Who needs treasury automation anyway?

Sooner or later, finance operators discover that, as their companies grow, managing daily treasury operations becomes increasingly complex and time-consuming.

Daily tasks and operations, such as cash positioning and reporting, accounts balancing, payments, and FX conversions, begin to pile up and become challenging to manage manually. Teams that wish to maintain full visibility and control resort to spending more and more of their precious time and resources on these labor-intensive chores. Time that could be better spent on more strategic tasks.

The solution is simple, yet critical: automating treasury processes.

After speaking with over 200 CFOs, treasurers, and finance leaders, we've identified two key types of complexities that make it impossible to scale efficiently, and make the need for automation abundantly clear.

Cash Footprint

Companies that own multiple accounts, spread their financial activities across several banking partners, platforms (processors, expense managers, wallets, etc.), legal entities, or currencies, find it virtually impossible to run even basic performance analyses – like getting a snapshot of their current cash position.

To add to this complexity, building direct cash reports manually, in an effort to ensure full control, explain current position, and understand cash trends – is borderline hopeless. 

The amount of data collection and processing, as well as the work required to create these critical visibility tools, brings companies to reduce their reporting cadence. In other words, instead of a daily cash position and weekly cash reports, companies opt for bi-weekly, monthly, or even quarterly reporting frequency.

This means that by the time these companies look at their numbers, they are already far behind the curve and any decision their teams take is based on lagging data. 

Imagine your life if Waze told you to make a right turn 10 minutes after you passed the junction. Useless, right?

Cash flow complexity

Finance teams that deal with the following complexities:

1. Growing volumes of inflows and outflows
2. Significant working capital – inventory, long collection cycles, prepayments, etc
3. Capital intensive businesses, with high CAPEX or frequent M&As
4. Credit lines, loans, or cash deposits that are baked into their financial structure

These are just a few examples for cash flow complexities that call for constant monitoring of past, present, and future cash flows. Finance teams in these companies have to make daily, time-draining decisions to ensure that the timing of their inflows meets the timing of their outflows in an optimal way. 

But to make informed decisions, finance teams must have an accurate cash position and a detailed rolling cash-flow forecast, and manual maintenance of these processes simply doesn’t cut it anymore. Reducing reporting granularity levels or cadence are not the solution either, because getting it wrong means higher interest payments on credit lines, lower interest income on interest-bearing accounts, unnecessary fees, more unpleasant surprises, and higher level of risk to relationships with both suppliers and customers. 

Bottom line – higher costs, lower profit, increased risk.

If you can identify with any of the above challenges, don’t stress and know there’s a better way. Cash flow and treasury management processes don’t have to be painfully lengthy, and automating them can actually help your company meet critical performance KPIs while freeing your time to focus on bigger, better things.

To learn more about the future of treasury management and the automation tools you have to get familiar with in 2024, fill in the form by clicking below.

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