Treasurers are being asked to do more with less as budget and time constraints impact corporates across multiple industries. Additionally, factors like the 2024 presidential campaign, flourishing bond market, and geopolitical unrest ultimately make it challenging to forecast the economic outcome with any certainty. Because of this unknown future, it’s critical that treasurers judiciously review their processes to make the most of their treasury operations and generate the most revenue out of every dollar.
In this article, we’ll focus on 5 essential areas to help transform your treasury team from a cost center into a profit center. From revamping manual processes to placing a greater emphasis on fraud reduction, this guide allows you to take your operations to the next level.
Guide to upgrading your treasury operations
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Evaluate your workflows
Examine the roles of team members and calculate how much time is allocated to different tasks. Ruthlessly re-evaluating workflow processes and determining if they’re adequate from both a controls and an efficiency perspective will set a strong foundation for your organization. For example, managing time critical payment requests with limited insight into the beneficiaries receiving the payment results in continuous calls/emails trying to chase down payment status updates.
If substantial time is lost to manual tasks, begin reevaluating what is being delivered from your bank, in which formats, and whether this information makes it easier to accomplish day-to-day tasks. While this examination may take more effort than simply defaulting to current processes, it has the potential to yield substantial improvements over time.
Taking time to reassess can also provide clarity when evaluating potential banking providers. Having a deep understanding of where the greatest business needs exist within an institution enables the selection of a provider uniquely suited to best fill them.
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Leverage data to move from transactions to actions
Appropriately architecting data for traceability and transparency provides an opportunity for treasury teams to transform data into actionable insights.
One example of this is cash flow forecasting-analyzing historical cash flow data and incorporating market trends, economic indicators, and customer behavior to predict future cash flow patterns. By infusing additional datapoints, treasurers are able to make more informed decisions and adapt their strategy to reflect a changing environment.
This meaningful data helps make more informed, strategic decisions that can positively impact operations, e.g. by encouraging payment efficiency, enhancing working capital, reducing banking fees, etc. It isn’t just data for data’s sake: it’s information to improve your team’s overall performance.
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Embrace the future of treasury
With ISO20022 becoming the cash reporting and cross-border payment standard, it can be beneficial to examine how APIs can enhance your operations. Upgrading systems and procedures provides a range of benefits, including better data, faster processing times, and improved compliance, just to name a few.
Treasurers who opt not to migrate will be out of standard beginning in November 2025 and consequently will be limited in both their operational efficiency and ability to customize services for customers, remaining vulnerable to payment delays, and subject to higher infrastructure costs.
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Optimizing cash flow for resiliency against the unknown
A focus on liquidity is always important for the health of your corporation, but as noted earlier, the changing rates and tech environment have made optimizing cash flow especially crucial.
To set your institution up for success, ask the following key questions that can help you plan for the next year:
- Are you evaluating the durations for your liquidity tables?
- How should you think about cash through 2024 to ensure that both the risk and return profiles are managed effectively?
- How can liquidity be optimized in a falling rate environment?
Proactively assessing your cash flow with a critical lens can help avoid surprises later in the year.
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Never need to call your bank’s customer service department again
Analyze your procurement processes and procedures to ensure they can't be spoofed and have a defined process in place for approving payments. If there is a payment that does not adhere to the normal protocol, make sure the necessary processes are in place to identify it. You can protect your organization against these threats by adhering to cybersecurity best practices and using data intelligently, such as by harnessing the power of advanced AI techniques to create patterns and quickly recognize anything that’s an outlier.
Optimizing treasury operations improves automation and efficiency, reduces fraud, and supports future growth. Implementing the appropriate framework allows companies to withstand a myriad of market conditions without sacrificing the health of your treasury operations and enables your organization to respond to evolving expectations.
