How to do global treasury management from the cloud

Globalisation has driven organisations to manage subsidiaries, customers and vendors across multiple regions and markets. Today’s treasury departments are therefore faced with the growing demands of international operations in different countries, currencies, languages, and regulatory environments.

To address these demands, it’s become essential for the corporate treasurer to handle financial transactions and banking relationships around the world, requiring more controlled and efficient global treasury processes that are flexible to each market.

At the heart of this, cloud-based treasury management solutions (TMS) offer treasury departments greater control of all financial functions, enabling them to better optimise and protect cash, and deliver strategic execution of growth plans.

Growth and globalisation

As businesses grow, there is a tendency for finance teams to become decentralised, as they open up operations and bank accounts in multiple countries quickly to meet demands of the business.

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A cloud-based treasury system enables treasurers to control the hugely complex logistics of moving money around, in and out of various countries, supporting their cash management and forecasting needs across the globe.

With this technology, a centralised treasury team that does not have presence in each country the business operates can maintain control of all data and business processes, scaling them up or down as required and becoming a real asset to the wider business.

By collaborating with other areas of the business, a global treasury department can deliver meaningful insights and analysis that impacts on an organisation’s strategy and financial results. New light can be cast on risk management, for example, cash flow forecasting, and the management of financial processes and decisions.

Plugged in across an entire organisation, a powerful cloud-based TMS is able to communicate automatically with third parties such as that organisation’s banking partners, enabling bank accounts to be managed quicker and more easily.

Real-time data can be pulled from all the relevant elements of the organisation’s financial ecosystem. This data can then be used to calculate comprehensive overviews of cash positions, and provide real-time visibility of all payments and collections currently in progress.

Furthermore, by combining this data with information on the full range of payables and receivables held within an organisation’s ERP and accounting systems, the treasury team is able to generate best-practice cash forecasting. In doing so, they will be in a better position to support senior management in planning and driving the growth of the business.

Minimising risk

Expanding financial operations on a global scale introduces significant risk to the organisation’s cash flows and financial assets. Treasurers must protect again changes in currency rates, liquidity risk in each geography, regulatory risk heightened by the multitude of regions the organisation operates in, and of course operational errors and fraud that commonly increase as firms decentralise their processes and control internationally.

To help organisations implement effective solutions to reduce or eliminate these risks, treasurers will require a global treasury management system to provide them with global visibility into risk exposures as well as mechanisms for risk mitigation.

Employing a TMS not only offers risk reduction for treasury teams, whether it be a hedging programme, fraud prevention, or a disaster recovery plan but, even when an organisation’s finance operations are fragmented, it can make certain that policies and controls are fully consistent with the wider, international vision for the company.

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A TMS can further minimise risk by automating potentially error-prone manual tasks such as investing and borrowing calculations, bank fee analysis and cash reconciliations.

Finally, and perhaps most importantly, a TMS can measure the effectiveness of a risk management programme, allowing for the feedback necessary for refining and improving the programme as it develops.

In summary

Traditional barriers to treasury globalisation are fast falling away, and cloud-based systems are a requirement for finance teams to gain the real-time global visibility needed to strategically support the organisation and create business value. Fortunately, acquiring and implementing treasury management systems has become infinitely easier due to the cloud model, making treasury technology cheaper, more accessible, and more value-added than ever before.

Source from Bob Stark, VP of strategy, Kyriba

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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