Technology At The Service Of Treasury Management

Each new technology constantly changes and challenges the existing system. Businesses adapt their departments to new tools, and one such sphere that is undergoing change is treasury management.

Treasury serves as the foundation of all companies because it handles the funding and liquidity needs that are important for the stability of the business. Treasury management software automates corporate treasury activities, including cash, investment, debt, trade finance, and financial risk management. A treasurer should ensure that he does not keep operations opaque, remains accountable, and make sure that all of his actions are visible and have a clear objective.

Treasurers have started using technology to tackle all these requirements since doing so manually is nearly impossible. This is why we are witnessing the rise of innovative solutions in treasury management. Let us look at how technology is evolving the landscape of treasury management.

Use of spreadsheets

Around one-third of all treasury managers take the help of Excel to make their work easier. Using a spreadsheet is a very easy and straightforward task. However, ensuring that the cash and risk are well-managed using Excel might be difficult sometimes. Scaling spreadsheets might be a challenge, and some errors can show up too.

Apart from the above-mentioned drawbacks, spreadsheets do not offer much transparency and have poor analytical functionalities. However, it still remains a popular choice among financial professionals. They feel they can complete all their tasks easily with Excel.

Handling the extra competition

When there is growth in the market, it automatically leads to new entrants. When companies use technology, they effectively cut their costs and safeguard their current market share.

Treasury and other departments like procurement and sales are held accountable for maintaining financial discipline and ensuring that KPIs are as per expectations. They also have to decrease the cost of products and boost the efficiency in operations.

With the help of technology, companies have ensured a steady flow of internal funding and have allowed big tech firms to constantly provide excellent shareholder returns. This has allowed companies to fund their capital expenditure and receive an uninterrupted flow of innovation.

Payments becoming digital

A lot of work has to be done in the processes that involve the procure-to-pay. system. There are many steps ranging from the generation of invoices to settling them. These procedures demand huge amounts of the necessary paperwork, coordinating with many banks and bankers, and a lot of redundant reconciliations that take up a lot of time.

Banks are urging treasurers to make this process as simple as possible, taking the necessary actions. However, some fintech startups are solving this issue using their comprehensive and agile solutions. There are several technologies, such as digitizing the entire procure-to-pay procedure and discounting.

These new-age technologies are a good solution to the various bottlenecks faced by treasurers. They can use them to manage the treasury resources and lead them on the right way without having to modify the existing IT systems and infrastructure.

ERP tools

Close to 7% of treasury professionals admit that they use various modules of Enterprise Resource Planning (ERP) systems. However, treasury management has a specific set of requirements, and ERP is not built to handle that.

ERP systems do not have the necessary adaptability to serve the treasury well. Moreover, it is not possible to integrate them with third-party solutions, which is a major drawback.

Conclusion

The technology sector has a growth rate that is highly unlikely to slow down anytime soon. It is the kind of industry that does not want to limit itself and constantly moves out of its comfort zone to serve all sectors.

This is the sole reason that it has also helped treasury management and made the work of finance professionals a lot easier and straightforward.