By Patrick Cannon, Product Owner, Reval and Treasura Product lines

Treasury operations play a vital role in all organizations, managing the liquidity and mitigating operational, financial and reputational risk. They are at the heart of the organization’s financial wellbeing and are relied upon to provide up to the minute insights into cash positions and liquidity. Many organizations still rely on trusted tools that have been used for years, such as Excel spreadsheets, to provide them with insights and analysis. Increasingly, these solutions are no longer fit for purpose, as they are unable to keep-up with the growing, diverse needs of treasury operations in today’s digital economy.

The extraordinary challenges posed by the events of the past two years have made clear the vital role that treasuries play in the functioning of organizations of all sizes. During this period, the need for a thorough understanding of cash flow took on an even greater importance than in normal business conditions. Taking this into consideration, now is the time to reassess treasury operations and consider how new technology solutions can get an organization on the financial front foot.

Corporate treasury operations

In September, Citi issued the latest findings from its global corporate benchmarking survey, Treasury Diagnostics, which is designed to help companies assess their treasury, working capital, and risk management practices. On a positive note, the report titled ‘Balancing Digital Aspirations while Addressing Risk Management Fundamentals,’ found that many corporate treasuries are moving away from longstanding manual processes and are adopting new techniques and digital solutions to make ready for the future. At the same time however, the report found low levels of automation and connectivity with bank systems, highlighting the inability of some companies to effectively integrate their technology ecosystem. So, while there is intention to move towards new technology solutions, there is still much to be done to make this a widespread reality amongst corporate treasury operations.

Illustrating how sizable this issue is, the report found that 64% of organizations surveyed stated that their treasury management system (TMS) is either not integrated or only partially integrated with their enterprise resource planning (ERP), which results in the significant use of manual processes to support cash flow forecasting. Additionally, 79% of respondents reported that they do not have a fully integrated TMS/ERP platform with their banks, necessitating manual reconciliations.

The need for automation

Today, to achieve success, treasury operations teams need to be able to automatically collect all bank data, reconcile it, and account for cash movements, as near to instantly as possible. That simply cannot be achieved with the spreadsheet-based solutions that many organizations still rely on. Understandably, there is still a fear factor related to the implementation of new technology solutions, based on a belief that it may add complexity to well established ways of working. This need not be the case. New SaaS-based solutions designed specifically for treasury operations can be implemented in less than 24 hours, depending on the size of the organization.

Leading-edge treasury technology solutions incorporate intelligent automation, which allows the completion of daily cashflow processes in minutes, rather than hours. Additionally, all accounts and currencies can be consolidated and viewed at the touch of a button, and all without the manual labor of maintaining Excel.

In addition to improved capabilities and efficiency, another major benefit of implementing a SaaS-based TMS is a significantly reduced cost of ownership. This results from the fact that organizations no longer need to own and maintain their own servers to host the TMS. What’s more, SaaS-based solutions can adapt and change with the wider technological landscape. This eliminates the problem posed by a depreciating asset and creates the possibility that a TMS could appreciate over time.

The financial front foot

The democratization of SaaS-based TMS technology is spreading. What was once available to the largest organizations at a substantial cost is now available to smaller ones in a better way at a lower cost. As time goes on, this may become even more true. Lower revenue, high complexity organizations have long been an underserved market, standing in the gap between offerings.

Excel can keep them running, but many important functions are going neglected or performed at the last second with undue stress and error-prone, manual processes. With staff stretched to capacity, there is little room for growth. Some organizations may find themselves at a tipping point, where investing in a solution could free-up resources, allowing treasury staff to take on more strategic, forward-thinking cross departmental tasks. Problem solving, advising and initiative could make a lasting difference to the organization’s future.

With better tools, the amount of time spent on accounting and reporting is substantially reduced, and financial expertise can add greater value to growing businesses elsewhere. With lite SaaS-based TMS now a real option for medium and smaller-size organizations, it may be a good time for treasury to reevaluate and consider options more capable than spreadsheet-based solutions. There are now better options available to treasury operations that offer improved levels of efficiency and new possibilities, meaning they no longer must be encumbered by manual processes.

About Author:

Patrick Cannon is an Executive Vice President at ION, where he oversees two of ION’s treasury products lines, Reval and Treasura.  He has over 23 years of experience in financial technology, having leadership roles for start-up and growth-stage technology companies. He began his career in the industry at FNX Solutions, an early player in the ASP space (a precursor to SaaS), which offered capital markets risk management solutions to global financial institutions. At FNX Solutions, Mr. Cannon created and led the client relationship business, managing a global team of professional services, software engineers, and customer success managers. He then served as a Managing Director in SunGard’s Capital Market & Investment Banking group, overseeing a business unit team with a focus on providing the Capital Markets Interest Rate and Foreign Exchange solutions. Most recently, prior to the Reval acquisition by ION, Patrick was part of the executive team, as the Chief Customer Officer, leading the global professional services, client services, and client success teams. He holds a Bachelor of Arts in Economics from Saint Joseph’s University.