With scale comes complexity, regardless of the industry. And when that scale is in the form of transaction numbers, it becomes a pretty daunting challenge for many treasury teams. Businesses with high transaction volumes are often hamstrung by manual processes and limited oversight, which forces them to operate more conservatively than they might otherwise.
Even then, maintaining a clear understanding of the financial position is difficult, which flows through to challenges in other areas like reporting and forecasting.
But there are now tech solutions that can help solve this problem, in a way that manual processes will simply never be able to do. In this article we’ll look at the tools and strategies your treasury department needs to manage high transaction volumes efficiently.
The Challenge of High Transaction Volumes
High-volume transactions generate massive amounts of data, including customer details, sales trends, and financial performance. That data is gold. If you let it run through your accounts without collecting, categorizing, and analyzing it, you’re missing out on a huge opportunity to improve your business.
But the problem is, traditional data management tools make this difficult. Many organizations, including some of the world’s largest and most technologically advanced companies, rely heavily on spreadsheets and other manual processes to track their organization’s cash flow and cash position across multiple bank portals.
They then spend considerable amounts of their precious time turning this information into reports and forecasts. These methods simply weren’t designed to deal with the scale that comes with industries like e-commerce, where there can be millions of transactions a day across dozens of different sales channels.
Lack of Oversight
I’m going to let you in on a little secret. Many high-volume companies have no idea how many transactions they process each day, where their cash flow is coming from and where it’s going to. Sure, they understand the big picture, but getting oversight on the detail can be next to impossible. That’s why it’s no surprise to find that a recent treasury survey from Deloitte found that visibility into global operations, cash, and risk exposures continues to be the most challenging and time-consuming areas for treasurers.
For obvious reasons, most companies aren’t too eager to broadcast this fact. And practically speaking, it can be worked around. It’s possible to put in place risk measures that ensure there’s always enough cash to meet obligations, but it does mean that this cash is being used far less efficiently than it could be.
For companies who do leverage this data to better understand their liquidity needs, it offers the potential to increase yields immediately, without increasing risk.
Limited Reporting and Forecasting
Now obviously, without clear organization of all that data, there are going to be limitations when it comes to forecasting and reporting. Often, the answer here is to stick to a high level overview, and use conservative assumptions when creating forecasts.
This approach offers less flexibility when it comes to reporting, which impacts the strategic decision making that can be made based on financial data. From a forecasting standpoint, it means projections that are less detailed, and therefore less reliable.
Search
Need to find a single specific transaction among millions? It’s the textbook definition of needle in a haystack. Without tech to assist, someone is going to have to spend hours and hours trawling through transaction listings to find the relevant datapoint.
The problem becomes even more challenging if you’re not even sure what you’re looking for. For example, perhaps a customer is saying they’ve made payment, but there are 3 or 4 different channels this payment could have come through.
Where Legacy Solutions Come Up Short
In contrast, cloud-native infrastructure offers significant advantages over cloud-based systems, providing better performance, scalability, and flexibility. From a connectivity standpoint, it means being able to connect all of your data sources (including non-bank payment platforms like Stripe and AliPay), and add new accounts instantly.
Modern treasury solutions also increase the amount of data that is gathered from your transaction listing. While a traditional TMS will collect basic transaction data, modern solutions like Trovata also gather huge amounts of additional metadata.
How APIs and Data Lakes Centralize Transaction Data
One of the biggest wastes of resources in treasury and finance operations is dealing with disparate sources of data. Logging into multiple banking portals and software platforms, downloading CSV files, consolidating all this information manually, and then reviewing everything line by line.
APIs simplify all this, allowing for an ‘always on’ connection between your banking portals, and a centralized repository for all of your financial information. At Trovata we call this a Data Lake. In essence, it’s a single source of truth for all of your transaction information and cash balances, removing the need to manually consolidate your data.
How Native Payments Simplifies Transaction Management
The simplification benefits don’t stop at being able to see the information. They also allow you to consolidate all of your payments under a single platform as well. So to originate transactions, there’s no need to login and make separate payments from each individual account.
Modern treasury tech solutions like Trovata give you a single payments platform to originate all of your transactions from, including capability to make bulk payments. Because of the way it uses APIs, you’re also able to process all of these payments without paying any third party processing fees.
This capability is also especially valuable when dealing with subsidiaries across different geographic regions, with different tax laws, and even different currencies. Being able to manage and track all of these cash movements gives Treasurers far greater control.
Bringing it All Together With Trovata
Trovata brings together all of the benefits of cloud-native, API-first treasury technology, to provide complete control and oversight over all of your transactions. Even if those daily transactions run into the millions.
Recommended: To learn more about how Trovata simplifies treasury management for businesses with high transaction volumes, check out our blog post 4 Tools for Treasurers to Master High-Volume Financial Transactions.
As the global standard for treasury connectivity, Trovata can connect via legacy methods like SWIFT, as well as through modern API connections. This data integration provides a comprehensive overview of your current cash position, and full visibility over your entire transaction history.
That’s obviously highly valuable in the moment, but it also allows for far more sophisticated forecasting, scenario planning, and cash management. For example, Treasurers can monitor cash positions in real-time, and make adjustments as necessary. This is especially relevant for companies with large seasonal sales volumes, which can be hard to predict.
This significantly reduces the chances of any liquidity problems, while also helping you to maximize yields by avoiding idle cash stockpiling where it’s not needed.
And when there’s a need to focus on the finer details, Trovata’s automated tagging and Trovata Query Language makes it easy to find specific transactions or identify trends and anomalies.
In short, Trovata has the ability to transform your treasury operations. By connecting all of your financial data sources and automating the collecting and categorization of this data, you free up your time to be spent on high value analysis and strategic decision making.
If you want to learn more about the Trovata platform, download our platform data sheet today.
