How Treasurers can Adapt to Changing Responsibilities 

Written by Stella Newton
April 5, 2024

The landscape of corporate finance has undergone a seismic shift in recent years. The pandemic threw a curveball at businesses around the globe, forcing them to adapt to a new reality of economic uncertainty and disrupted supply chains. Amidst this turbulent environment, the role of the corporate treasurer was thrust into the spotlight. Treasury operations transformed as the importance of strategic liquidity management became a priority. 

Traditionally viewed as the guardians of company cash flow and risk management, the role of treasurers today are taking on a much more strategic and collaborative role. They are no longer solely focused on cost minimization; they are now vital partners at the C-suite table, providing critical insights on financial health, liquidity, and navigating the ever-evolving economic landscape. In fact, a recent survey from Deloitte found that 91% of practitioners describe being a value-add partner to the CFO as a critical responsibility going forward.

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The Pandemic’s Impact: A Catalyst for Change

The pandemic exposed vulnerabilities in traditional corporate treasury practices and highlighted the importance of liquidity. Disrupted revenue streams and volatile markets demanded a more proactive and adaptable approach to liquidity management. Treasurers had to become adept at scenario planning, stress testing cash flow projections, and securing emergency funding to weather the storm.

This baptism by fire forced treasuries to embrace technology and automation at an accelerated pace. Treasurers needed solutions that could streamline daily tasks, enhance visibility into real-time financial data, and facilitate secure communication with banking partners – all while ensuring accuracy.

Beyond Cost Management: The Role of Treasurers in Modern Business

While cost control remains a core responsibility, today’s successful treasurers are more than just bean counters. They are strategic partners actively involved in business decisions with a broader impact. This expanded role encompasses a range of new considerations:

  • Liquidity Optimization: Treasurers are now tasked with maximizing returns on surplus cash while ensuring sufficient reserves to weather unexpected market shifts. This requires a sophisticated understanding of investment options and the ability to leverage technology to optimize cash flow forecasting. 
  • Risk Management Redefined: The globalized business environment and ongoing geopolitical tensions necessitate a comprehensive approach to risk management. Treasurers play a crucial role in identifying and mitigating financial risks, including currency fluctuations, supply chain disruptions, and cyber threats. This might involve implementing foreign exchange hedging strategies or collaborating with procurement teams to build supply chain resilience.
  • Data-Driven Decision Making: In today’s data-rich environment, treasurers must be adept at leveraging data analytics to gain valuable insights into financial performance. This empowers them to make data-driven decisions regarding cash flow, investments, and risk mitigation strategies. Modern treasury technology can provide real-time dashboards and reporting tools that translate complex financial data into actionable insights.

Building the Bridge: The Skills Gap and Modern Treasury Technology

The rapid pace of digital transformation has presented a unique challenge for many corporate treasurers. While recognizing the need for automation and technological solutions, many lack the specialized digital skills to implement and manage complex systems.  Terms like APIs (Application Programming Interfaces), AI (Artificial Intelligence), and machine learning can seem daunting.

This highlights the critical need for user-friendly, easily-implementable modern treasury technology. 

Here are some key factors for treasurers navigating the tech landscape:

Focus on Integration: Modern treasury solutions should integrate seamlessly with existing enterprise resource planning (ERP) systems and other fintech tools used within the organization. This eliminates the need for manual data entry and streamlines workflows. Integration with payment platforms can further enhance efficiency and reduce errors.

Cloud-Native Solutions: Cloud technology offers a plethora of benefits for corporate treasurers. Cloud-native solutions are easily accessible from anywhere, facilitate remote collaboration, and provide automatic data updates, ensuring everyone has access to the latest information. Cloud-native platforms also benefit from economies of scale, offering access to advanced features and functionality at a lower cost compared to on-premise solutions.

Intuitive Interface: The best treasury management solutions are designed with ease of use in mind. They should have a user-friendly interface that allows treasurers, regardless of their prior technical expertise, to navigate the platform easily and extract valuable insights from the data. Ideally, the system should offer role-based access control and customizable dashboards to cater to the specific needs of different users within the treasury department.

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API-first Tech for Enhanced Bank Connectivity: Treasury teams need real-time financial data but traditional methods like Host 2 Host and bank portals are slow. APIs act as messengers between systems, enabling real-time data exchange which means no more manual data consolidation. This improves speed and efficiency for treasurers by automating processes, providing instant data and insights, and offering real-time visibility into payments and balances for better cash management. Additionally, APIs connect the digital ecosystem with a key advantage being the ability to integrate real-time balances and transactional data across multiple channels, including modern treasury tech and ERP.

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The Power of Automation: Saving Time and Driving Impact

By embracing modern treasury technology, treasurers can unlock significant benefits for themselves and their organizations. Automation can free them from tedious manual tasks like data entry and reconciliation, saving hours of their week. This allows them to focus on more strategic initiatives, such as:

Scenario Planning: Advanced forecasting tools can help treasurers develop robust financial models to navigate potential economic headwinds. These models can incorporate various factors like currency fluctuations, interest rate changes and commodity prices to assess the potential impact on the business. This allows for proactive adjustments to financial strategies and contingency plans in the face of uncertainty.

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Risk Mitigation Strategies: Technology can streamline data analysis, enabling treasurers to identify and proactively mitigate financial risks. For example, AI-powered solutions can analyze vast amounts of transaction data to detect potential fraudulent activity. Additionally, machine learning algorithms can be used to predict foreign exchange movements with greater accuracy, allowing treasurers to implement more effective hedging strategies.

Collaboration with Stakeholders: Improved data accessibility and transparency fostered by modern treasury technology promotes better communication and collaboration between the treasury department and other key stakeholders within the organization. Real-time dashboards and reporting tools powered by machine learning can provide department heads and executives with a clear understanding of the company’s financial health, enabling them to make data-driven decisions aligned with overall business strategy.

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The impact goes beyond efficiency gains. By leveraging automation and data-driven insights, treasurers can significantly enhance their strategic decision-making capabilities, contributing directly to the overall success of the organization. This can involve:

  • Optimizing Capital Allocation: Treasurers can leverage data analytics to identify investment opportunities that align with the company’s risk tolerance and growth objectives. Modern treasury technology can also facilitate streamlined communication with investors and improve the overall capital allocation process.
  • Expanding Payment Options:  Treasurers can explore innovative payment solutions such as API payments which enable real-time payments. This allows treasurers to hold cash longer to generate more yield.
  • Reducing spend: By fostering transparency and providing real-time financial data to all departments, modern treasury technology can help cultivate a culture of financial responsibility throughout the organization. This empowers employees to make informed decisions regarding spending and resource allocation, ultimately contributing to the company’s bottom line.

Adapting with Tech That’s Easy to Implement and Use

Right now we’re seeing the technical capabilities of finance software platforms finally catching up with the dream that they’ve had since the early days of the internet. The ability to access every single piece of a company’s financial data at the click of a button, but to also be able to manipulate and share that data in almost infinite ways.

As a cloud native platform, Trovata allows teams to collaborate from a single source of truth, removing the challenges of manual workflows and data aggregation. Not only that, but because we connect directly to the source of your banking data through the use of highly secure open banking APIs, that is always available in real time, consolidated from all of your banking portals automatically, and always 100% accurate.

From there, we provide a sophisticated suite of tools to conduct complex forecasting and scenario planning, with a UX that makes it easy to iterate on the fly as the landscape changes. This allows you to leverage cutting-edge technology without needing tech expertise. 

The best part? Trovata can be implemented in weeks rather than months, with no IT support required! 

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Experience firsthand how Trovata is transforming treasury operations through APIs, AI, and revolutionary bank connectivity. Book a demo today!

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