Not long ago, multi-tabbed Excel spreadsheets carried exhaustive data sets and were used as the primary tool to show the internal cash availability and liquidity standing of corporations, regardless of their size. Cash flow projections, debt service payment schedules, guarantee inventories, financial risk impacts – just to mention a few – were the key arguments in discussions involving Treasury, be it with internal or external stakeholders. That changed over time as accounting and tax considerations placed Treasury in the spotlight in terms of data availability; financial services crisis allocated responsibility for considerate counterparty management; and post crisis reality put public funding on an equal foot with traditional bilateral banking facilities. A tailored TMS brought flexibility in translating the raw data of balances, variances, and seasonality to finally allow an internal shift in the balance of power, so that Treasury became an equal, if not a privileged partner, in business and finance driven discussions.

Does this mean that the daily use of a sophisticated IT tool is the way for Treasury to maintain this new position?

It seems that, even though a TMS implementation is perceived as the ultimate solution to streamlining daily Treasury management processes, it is often a means to an end.

It’s important to recognize, that there are more advantages to a TMS than providing a simple stream of numbers for corporate Treasurers:
- Treasurers are expected to be information providers, not data providers: as much as one might say that numbers speak loudest, analyzed and structured numbers bring more value and insight. Leading Treasuries are expected to be as much information dealers as idea lobbyists to their CFOs and CEOs;
- Access to information places Treasurers in the privileged position of having both control of the information and the empowerment to act on it. The comprehensive view on time horizons, counterparty standing or working capital conditions provides Treasurers with the unique “big picture”, whereby they can and should influence key stakeholder discussions, such as those with banking partners, suppliers and other business partners;
- A considerable amount of know-how can be derived from a modern TMS. The broader the range of Treasury’s responsibilities, the more potential an IT solution brings a Treasurer looking for an appropriate risk angle, reporting capacities, efficiency testing scenarios. As such, a tailored TMS can and should become an insight and reporting tool for treasury and broader finance functions.

Ideally, building Treasury competencies on top of the solid analytical ground laid by a tailored TMS should contribute to building an organization that mines efficiency and the ability to make predictions from information, as much as it sets a benchmark practice.

Fortunately, an increasing number of system vendors already offer standardized and comprehensive system solutions such as plug-in SaaS-versions that enable small and mid-cap treasuries to participate in these advantages with relatively small effort and investment if selected with the right perspective and know-how.

By Marcus Hofstätter - Senior Manager, Financial Management
kpmg.com

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