Looking to enhance your ERP’s liquidity management capabilities? has been saved
Perspectives
Looking to enhance your ERP’s liquidity management capabilities?
Explore how a supplemental treasury management system can help
While disruptive factors continue to put pressure on organizations to get strategic about liquidity management, some are already charting their way forward with innovative treasury management solutions. They are accelerating their journeys to a cloud-based financial management system and a supplemental treasury management system (TMS).
Why elevate your treasury management’s capabilities?
Recent disruptions, such as the pandemic and current inflationary conditions, have thrust treasury management into the spotlight. And with rising interest rates and a strengthening US dollar, many finance organizations are also turning to their treasury departments to proactively mitigate currency impacts upon foreign earnings and to enhance the use of internal liquidity over capital markets. These factors are putting pressure on treasury departments to elevate their operating models and to digitally transform their capabilities around financial risk, balance sheets, working capital, and payments while simultaneously reducing costs.
How are organizations responding?
Some are responding to these pressures by accelerating their digital transformation agendas and moving core capabilities into the cloud. They are also seeking to use internal and external data more extensively by enhancing their analytical capabilities. One way to accomplish these objectives is to combine a leading cloud-based financial system with the enhanced treasury management capabilities of a supplemental cloud-based system.
Treasury as a value driver
Supplemental treasury management systems generally offer in-depth functionality across treasury management and accounting, bank connectivity and payments, control and compliance, risk management, and supply chain finance. Accordingly, the business case for implementing a supplemental TMS can be compelling, especially for companies that need to perform complex intercompany lending, hedging, risk valuation, foreign exchange, and other intricate financial operations.
However, modernizing the treasury management function requires a combination of capabilities, including industry-specific knowledge of leading practices; functional specialties such as strategy and operations, risk management, financial advisory, tax, and cybersecurity; and highly experienced professionals with technical skills across the various enterprise resource planning (ERP) management ecosystems.
How a cloud-based TMS can help
It can integrate efficiently with your banking partners and other sources to automatically calculate cash positions and forecasts. This allows finance staff to spend more time analyzing data and maximizing returns.
It offers a centralized account management suite, with functionality such as signatories tracking, foreign bank and financial accounts (FBAR) reporting, bank fee analysis, and rate compliance.
It can have a payment hub function with built-in bank file formats and anti-fraud capabilities, which can be customized. This functionality can lead to faster implementation, enhanced controls, and reduced long-term maintenance costs.
It can enable tracking of both financial exposures, such as foreign exchange and interest rates, and financial instruments (e.g., FX, IR derivatives, debt, investments, and intercompany loans). It can also provide instrument-processing capabilities, such as valuations, hedge accounting, and risk analysis.
It can provide dashboards and reports tailored for treasury optimization, utilizing information from cloud-based ERP platforms as well as other internal and external sources.
TMS provides end-to-end connectivity with banks, counterparties, and peripheral systems (e.g., trading systems, market data providers, custodians, and issuing and payment agents) via its connectivity-as-a-service offering.
The way forward
The role of the treasury function continues to grow as a value-add partner of the chief financial officer and a strategic advisor to the business, while core treasury goals and mandates, such as liquidity risk management and being a steward for financial risk management, have become even more important in a world of volatile markets, tight supply chains, and rising interest rates. Download our report to learn how your organization can get strategic about liquidity management with a cloud-based financial management system and a supplemental TMS.
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Matt Hollander |
Darren Richardson |
Thomas Moloughney |
Jeff Suchadoll |
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