What is the True Value of a Treasury Management System?

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What is the True Value of a Treasury Management System?

CFO Tech Outlook | Friday, August 14, 2020

A treasury management system is a logical next step for treasurers to hone their focus on.

FREMONT, CA: Over the past few years, the value of treasury management systems (TMS) has evolved dramatically. The advantages of a TMS used to be all about time savings, enhanced efficiency, and better productivity. The value of a TMS is not in what it saves, but rather in what it enables and a TMS brings many benefits that drive a compelling return on investment. Key benefits include the following. Top 10 CPM Consulting/Service Companies - 2020

Cash Visibility

Visibility is one of the most common terms in the treasury. Cash visibility allows decisions to be made in a way that drives enormous bottom-line value. But, to be truly effective, cash visibility must include cash forecasting so that treasurers have confidence in what cash (liquidity) is available. This enables the treasury to capture additional benefits on investments, pay down debt or make less cost borrowing decisions, offer liquidity to take advantage of supplier discounts, and better the effectiveness of a previously underhedged cash flow hedging program. A TMS offers visibility and flexibility in developing forecasting models and delivers confidence in the forecasting by offering detailed analysis, so treasurers can perfect the forecast and be more confident in its conclusions.

Financial Controls

Fraud and cyber threats are significant risks that CFOs must proactively handle. Hence,  implementing improved financial controls has become key to ensuring effective risk mitigation plans. Significant control features in a TMS that help reduce errors and fraud include multi-factor authentication, IP address filtering, dual administration, separation of duties, digital signatures,  payment modification controls, and payment watch list screening.

Reductions in Bank Fees and Costs

The bank fee is a high cost of a treasurer’s annual budget. Fortunately, there are opportunities to gain bank fee savings in TMS, including bank reporting, user access, data storage, transaction netting, and bank fee analysis.

Besides the many ways that a TMS can add immediate and recurring value to the CFO and treasurer, the best development in TMS is its affordability. The value of implementing a TMS is compelling, and the ROI for treasury technology will look much better in the coming years.

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