Time is money. So, it isn’t lost on you that there’s a lot of expense involved with having your finance team log in to various bank portals, transfer balances onto spreadsheets, and perform tedious calculations just to get a handle on your cash position. But it turns out that managing cash manually and monitoring it with spreadsheets comes with several other hidden costs as well.
- If the organization is facing a crisis, like a significant revenue drop or unexpected expenses, you might have limited contributions to a strategy pivot since you can’t tap into real-time insights. Once you’ve turned things around and your CFO wants to know if it’s an appropriate time to acquire a competitor, you might fall short again and not be able to provide the certainty they need since your numbers are stale or missing. When you can pull up your cash and liquidity positions with the click of a button, however, you can be a far more agile and active collaborator in the business.
- It’s also tough to keep up with every finance-related law, regulation, and standard when there’s no centralized treasury system in place, so your compliance risk can be higher, too. Take Foreign Bank Account Reporting (FBAR), which requires any US-based corporation that has ownership or control of foreign accounts with an aggregate value of $10,000+ in the calendar year to file certain data with the IRS. Compiling everything you need manually can take hours, especially if there are several bank accounts requiring paperwork. But with many of today’s cloud-based treasury solutions, you can produce the needed report (and many others) in minutes, getting the required information to the necessary parties easily and in a fully compliant fashion. Plus, you can also proactively find and tackle potential compliance issues with 100% visibility into your whole treasury operation in one place.
- Managing cash with spreadsheets and antiquated systems is also a drain on your talent. Today’s employees want to contribute in meaningful and impactful ways – not spend their time tallying up account balances or extracting data from various teams and systems. If this is the only work that’s available in the treasury department, and your systems and processes leave a lot to be desired, you risk losing employees. Then, you need to spend significant time and resources on backfilling. This isn’t an ideal situation given that almost 60% of treasury and finance functions reported a talent shortage in 2023.
- Managing your organization’s cash manually also impacts scalability. As you grow, you’ll need more and more employees to keep up with the work and get the job done. We just discussed the difficulties related to that. If you centralize treasury operations into a comprehensive and user-friendly tool, on the other hand, your existing headcount can handle more banks, bank accounts, currencies, and subsidiaries as you expand geographically, for example. Increasing operational complexity is a lot easier to handle with the right tech solutions solidly in place.
Costs of Transforming Cash Management
Slow, inefficient cash management workflows aren’t going to cut it for these reasons, and others. But there’s a cost to upgrade, too. A bit of a balancing act needs to happen as a result.
Traditionally, many companies have jumped right to Treasury Management Systems (TMS). But these tools are very costly and take months (or years) to stand up, which delays any return on investment. A TMS can also require the help of outside consultants to deploy, adding significantly to the overall cost.
There are other strong contenders available these days in the form of SaaS treasury management tools. They offer the same robust functionality around cash visibility, cash forecasting, reconciliation, and cash optimization but come with much more appealing price tags. They provide the functionality you need, so they’re easier to launch and enable treasury teams to extract value quickly.
There aren’t added or unforeseen costs as there can be with other types of treasury management tools, the modern solutions are typically a SaaS subscription and a minimal implementation fee.
Today’s Cash Management Tools Do More Than Improve Visibility
Effectively managing your organization’s cash is critically important and getting there is even more achievable these days with the treasury management tools on the market. Getting these solutions in place can have the added benefits of improving your decision-making abilities, boosting compliance, aiding employee retention, and empowering growth.