasurers and their teams to tackle today’s most complex financial challenges with solutions for cash and risk management, payments and working capital optimization.
Related reading: How JVCKENWOOD's CFO Benefits from a Treasury Management Solution
Transforming any treasury operation into a mission-critical, digitally-designed, insight-focused function should focus on three key pillars:
- Protect Against Loss
- Enhance financial controls to prevent payment fraud, human error and other operational risks
- Reduce financial risk with real-time centralized visibility of cash forecasts and management of FX exposure, supporting hedge programs
- Systematic enforcement of cash accounting and process compliance
- Drive Growth Opportunities
- Enhance decision making through timely, accurate cash and liquidity forecasting
- Optimize working capital to increase free cash flow
- Increase investment income and decrease debt
- Re-allocate human capital and cash to more strategic growth initiatives
- Reduce Costs Via Automation
- Eliminate labor intensive processes, including:
- Cash management and forecasting
- Cash accounting and reconciliation
- Payments processing workflows
- Risk management reporting
- Bank relationship management
The road to steering the enterprise toward profitable growth goes through treasury. This point was re-affirmed in a new white paper from The Hackett Group, entitled “The CFO as Chief Growth Officer,” which discusses the direct and immediate value that modern treasury technology can have in accelerating business growth.
It is clear that today’s CFOs must empower their treasurer to lead the path to digital treasury management transformation. This transformation is not possible without a treasury management system that enables productivity; enhancement of internal controls; and timely and reliable visibility into cash with business intelligence-enabled analytics resulting in more informed financial decisions.
The CFO’s empowerment of their treasurer with this level of digital knowledge and systematic workflow will have positive cash flow implications and strengthen margins that improve shareholder returns or a company’s net value.