Forecasting Quandary: Excel, BI, TMS?

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TREASURY UPDATE NEWSLETTER - 2017 Q 2

Treasury management solutions are specialized

with robust databases that are designed to

communicate with other technologies, seamlessly

and securely. Thus, integrating cash flow forecast

data from ERP systems, FP&A systems or internal

data warehouses is drastically simplified, and often

automated. A comprehensive TMS will also house all

capital market activity, whichmeans that investment,

debt, and currency derivative flows — both principal

and interest payments — are automatically included

in the forecast.

Additionally, modern TMS solutions include

forecast predictive analytics that leverage historical

actuals and existing budget plans to produce

intelligent, data-driven cash flow forecast versions.

For global teams, a TMS introduces a new standard

of discipline, scalability and workflow that provide

global subsidiaries a simple tool to submit their

forecast, and even include approval steps as

required. A TMS also provides measurements of

KPIs that allow regional and central treasury to

monitor forecast accuracy and institute treasury

scorecards to improve accuracy and accountability.

Despite all these efficiencies, TMS solutions have

been criticized for the all-important publishing and

formal presentationof the forecast, fallingshortwhen

it comes to formats, graphs and executive output. It

is rare but not uncommon that visual data reporting

is prioritized over integrated global insights. In some

cases, the treasury team is out gunned by the IT

department who have reviewed and adopted new

software solutions for other departments and that

have some applicability as a general data analytics

or reporting solution. These tools don't solve the

core work of a TMS: aggregating financial data from

dozens or hundreds of bank accounts worldwide in a

timely, efficient manner that does not involve logging

into individual bank portals. To do this at scale, you

need seamless connectivity, security, and a robust

infrastructure. Any business intelligence tool can

add value from a data analytics and visualization

perspective, but it cannot replicate the core tasks of

a TMS. Having said that, with the adoption of modern

UIs and custom dashboards, treasury management

solutions’ data visualization now rival even the most

dynamic spreadsheets.

CLOSING STATEMENT

In closing, it is clear Excel and other BI tools can

offer tremendous value to treasurers for a variety

of analytical needs. However, when considering

a scalable process to manage a global cash flow

that automates a variety of inputs, drives predictive

results, and provides structure to measure variances

that hold participants accountable, the modern TMS

has evolved to encapsulate these treasury needs in a

superior, secure, and compliant framework.

Integrating cash flow forecast data

from ERP systems, FP&A systems, or

internal data warehouses with a TMS

is drastically simplified, and often

automated. A comprehensive TMS will

also house all capital market activity,

which means that investment, debt,

and currency derivative flows – both

principal and interest payments – are

automatically included in the forecast.

BI tools don’t solve the core work of

a TMS: aggregating financial data from

dozens or hundreds of bank accounts

worldwide in a timely, efficient manner that

does not involve logging into individual

bank portals. To do this at scale, you

need seamless connectivity, security, and

a robust infrastructure. Any business

intelligence tool can add value from a data

analytics and visualization perspective, but

it cannot replicate the core tasks of a TMS.