5 Steps to transforming treasury management

Treasury And Cash Management


Kevin Grant

Feb 24, 2022

It’s arguably the most important function at any financial institution or company of any size. The treasury function connects to cash management, liquidity and forecasting for the future. Yet, the role and definition of the “treasurer” is changing to the point that a report from PwC actually started by questioning the current role of the treasurer with the question “does every company understand what falls under the treasury function?”

And now more than ever, the treasury function is seen as a valued partner in driving strategic decision-making across organizations. In fact, the 2020 AFP Strategic Role of Treasury survey report found that 68% of respondents believe that the valuation of the treasury function will continue to increase over the next 3 years.

As treasurers evolve and rise to the challenge, there are 5 steps to consider when transforming your treasury department into a strategic treasury management machine:

  1. Automate and standardize processes: manual, disconnected processes are barriers to agility. The last couple of years have starkly demonstrated the importance of flexibility and the ability to make and act on decisions quickly and efficiently. Auditing current processes from the top down to identify weak points will lay the foundation for eliminating potential hiccups.
  2. Prioritize scalability and connectivity with an agnostic platform: invest in a treasury platform that is independent of your banking partners. Bringing the platform in-house allows for realizing efficiency gains such as a single platform to share information with multiple banks and puts control where it belongs.
  3. Build an integrated solution to consolidate financial data: treasury and finance teams manage a huge and evolving amount of financial data. The managing of which can be complicated by expansion, mergers and acquisitions, and compliance requirements. Wrangling the sheer volume of data can take employees away from analyzing that data, which is critical to informing strategic decision making. Integrating treasury, accounts payable and account receivable systems will provide a real-time view of all financial data.​​​​​​​
  4. Aim for full visibility into global cash flow: full visibility into cash flow is the only way to get an accurate view of your company’s financial health. This knowledge can aid in minimizing risk exposure and strategic planning for long-term growth.​​​​​​​
  5. Focus on liquidity risk management: as senior management focuses more on liquidity and risk exposures, it’s important to successfully implement the first 4 steps outlined above. Building that framework will make it possible to manage liquidity through unforeseen external threats and ensure long-term success.

In the current environment it’s important for treasurers to continuously review and reassess how they manage liquidity. Define, redefine, and modify as necessary. The responsibility will continue to fall on treasury to protect businesses from volatility and also strategically manage liquidity to add financial value and contribute to growth.


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Treasury Management

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Kevin Grant

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