Leveraging technology to make treasury a strategic business partner

By Kyriba September 3, 2015

Treasury management systems have been around for about 20 years, and are used to great effect by the vast majority of the world’s biggest and most successful companies. Despite this, there can often be a misconception about the business value of the benefits that a TMS can bring to the organization.

Of course, automating manual processes is at the heart of a TMS’ benefits, but automation is the start of the journey, not the end. On the most basic level, it’s certainly nice to eliminate the requirement to spend several hours each day accessing bank portals and entering data into cumbersome spreadsheets. However, where the benefits really add up is how the extra time and insight that a TMS provides enable treasury to create value throughout the organization.

Here are the steps that a treasury team can take to become a value creation engine.

Step one – productivity

Productivity is the most straightforward. Automating repetitive tasks allows time to be moved from processing data to analyzing it, meaning you’re not spending all say wrestling with spreadsheets. Similarly, streamlining reporting, by automating and scheduling reports can lead to significant time savings. Last, by importing data directly into the TMS, you can avoid re-keying errors, which not only reduces risk, but can also save huge amounts of time having to manually comb through data to find the error.

Step two – financial controls

On top of the enhancements in data integrity that automation delivers, greater financial controls can be achieved by standardizing processes and establishing controlled workflows. These allow for the separation of duties by role or hierarchy, reducing the risk of a malicious actor making fraudulent transactions. This risk, and also that of inadvertently erroneous transactions, can also be minimized by establishing centralized audit trails. These improve both visibility and transparency within the treasury team, and also help to control the workflow more effectively.

Step three – global visibility

Treasury requires deep visibility into current and forecasted cash balances in order to make effective decisions. The treasurer and the CFO must know where their cash is, what financial positions and contracts exist, and what exposures face their financial assets. Cash visibility is the first priority, consolidated reporting across all asset classes the second, and the final critical component is assessing the impact of the various types of risks – including operational risks such as inadequate controls – that can hurt the value of these assets..

Step four – effective financial decisions

Visibility and transparency into cash, liquidity, financial positions, and exposures enable treasurers to make better financial decisions – investing, borrowing, hedging, efficient cash movements and more. By centralizing all treasury data in a single, global solution, treasurers have better insight and more accurate information, which allows them to more confidently make treasury decisions.

Step five – treasury as a strategic partner

Once treasury has amassed this intelligent information, insight, and analysis, it can be used to generate business value throughout the organization. On the most straightforward level, benefits include operational improvements and minimizing risk both through inadvertent and deliberate channels. In addition, the established controls and workflows ease the ever-growing burden of regulatory compliance. On the highest level, treasury is now in a position to add valuable input into initiatives ranging from M&A activities to business growth and expansion and working capital optimization.

With the CFO’s mandate to treasury becoming ever more focused on driving meaningful business value across the organization, the deployment and correct application of a TMS can be a real enabler of these key benefits and transform the treasury team into a strategic business partner throughout the business.

For more information on this topic and the different areas where treasury can deliver value, download our white paper, The Treasury Mandate: A Strategic Partner for Unlocking Business Value.

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