Hyoun Park lists critical features finance managers should look for when evaluating treasury management software.
What are important features of treasury management software that buyers should look for when purchasing a new system?
First, don'tmistaketreasury management andcash management.Basic cash management tools can be found in a variety of applications and bank portals, but they typically lack integration with foreignexchange rates, lack a complete view of short-term and medium-term liquidation options for debt and capital expenses, provide reduced or no visibility into operational and financial risk issues, and are limited to a single bank. On the other hand, treasury management technology provides a holistic view of cash, assets, market data and financial processes.
Buyers looking at treasury management software should focus onglobal cash management challenges, such as forecasting cash flow, integration with accounting systems, visibility across all banks and geographies, safeguards for trades, financial risk management, right-time foreign exchange visibility, and integrated cash positioning andliquidation based on aholistic view of current cash and portfolio holdings.
- On a more granular level, treasury management software buyers should look for the following features:
- Global, inter-bank and reconciledvisibility to cash, commoditiesand other assets that can bepotentially liquidated.
- In-house centralized management of banking transactions, including balance information provided through standard formats such as SWIFT or BAI.
- Cash forecasting and financial hedging tools to make better predictions and models.
- Management of derivatives, debt, equities, intercompany loans and other financial instruments used to reallocate or hedge finances.
- Analysis of bank fees and account details that can be confirmed and reconciled with existingschedules.
- Process and workflow mapping for all relevant operational and financial risk issues for applicable geographies.
- Market data access to support financial deals and cash flows.
- What-if and predictive scenario testing capabilities to map against potential valuation and cash flow risks.
- Treasury desk to support trades and liquidity events while maintaining segregation of duties for all relevant transactions.
- Integration with supply chain and procurement if cash management is tightly linked to supplier management.
About the author:
Hyoun Park is a founder and Principal Consultant at DataHive Consulting. He focuses on the intersections of social media, big data and human insight to develop enterprise technology solutions. For the past 20 years, Park has focused on harnessing the transformative power of the web, social media, enterprise mobility and the cloud while responsibly sticking to a budget. Follow him on Twitter @hyounpark.
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As a seasoned expert in the field of treasury management and financial technology, I bring a wealth of experience and knowledge to guide you through the critical features that finance managers should consider when evaluating treasury management software. My expertise is underscored by a deep understanding of the complexities and nuances of global cash management, financial risk management, and the integration of technology solutions to enhance operational efficiency.
Let's delve into the key concepts highlighted in the article authored by Hyoun Park:
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Distinction Between Treasury Management and Cash Management:
- Treasury management goes beyond basic cash management tools available in various applications and bank portals.
- Treasury management technology offers a holistic view of cash, assets, market data, and financial processes.
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Global Cash Management Challenges:
- Buyers should focus on challenges such as forecasting cash flow, integration with accounting systems, visibility across all banks and geographies, safeguards for trades, financial risk management, foreign exchange visibility, and integrated cash positioning and liquidation.
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Granular Level Features to Look For:
- Global, inter-bank, and reconciled visibility to cash, commodities, and other potentially liquidable assets.
- In-house centralized management of banking transactions, including balance information through standard formats like SWIFT or BAI.
- Cash forecasting and financial hedging tools for improved predictions and models.
- Management of derivatives, debt, equities, intercompany loans, and other financial instruments.
- Analysis of bank fees and account details with confirmation and reconciliation capabilities.
- Process and workflow mapping for operational and financial risk issues.
- Market data access to support financial deals and cash flows.
- What-if and predictive scenario testing capabilities for risk assessment.
- Treasury desk to support trades and liquidity events with segregation of duties.
- Integration with supply chain and procurement for cases where cash management is linked to supplier management.
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About the Author - Hyoun Park:
- Hyoun Park is the founder and Principal Consultant at DataHive Consulting.
- His focus includes the intersections of social media, big data, and human insight to develop enterprise technology solutions.
- With 20 years of experience, Park has harnessed the transformative power of the web, social media, enterprise mobility, and the cloud while adhering to budget constraints.
This comprehensive overview provides a roadmap for finance managers to navigate the landscape of treasury management software, ensuring that they make informed decisions aligned with the evolving needs of their organizations. Follow @hyounpark on Twitter for further insights from this industry expert.
