Is Automation Necessary for Treasury Management?

Written by Keegan Chamberlin
July 12, 2022

Treasurers have relied on spreadsheets for treasury management for decades. And for a long time this method has worked, despite some setbacks. However, more choices are now available, resulting in new ways to automate tasks. So, why switch when you’re used to managing cash in spreadsheets?

It’s easy to stick with the tried and true cash management method, but that doesn’t mean it is the most efficient. According to Equidam, a venture capitalist company, the average company forecasts 178% in revenue growth within their first year, 100% for their second, and 71% for their third. With that growth comes more transactions and data for treasury teams to analyze. 

Rapid growth leaves teams with a choice: do you increase the size of your team to handle the increased data load or use new technologies? To answer that, we will address if treasury management automation is necessary.

GoTo Case Study treasury management


The Challenge of Utilizing Spreadsheets for Treasury Management

Many challenges arise when utilizing spreadsheets for treasury management:

  • Manually consolidating bank data is time-consuming. A treasurer operating on spreadsheets may have to log into many bank portals to download all of their statements. Then, they need to consolidate and normalize all the transaction data into a spreadsheet.This can take hours, resulting in less time for strategic cash analysis.

  • Manual data entry invites the potential for human error. One human error can lead to your cash position not reconciling with what’s in your bank accounts. This potential for error can lead to mistakes that need to be fixed. Again, this reduces the time available for analysis.

  • Siloed spreadsheets limit transaction and cash visibility. Version control on a large team is complicated and often, is not achieved. It is hard to determine who has the most up-to-date data with many working simultaneously.

  • Spreadsheets lack sophistication when it comes to performing daily cash analysis. Spreadsheets cannot process and analyze large datasets due to computer memory limitations.

These challenges can lead to your team not having confidence in your cash forecast. And what if your cash position and forecast are inaccurate? You may not realize you have a cash shortage before it’s too late, resulting in an overreliance on prime-day loans. Borrowing is more expensive since the Federal Reserve has increased interest rates. Therefore, it is critical to predict the required liquidity to get the best deals from banking partners.


Is Automation Necessary For Treasury Management?

Considering the weaknesses of spreadsheets, is automation necessary for treasury management? We certainly think so. Exposure begins to rise if you don’t automate the bank data aggregation. You risk significant financial losses if you are making decisions based on outdated cash flow data. Instead of being reactive in a crisis, it’s better to be proactive. In advance, ensure you have the tools necessary to forecast cash.


What Does Automation Look Like Within Treasury Management? 

There are varying levels of automation within treasury management. For example, you could automate the consolidation and normalization of bank data. This ensures there’s no chance of insufficient data entering your cash management processes. But you could also utilize new technologies, such as machine learning algorithms. These algorithms better categorize your transactions to generate automated cash reports and forecasts. At the very least, we recommend you automate bank data aggregation. This way, your team can be confident that the bank data flowing into your system is accurate.


The Positive Outcomes of Automating Your Treasury Management Processes

By automating bank data aggregation, you can equip your treasury with better cash flow insights regardless of size. While there are many benefits, here’s a sample of the outcomes that can come out of automating treasury management processes:


Gain Complete Cash Flow Visibility

Gone are the days of worrying you have the most recent cash forecast via spreadsheets. API-first, cash management platforms open up a level of automation never before seen. These bank APIs connect directly to your banking portals and automate bank data aggregation. Your organization can gain cash flow visibility by creating one source for balances and transactions.  All key decision-makers can have the same access to insights. This visibility increases transparency throughout your entire organization.


Increase Confidence Within Your Cash Flow Forecast

You can create a strong foundation for cash flow forecasting with accurate bank data. Banking APIs collect your normalized bank data in perpetuity. This ensures that reports and forecasts are generated from accurate, up-to-date bank data. Also, you can use machine learning (ML) algorithms to analyze your data. This, in turn, strengthens the accuracy of your cash forecasts over time. With this technology, you can ensure your cash flow forecasts are reliable. 


Discover Richer Insights Through New Technologies and Tools

ML algorithms open up new possibilities for treasury management. This technology is having a significant impact on cash flow forecasting accuracy. It finds patterns in bank data humans can’t manually. ML algorithms make tagging recommendations, which can be utilized for further forecasting and analysis. These relationships can help you find new opportunities for optimization and growth.


How to Take Advantage of Treasury Management Automation

Ready to explore how you can automate your treasury management processes? Trovata makes it easier to take advantage of automation technology. Trovata’s cash management platform uses banking APIs to aggregate bank data across all your key accounts. This empowers treasurers to cut repetitive data management processes.

You can transform your treasury into a cash advisory through automation. Empower senior management to better plan for one-off events, and optimize investment decisions. Don’t just take our word for it. Learn how GoTo, the SaaS software company, uses Trovata to increase the efficiency of their cash management processes.

By automating their cash management with Trovata, GoTo:

  • Achieved cash visibility across 50+ global bank accounts
  • Saves 7+ hours a week
  • Gained access to quality support that answers questions in minutes


Want to achieve results like GoTo’s? Download the case study to learn how to focus on analysis instead of data management.

treasury management case study

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