Cash Management
Offer a simple way for your organization to replace spreadsheets with automation, develop more timely cash visibility and secure greater payments control without the complexity of a TMS implementation.
The recent global banking headlines further highlight the changing economic environment, particularly hitting startups or those on a growth trajectory who may need more staff or infrastructure to quickly and efficiently manage their cash, payments, and risk.
This is a crucial part of the business strategy, often overlooked because cash and treasury management practices commonly operate on reduced budgets and limited resources.
Bank Rationalization
Multiple factors play into deciding which banks your company should do business with and which types of accounts and services to purchase from which bank.
While there is not a one-size-fits-all answer to rationalizing banking relationships, companies should not be afraid of having accounts across multiple banks if they are arming their finance teams with technologies to interface with the banks simply and efficiently.
Cash Visibility
Having access to all your cash positions in real-time or as close to real-time quickly and efficiently sounds simple, and many finance teams may argue they already have this capability.
However, many fail to recognize the inefficiencies, let alone the risks, of logging into multiple banking portals to manually extract and combine data into spreadsheets or other internal systems.
The goal should be a single finance portal to access all your cash positions in one place.
Process Automation
Automation plays a key role in enhancing your finance teams’ control over your company’s cash and how to quickly respond to the demands of your business, suppliers and customers.
There are multiple options and strategies to drive efficiencies through automation, which can be quite easily implemented in your organization.
Sweeps and Transfers
To respond quickly to cash demands, setting up sweep accounts through your financial institution can be highly beneficial to your business.
An alternative approach, which can reduce risk and give more control, is to set up automated sweeps and transfers through a cash management system, allowing your finance team to transfer funds in an automated way without relying on the bank’s online banking system.
Electronic Payments
With enhanced control and visibility over your cash, sending and receiving payments across geographies and currencies electronically delivers more agility, over issuing checks, and maintains your reputation as a company your customers find easy to do business with.
Forecasts and Reconciliation
As unforeseen circumstances arise, your finance team should quickly update forecasts and reconcile transactions, payables and receivables to ensure your financial period is closed quickly and accurately.
Integrating and automating the data feeds from your ERP with banking data and forecasts will help automatically reconcile transactions and post the information back to your ERP.
Other Considerations:
Compliance and Risk
It’s important to highlight that your finance team must meet new or existing compliance and risk mandates when introducing enhanced controls and new capabilities.
Bank Account Management
The authorized account signatories, documents and fees must be reviewed and stored in one place, ideally in a cash management system for tighter control.
Report on Foreign Bank and Financial Accounts (FBAR)
For companies with operations in the United States, the Report on Foreign Bank and Financial Accounts (FBAR) is a requirement by the Internal Revenue Service that should be filed and reported yearly. Ideally, this report should be part of the bank account management process within your cash management system.
Fraud and Risk Management
Preventing fraud and managing risk should always be at the forefront and integrated within the processes of your finance team, whether it’s ensuring the correct accounts and beneficiaries are being paid, or the levels of approval and other electronic security controls are all in place.
Bringing it All Together
Finance leaders and their teams are increasingly asked to help their organizations navigate external challenges, requiring them to adapt quickly and make cash management decisions.
There are multiple ways to address these challenges, and it starts by having a complete and real-time view of your entire cash management lifecycle.
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