Any good treasurer knows that the ball is always rolling. As an engaged treasurer, it’s essential to keep tabs on the company’s financial health anytime, anywhere. A treasurer’s scope of work includes cash visibility, cash management, liquidity, cash positioning, monitoring risks, provisioning for working capital requirements and more. Keeping an eye on and monitoring all the financial activity isn’t an easy task. With the help of seamless bank connectivity, treasurers can get an accurate picture of finances.
Bank connectivity is an everyday problem that all sizes of companies face. Some see it as a hassle, while for others it’s taking time away from more important strategic tasks. Whether or not a business uses the jargon, they are probably employing some form of ‘bank connectivity’. That lack of seamless connectivity with banks is like a pebble in the shoe, and somewhere along the walk, it will start hurting.
Signs that your business needs to re-think bank connectivity
Manual data entry
It’s common knowledge that manual processes can be tedious and time-consuming. For over a decade, computer-driven solutions have been replacing manual tasks, yet it’s surprising that a sizeable number of businesses still haven’t made the switch. Accessing account statements or processing cheques manually is not an optimal use of time for treasury teams. It adds to their load for no reason, time which could be utilized in strategic initiatives.This could be better used in strategic initiatives to grow the firm.
Limited visibility
Between managing accounts, data entry and checking balances; cash visibility goes for a toss. Other treasury management efforts like cash forecasting or cash positioning require the team to burn the midnight oil. Manually processing data can lead to error-prone or outdated data, which doesn’t give the true picture of the company’s balances. Surely, there is a better way to do things?
Unsecure data sharing
Keeping data safe is a priority for any business. As the money center of the business, any treasury related activity needs safeguarding. Encrypting data transfers is key to keeping fraudulent activities at bay. Treasury-specific threats include payment fraud, supplier fraud, business email compromise, imposter fraud, rogue treasurers, ransomware, account takeover, and fake invoices and purchase orders.
Complicated bank account structures
Generally, businesses have multiple bank accounts through which transactions are made. Given an enterprise’s operations in different geographies, payments are often in different currencies and follow different regulations. The mode of business transaction may also differ as they could be over a wire transfer, cash, cheque or any other way.
Although there are different options available in the market, a cloud-driven Treasury Management System (TMS) solution is the best bet for a treasury team to unify critical transactional data with seamless bank connectivity.
Benefits of a cloud-driven bank connectivity capability for treasurers
Save time with automation
Opting for an appropriate bank connectivity tool can help the treasury department save precious time and focus on strategic decision making. For instance, accessing 30 banks on various banking platforms at least thrice a week can take up half a working day with multiple log-ins, downloads and consolidation of all the data into one place. Ideally, all this work should be automated simply because it can be. There is no real need for human intervention.
Real-time visibility into company’s financial health
Since data is automated and it’s also possible to run analysis and get reports via the cloud solution, it becomes easier to see the bigger picture of a company’s financial health. This critical data is necessary to forge ahead in terms of cash forecasting, liquidity management, cash visibility and more.
Data is protected
By automating data transfers, fraudulent activity becomes unlikely. Since the data isn’t collected manually, it reduces the chance of hampering the company’s payment data before sending it to the bank partners.
Managing complexities
Juggling 19 banks, 100 accounts, 20 currencies, 22 entities in 30 currencies for financial services just became a cinch. Since all banks are able to ‘talk to’ each other regardless of mode, regulation, channel, format- treasurers don’t have to be overburdened with these processes. With multi-bank connectivity, these complexities can be managed with ease.
As a treasurer, it’s essential to smoothen processes wherever possible so that time can be dedicated towards core treasury activities. Though bank connectivity might seem like a small tool, it can prove to be extremely helpful in the long run, especially when it comes to reducing manual work needed from treasury teams. For better global bank connectivity, it is possible to switch to a cloud-based bank connectivity solution that will provide better performance and security for your organization. Download the bank connectivity e-book.
FAQs
What Is Treasury Management? Treasuries are the custodians of cash in a business, they control this through 1) the amount held and 2) its liquidity. The two levers of this are through the sheer size of the balance sheet and the relative stickiness (liquidity) of assets and liabilities held.
What are the key attributes that corporate treasurers look for when selecting a relationship bank? ›
Strong Bank Balance sheet, assets size and Cash Reserves, Strong Ethics, Governance, Compliance. Bank Geographical Footprint. Huge Product knowledge, expertise and offering.
What is the meaning of treasury management in banking? ›
Treasury management is the act of managing a company's daily cash flows and larger-scale decisions when it comes to finances. It can provide governance over a company's liquidity, establish and maintain credit lines, optimize investment returns, and strategize the best use of funds.
What is the main role of the Treasury? ›
Treasury involves the management of money and financial risks in a business. Its priority is to ensure the business has the money it needs to manage its day-to-day business obligations, while also helping develop its long term financial strategy and policies.
What is the role of a treasury accountant in a bank? ›
A Treasury Accountant manages the company's money to ensure they can cover their day-to-day liabilities. They will track the money moving in and out of the bank accounts to optimise cash flow and minimise any financial risk.
What is the main goal of the Department of treasury? ›
The U.S. Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and ...
What does a treasurer need to know? ›
Analytical skills
Treasurers review and analyzing financial documents to prepare financial forecasts based on past and projected financial activity reports. This work requires the professional to analyze past trends while making educated decisions about the future.
Why does a treasury department need to build bank relations? ›
The importance of the relationship between treasury professionals and banks cannot be overstated. It's one that needs to be managed as closely as any other treasury risk, as positive banking relationships create a system of financial stability and resiliency.
Why would you be a good fit for treasurer? ›
Treasurers must be transparent about their company's money movements when communicating with important stakeholders who can provide resources. With deep knowledge and perspective, the treasurer should be able to explain the company's finances and advocate for their needs when necessary.
What are the two main areas of treasury management? ›
The two main areas of treasury management are cash management and risk management. Cash management involves optimizing cash flows, liquidity, and working capital, while risk management focuses on identifying, assessing, and mitigating financial risks such as interest rate risk, foreign exchange risk, and credit risk.
Treasury is organized into the Departmental Offices, operating bureaus, and inspectors general. The Departmental Offices primarily formulate policy and oversee the bureaus, which manage major operations.
What is the role of Treasurer in a bank? ›
The Treasurer is the person who has to ensure that bank accounts are managed well, cash and cheque are deposited, bills are paid, records are kept, budgets are prepared and adhered to and incoming as well as outgoings are backed properly.
What is the primary responsibility of the Department of treasury? ›
The Department of the Treasury manages federal finances by collecting taxes and paying bills and by managing currency, government accounts and public debt.
What is the main job of the treasury Department? ›
The Department of the Treasury manages federal finances by collecting taxes and paying bills and by managing currency, government accounts and public debt.
What is the job description of a treasury department? ›
Duties include performing risk management, overseeing cash management procedures, managing investments, developing financing strategies, maintaining relations with banks and rating agencies, preparing budgets, implementing relevant legislation, and providing financial advice.
What is the difference between finance and treasury? ›
The key difference between treasury management and financial management is that treasury management focuses on the management of an organization's short-term liquidity and financial risk, while financial management focuses on the management of an organization's long-term financial performance and strategy.
What is the difference between cash management and treasury management? ›
In summary, cash management is a subset of treasury management, focusing on short-term cash flow management (day-to-day cash flow operations) while treasury management involves a more strategic approach to managing a company's financial resources, encompassing a wider range of financial instruments to maximize a ...
