Is your treasury management solution a dinosaur?

By Kyriba July 29, 2013

Why are you still using spreadsheets to manage your treasury function? Many years ago it made sense to use a spreadsheet for managing your treasury because there wasn’t a good alternative.  Today there is a new breed of SaaS-based treasury management system that has changed all this.

A spreadsheet error causes a $5.8 billion loss

The mistakes resulting from using spreadsheets are documented. The most spectacular is JPMorgan Chase’s mammoth $5.8 billion trading loss1 in 2012 due to a spreadsheet error by a trader in its chief investment office. Studies have shown that companies admit that more than 85 percent of spreadsheets have errors. Ventana Research’s Benchmark report “Spreadsheets in Today’s Enterprise2 details that the “disadvantages and dangers of desktop spreadsheets” outweigh the conveniences. “One of the most striking findings from our research is the degree to which people who use spreadsheets have become numb to the real risk of losses and difficulties they pose. Individuals do not realize the extent to which using spreadsheets hinders their efficiency,” said Robert Kugel, Ventana Research’s senior vice president and research director.

Worries that you need to get IT’s time to have a TMS solution aren’t applicable today, if you go with a SaaS solution. There are many other benefits of SaaS TMS3 such as rapid deployment, built-in capabilities to cover the basics and advanced needs. Your treasury team might have worked long and hard putting in many hours to create and check what was already built in a spreadsheet, but this previous investment is “sunk funds” that is costing your organization time and money every year. With valuable human resources, it is a zero-sum game. Treasury personnel time spent performing spreadsheet programming is time taken away from your treasury team’s core purpose, to know your liquidity, manage your risk, and work your capital. 

Spreadsheets are not cheaper

It’s a fallacy that spreadsheets are cheaper. Yes, the software itself is basically free and available on almost every employee’s desktop. However, looking at just the initial cash outlay is shortsighted. Kyriba/ACT research shows that companies using spreadsheets spend almost an extra month a year on just basic cash management4. When you look at the total cost of ownership the reality is that spreadsheets are MORE costly. Let’s take a most basic example, if a company spends and extra month a year to manage cash using a spreadsheet instead of a TMS; it costs the company more than $10,000 per year. That’s $10K more per year continuing to use a spreadsheet. The napkin calculation here is to take an $80K employee with benefits and calculate the cost of the extra time (one month per year) is takes just to manage cash using a spreadsheet. This addition cost is just for basic operational functions and the cost is significant, it doesn’t include other critical more strategic treasury functions. Spreadsheets are not cheaper.  

Don’t be a dinosaur. Your company does not want to be the next victim of a massive, costly spreadsheet error. In today’s era of squeezing the most out of resources and company initiatives focusing on risk management, the time to act is now.  



1. JP Morgan trading loss – $5.8 billion – CNN

2. Spreadsheets for Today’s Enterprise – Ventana Research

3. Why cloud matters to treasuryTreasury Management Interational

4. Kyriba / ACT research of treasury professionals

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