Most corporations today don’t have a treasury management system and are still reliant on spreadsheets to manage their treasury operations, which is not only time-consuming and inefficient, but cause major issues, especially for corporations operating on a global level with multiple payment hubs.
Implementing a treasury management system, however, can streamline your organization’s operations by making your treasury more efficient, improving financial risk management and treasury controls as well as strengthening cash management, which can lead to lower costs over the long term. Here are some of the benefits a treasury management system can provide in more detail:
Saving Time and Money with Automation
The first and most obvious benefit with a treasury management system is that it enables automation, which means a corporate treasurer has more time to focus on strategic tasks, including dealing with regulations, risk and cash flow projections.
Improving Cash Management
One of the most critical functions of the treasury department is cash flow forecasting as everything else flows from this one discipline, including funding and investing decisions. However, an efficient cash flow forecast can be complicated to achieve when the treasury department is forced to consolidate information from multiple systems manually, which can lead to errors.
With a treasury management system (TMS), the treasurer now has the ability to centralize data from all the corporation’s units, allowing for a more effective and accurate cash forecast. Using this approach, a treasurer can also more quickly analyze the company’s historical bank transactions and more easily integrate data from other financial systems. What’s even more important is that the treasury department will be able to align cash flow projections with the company’s requirements, thereby generating more cash from within the company and limiting the need for external borrowing.
Essentially, a TMS will help achieve greater cash visibility, allowing for better decisions to be made over the long-term. And this visibility is not only more accurate but can extend over a greater period of time than anything a treasury department could achieve trying to carry out all these tasks manually.
Creating a Payment Hub with a TMS
A TMS can help improve your corporation’s accounts receivable and accounts payable processes. A treasury management system can be used to create a payment factory for accounts payable by importing the information from various systems. Payments can then be batched and instructions can be sent to the banks your company works with. This approach means that your company is centralizing payment executions and forecasts in a single system, again allowing for better and faster decision-making.
Create accurate forecasts
By consolidation all accounts receivable in the TMS, your corporation will be in a better position to create an accurate forecast. This way, your treasury department will be more efficient in identifying those clients who aren’t abiding by stipulated payment terms, who can then be followed up with. Additionally, for a more accurate view, expected receipt dates can be adjusted to reflect the payment history of each party.
Minimizing Risk
A TMS gives you improved insight into your organization’s cash position as well as increasing the level of control you have over transactions and this, implicitly, leads to better risk management.
For example, working on a global level exposes a corporation to foreign exchange risk, which can be minimized with the use of a TMS. The latter can be used to automatically monitor foreign exchange movements, and transactions and decisions can be made according to these movements to help reduce risk.
Managing cash and liquidity is an essential discipline in any and every company to ensure the most efficient and effective management possible. In the current ever-changing and challenging economic environment, one way for companies to gain a competitive advantage is by ensuring they are managing their cash position as efficiently as possible, and the best way to do that is through the implementation of a treasury management system.
Our aplonCash TMS application can do all this and more. Take a quick look at our architecture and click on the image below for more information

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