Breaking Free From Legacy Treasury Management Systems’ Limitations

Written by Trovata Team
July 20, 2021

Since the mid-1980s, treasurers have utilized treasury management systems to track and forecast their cash position as accurately as possible. While many legacy treasury management systems claim to automate standard treasury processes, manual intervention is often required to gain a cash position at one snapshot in time. While you could continue to utilize a TMS to support your treasury operations, using outdated technology comes with a price.


Why Legacy Treasury Management Systems Hold Treasurers Back


Disparate Data Sources Reduces Accessibility to Accurate Cash Data

When it comes to consolidation and normalizing bank data in one platform, TMS utilizes MT940 file formats downloaded from the bank. These statements then have to be run through your TMS, but the Straight Through Processing Rates can be quite low. You suddenly find yourself spending hours cleansing your bank statements, writing scripts to normalize columns, and converting currencies to get an accurate picture of your cash position. 

Handling your transaction consolidation and normalization manually opens the possibility for errors and delays, potentially leaving you with inaccurate data. 


Hampers Innovation

Discovering new opportunities and insights into your cash flows is extremely difficult within legacy TMS because they often remove control. Creating any custom reporting and forecasting usually requires custom projects, which is a huge and costly lift for IT, or you must export data and manually cleanse it within spreadsheets. 

You perhaps find yourself grandfathered into treasury processes that may not be the most efficient because making any improvements to reporting in your TMS is  thought to be too painful and time-consuming. And since the reporting process for month-end close is painstakingly long, you don’t have time to freely explore your data and discover new cash insights. As a result, the total cost of running outdated treasury management technologies is far more costly than making the change to an automated cash management platform.


Limits Your Treasury’s Growth Potential

The more time you and your team spend scrolling through thousands of transactions, the less time you have to explore and analyze your cash flow and position. It becomes challenging to discover new opportunities to invest, optimize working capital and inventory levels, improve the cash conversion cycle, and uncover new cash insights.

Your treasury management system shouldn’t be a bottleneck to your treasury’s effectiveness. If your system is hampering your innovation, reducing accessibility to accurate cash insights, and limiting your treasury’s growth potential, it’s time to break this ineffective cycle.


Breaking the Cycle 

When you have to implement manual workflows to work around your treasury management systems’ limitations, your existing tech stack is failing you. The truth is that most treasury management systems require significant manual intervention and reconciliation due to their outdated UI and data architecture. If you must manually process millions of transactions, any mistake can lead to inaccurate data, and suffer delays trying to locate the errors and correct them. 

Fortunately, there’s a better way to run your treasury and it has arrived just when it is needed most. Incredible technological advances have occurred within the treasury space in the last few years. It has empowered treasurers who have digitally transformed their operations with an open banking platform, to better automate their cash reporting, analysis, and forecasting by establishing a single source of truth for their data.

Let’s dive into specifically how an open banking platform, like Trovata, can empower you with more time by streamlining your cash management tasks and enable you and your team to focus on strategic initiatives that drive value for your business.


Automate the Consolidation and Normalization of Cash and Transaction Data

Unlike TMS that require bank statements to be manually uploaded, Open banking platforms utilize Direct-To-Bank APIs to establish a financial big-data pipeline. These modern APIs connect directly to your banking partners and send detailed cash and transaction data in real-time, empowering you with up-to-the-day cash position and cash flow data in one secure platform. By streamlining the consolidation and normalization process, you and your team can focus on exploring your data to discover rich, new cash insights. 


Easily Search for Any Transactions with Natural Language Search

Natural language search enables you to find and reference historical data in just a few words. Instead of utilizing a TMS and manually paging through thousands of transactions to find the one you need, you can type in the vendor, the date range, or bank partner as a few examples. There’s no delay. You instantly obtain a list of transactions that meet your specifications. These searches can also be saved as tags to be usable as customizable data sets in any future reporting and forecasting. 


Generate Drag-And-Drop Cash Reports and Forecasts Utilizing Real-Time Data

Through Direct-To-Bank APIs, open banking platforms gather data from multiple banking institutions and bring it together in a ‘data lake.’ This data lake provides the raw data for machine learning algorithms to analyze, empowering real-time cash reporting and forecasting. You can slice and explore your data based on different tags, currencies, institutions, vendors, and more without modifying your raw data. These reports and forecasts can be arranged in any way you want on your customizable dashboard. Gone are the days of manually manipulating data in Excel to create custom reports and forecasts based on inaccurate  data. You are free to explore your cash and transaction data without penalty.


Gain a Zero Performance Penalty Environment for Exploring, Organizing, and Personalizing Your Data

What truly sets open banking platforms apart from legacy TMS is their modern data architecture and user interface. In-depth searches, save tags for future reporting. Complex reports and forecasts can be generated automatically within milliseconds. There’s no delay in gaining access to the critical data when you need it. Compare that to legacy TMS where developing a standard forecast or a view could take hours to process and compile. Your cash management platform should encourage you to explore your data and personalize your reporting, not hinder you. If your current legacy TMS requires you to perform arduous manual labor, your TMS is holding you back from gaining instant and accurate cash visibility.


Break the Cycle with Trovata, Our Automated Cash Management Platform

The truth is that companies that can analyze, report on, and forecast faster and more accurately than competitors can better take advantage of growth opportunities, enjoy lower capital costs, and cope better with downturns than their competition. If your legacy TMS is holding you back in gaining the real-time cash insights you need to make better business decisions, it’s time to consider breaking free from your legacy TMS’s limitations. 

Trovata, our automated cash management platform, makes it easier than ever to monitor, analyze and automate your cash reporting, analysis, and forecasting. Begin to eliminate arduous and tedious manual processes required to maintain your TMS, streamline your cash reporting and forecasting, and discover deeper insights into your cash flows by signing up for a Trovata demo today.

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