Treasurer’s 4 Step Plan for Digital Transformation

Written by Trovata Team
March 17, 2021

Today’s Treasurers are frustrated. Frustrated because the technologies that have transformed their lives as consumers have been too slow to arrive in business functions. At home, we’re used to instant access to ‘always on’ services, to having our questions answered as soon as we ask them. Companies like Google and Amazon can serve up an incredible array of answers and products to a simple question or even a single word input. Why can’t it be the same for a Treasury employee who has a question about “how much cash is on hand right now?”

Some may argue that fintechs and the rapid pace of new technologies like artificial intelligence, data lakes, and automation are currently helping businesses. But, this isn’t necessarily a reality for Treasurers – take for instance recent comments from Tim Murphy, Square’s Treasurer: 

“Cash forecasting is always something folks promise in these [Treasury Management] systems, but the way they go about it is always the same and never works. The answer is this ‘is my information consolidation system and I’m going to cough it up into a spreadsheet and then find the lowest-paid guy to look at it,” said Murphy. “Artificial intelligence and machine learning – these are terms that just don’t exist in the treasurer’s workbook.” 

The Reality of the Current Treasury Landscape

Typically, finding the answers to questions above like “how much cash do I have” takes a significant investment of time and man/woman power to uncover. Maybe that’s because a third of Treasurers still primarily use Excel spreadsheets to manage Treasury functions (Global Treasurer). Maybe it’s because it takes Treasury teams more than ten clicks to run a report on transaction history or to find balances in current financial platform offerings (personal experience).

As a result of antiquated systems and valuable lost time, Treasurers are now looking at investing in and finding better ways to access and analyze their financial data through digital transformation. In a report that surveyed Treasurers from the world’s top enterprises, 88% of treasurers said that time savings and efficiency gains are a primary reason for wanting to digitize.

Treasurer Data

Source: Building Tomorrow’s Treasury

There are a number of reasons for digital transformation, but where do Treasurers start? What’s the first step that’s needed to achieve the promises of data-driven technology? How can they use things like AI/ML that appear to be helping businesses in other divisions but not operational in the Treasury function? 

It’s always tempting to rush in and look for a Treasury solution that might fit your company’s needs. But before hitting ‘search,’ think carefully about what you want your treasury digitization project to achieve. 

Treasurer’s Digital Transformation in 4 Steps

Here’s four steps Treasurers can follow as they begin their planning process for digital transformation.

1. Set Clear Objectives

When investigating potential Treasury Solutions Platforms, create a list of answers to the following questions to help tailor your search:

  • What processes are broken right now?
  • Are there any processes that I can automate?
  • What do I want to be able to do in the future that I can’t do today?
  • Is the solution compliant and secure with my data?
  • How does it report my cash flow and liquidity?
  • What are the data streams like? Is it real-time or lagging?

2. Build a Business Case

‘It will make my life easier’ might be a compelling reason to invest in a treasury technology solution for you, but unfortunately, your board needs a better reason when it comes to freeing up the corporate purse strings. 

As with most business decisions, this one comes down to return on investment (ROI). Will the money you’re proposing to spend deliver a return for stakeholders in terms of more accurate forecasts, time saved, or even reduced headcount?

3. Gain Internal Sponsorship

With a business case worked out, it’s time to make sure you have the high-level support you’re going to need. It may be that, as treasurer, you’re perfectly capable of signing off the expenditure but, if your project hits a bump in the road, it’ll certainly help to have a c-level voice in the background, opening doors and pushing things forward.

4. Secure the Budget

Unsurprisingly, ‘lack of budget’ is cited by 38% of treasurers as a primary reason for not pressing ahead with a digitization project. Yet costs are falling as the older vendors and pricing models are challenged by startups with software as a Service (SaaS) plans and flexible pricing. You may not need as much as you feared.

What’s next?

It’s no surprise that Treasurers, CFOs, and other financial professionals are inundated with time-consuming processes that require manual effort. They could use a little digital transformation to help. From Emerald’s Accounting team: “It would typically take me an hour every day just to put together our standard daily cash report for our CFO,” said Faheem Sorathia, Senior Accountant. “Drilldowns for detail were impossible, so any follow-up questions he might have would mean another round of manual analysis. Any off-cycle reporting would then be additional hours of pouring over Excel workbooks.”

If modernizing financial reporting, cash management, or cash flow analysis is a priority, check out the rest of the 10 digital transformation steps in the guide “Building Tomorrow’s Treasury”.

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