Treasury management without the use of professional tools to underpin treasury processes seems more and more unthinkable in a modern, technology-driven world.
While the specifics may vary, the overall reasons for implementing a treasury system are the same across the board of corporate treasury: streamlining and automating processes; reducing and doing away with manual processes; and boosting efficiency.
Treasurers want to be freed of repetitive, tedious manual jobs, such as gathering data from subsidiaries. They want to focus on decisions that bring real value to the company and their implementation.
Digitisation has made things faster, and the world feels smaller as a result.
Treasurers future-proof their business – so we need to make sure we future-proof treasurers in the best possible way
A seemingly inconsequential event anywhere in the world can have huge repercussions for businesses – and this is no longer true for only large multinationals, but increasingly also for smaller companies.
Nearly everyone is active on a global level these days, and treasurers the world over are forced to stay abreast of any economic and political developments. They need to think ahead, but at the same time be able to act on the spot if need be. They’re the ones managing liquidity; they’re the ones hedging risk; and, as such, they’re key players in any business.
It should therefore be any company’s top priority to make sure treasurers have what they need to meet the challenges of their profession and the increased demands globalisation has placed on them.
So how can we best support treasurers in their work?
It is important to remember that every business is different and that there may be more than one way of achieving this ultimate objective of treasury: underpinning a company’s every financial move and ensuring a sound strategy that safeguards liquidity and boosts profitability – weathering any political or economic turbulences.
Software as a service (SaaS) has made the lives of treasurers much easier: cloud-based systems have allowed them access to group-wide data at the touch of a button, in real time, regardless of their location. This has brought a considerable reduction of treasurers’ workloads.
Nevertheless, there is a powerful trend towards even more automation, and even more focus on the way a corporate treasury adds strategic value to a business.
Even with considerable automation by means of a treasury management system (TMS), companies might still be left with daily tasks that exceed their capacities. Or they may simply choose to focus their energies even more on what they can do with the results a treasury application provides.
Whether you have a treasury set up, but would like to spend your time differently; or whether you don’t have a treasury, but would still like to benefit from the added value treasury data and management can bring, the key to both can be outsourcing – via Treasury as a Service (TaaS).
Echoing SaaS, TaaS goes beyond mere technical support. It aims to meet the very objective of modern treasury even more pointedly: eliminating inefficient and repetitive tasks that can easily be performed by someone else who is familiar with the system and understands treasury processes.
While using a TMS does make life that much easier, it is still an application treasurers need to spend time on. It requires implementation, training and maintenance.
For some treasurers, it might indeed be time to ask themselves: am I really running my treasury, or am I running my treasury system? Am I putting the data in my TMS to optimum use? What if I could boil things down to the point where I am left with strategic decision-making as my only real ‘task’?
We’ve already mentioned the important role of treasurers for sensitive and crucial financial issues: where is excess liquidity tied up that could be used elsewhere? Which investments are needed and who needs an intercompany loan? Which risks need to be hedged?
Or, to put it in even more practical terms, how do I ensure my company is unaffected by any potential repercussions that Brexit might bring?
Treasurers need to be enabled to stay on top of these decisions, to have complete visibility and to use their overview to their strategic advantage.
Treasurers need data and results. They may also want the application, but they may also not. Let’s put this in non-treasury terms: who today is still willing to pay for an app on their smartphone? Hardly anyone. It is more or less taken for granted that apps are provided for free.
Now, the actual data, the results, are a very different matter. Yes, we might be willing to pay someone for providing us with the information we need to take further action. If someone presents me with the complete results, all neatly prepared and geared towards my requirements, and all I need to do is say yes or no – that represents a service that really makes my life easier and that has real value for me.
The specific treasury services a company might require depend very much on size and strategy. There are a number of non-mission critical and non-core competence processes in treasury. In theory, TaaS can cover any corporate treasury operation and can be made to fit any functionality required. It is all a question of capacity, focus and, ultimately, preference.
As a company, you might have certain tedious, recurring treasury processes that you simply don’t want your treasury staff spending their time on and allocating their resources to. Or you might have more complex requirements that would mean having to buy in outside expertise. Or you may not even have a treasury in the first place.
TaaS can support any role in a corporate’s front, middle or back office, including:
You keep the responsibilities you want to keep (or may have to with a view to compliance), for example, payment authorisation, and outsource everything else – flexibly and accommodating many different corporate requirements and needs.
Using powerful treasury software solutions or outsourcing with TaaS, both options meet the needs of today’s business issues, whether it is compliance, risk, corporate development, forecasting, analytics or capital strategy.
Treasury has the data, the insights, but also the analyses needed for many possible scenarios, and treasury delivers a sound basis for navigating any economic or political storms. Treasurers future-proof their business – so we need to make sure we future-proof treasurers in the best possible way.
Services are the future, and treasury is no different here. Let’s build on the achievements SaaS technology has brought us and take the next step. Let’s embrace the service component of treasury, and listen to what corporate treasurers really need.
Martin Bellin is the founder and managing director of BELLIN Group
