How to Automate Treasury Asset Management

Written by Trovata Team
July 22, 2021

In an increasingly complex and dynamic business environment, it has become critical for treasurers to become internal consultants in order to help their organizations overcome cash flow challenges and respond to potential market changes. Finding the right response can mean the difference between a solvent and vibrant company or an organization with liquidity and credit issues.

Successful organizations are increasingly turning to automated cash management solutions to manage their treasury assets. These solutions can help you to replace inefficient and error-prone treasury processes while providing you with invaluable insights and increasing your bottom line.

What is Treasury Asset Management?

As time passes and markets change, one thing has remained constant for treasurers: knowing today’s cash position – and forecasting tomorrow’s as accurately as possible is still the core requirement for every treasurer. To do this successfully, you must factor treasury asset management into your overall strategy.

Treasury asset management is a discipline that involves the creation, implementation, and maintenance of treasury procedures to help organizations better manage their cash flows. This can also be described as the need to remain solvent or maintain liquidity.

Risk management is another important component of treasury asset management. Potential risks your treasury management strategy should consider include:

  • Liquidity: This is the risk that an organization may become insolvent.

  • Credit: When a customer or borrower defaults on an obligation that causes the organization to incur a loss.

  • Market: Fluctuations in the market that can cause losses.

  • Operational: This includes losses through fraud or errors.

In addition to cash and risk management, treasury management is responsible for ensuring the optimal use of treasury assets, such as receivables and foreign exchange rates.

Common Treasury Asset Management Processes

In many ways, treasury management is the most crucial component of a successful business. We already mentioned the key role that the treasury plays in helping your business to meet its financial obligations. This includes managing accounts receivable and payable, liquidity and debt management, and cash reporting. You, as a treasurer,  also serve as a portfolio manager by discovering investment opportunities to generate a return with your organization’s cash. This is accomplished through trading and hedging.

Your treasury management strategy should have policies for analyzing and limiting the risk and duration of any investment. For example, investing in real estate may generate a positive return but since the asset cannot be quickly converted to cash, it could be a poor investment depending on your organization’s company strategy.

Treasury management also encompasses asset liability management (ALM). This is important because it determines your company’s leverage to borrow or lend money. Some ALM tasks include looking for the lowest borrowing costs, obtaining higher asset yields, and optimizing debt.

It is important to distinguish treasury asset management from asset management. Asset management involves investing assets to generate a long-term return. Treasury asset management is responsible for optimizing your organization’s liquidity and minimizing any potential risks your organization could incur.

Streamlining Your Treasury Asset Management with an Automated Cash Management Platform

Utilizing an automated cash management solution with modern data architecture solution can help boost your business’s productivity and save your organization money. It does this by automating treasury functions that typically have been performed manually.

An automated cash management solution that performs treasury asset management offers organizations a broad range of benefits:

1. Improve the Efficiency of Your Treasury Management Strategy

By implementing an automated cash management platform, organizations are empowered to streamline their treasury processes and reduce the amount of time spent on manual tasks. This includes automating treasury processes such as cash management, asset and debt management, hedges, and cash positioning. Automation also supports the growth and scalability of your business, so no matter your organization’s size, you can ensure you have the tools to accurately forecast your cash position and cash flow. 

2. Reduce Costly Errors by Eliminating Disparate Spreadsheets

Implementing an automated cash management platform also helps reduce costly errors by eliminating the use of disparate spreadsheets.

In one McKinsey study, Tim Hesler notes that they “continue to encounter [treasury] management systems that include as many as 50 or 100 distinct spreadsheets, often reflecting different systems used by businesses in different geographies.”

When you are managing your cash position in dozens of spreadsheets, it’s not only an incredibly slow process that could bring the possibility for delays, but the potential for human error also increases. By the time you consolidate and normalize your data manually, you are making predictions based off of old data.

Through the use of Direct-To-Bank APIs, cash management platforms empower you with a real-time view of your cash position and cash flow.

3. Discover Valuable, Real-Time Cash Insights with Automated Reporting and Forecasting

The fact of the matter is that companies that can analyze, report on, and forecast faster and more accurately than their rivals can better take advantage of growth opportunities, enjoy lower costs of capital, and cope better with downturns than their competition.

Gone are the days of manually building your cash reports and forecasts in spreadsheets. With an automated cash management platform, like Trovata, you can easily track and predict your real-time cash position and cash flow through a comprehensive suite of automated cash reporting and analysis functionality.

In just a search and a few clicks, you can generate customized reports to track the cash flows of any vendor, institution, custom tag, and more.

Automate Your Treasury Asset Management with Trovata

More organizations are increasingly turning to innovative digital technologies to meet dynamic business challenges. An automated cash management platform can help you automate your treasury functions, including treasury asset management.

Not only will this improve operational efficiency and your bottom line, but it will provide you with valuable cash insights. These real-time cash insights empower you to make more informed decisions.

Trovata empowers you with real-time cash insights by automating your cash reporting, analysis, and forecasting. With direct APIs with most major banks, you can get set up in just a few hours with no IT lift required.

Sign up for free today to see how Trovata can help you to transform your treasury and financial operations!

get started with trovata

Subscribe to Newsletter