Technology is integral to treasury functions, including accounts payable and receivable. Even if your treasury has already streamlined processes, you may be able to further automate tasks to free up time for more strategic thinking.
To keep organizations running smoothly, treasury departments should look closely at their technology systems and where they can improve. Once you know where your technology infrastructure stands, you can make a case for change.
A successful transformation will involve making the most of current technology resources and, when necessary, consolidating or replacing resources. Determine the software and systems that best support your processes. For example:
First, consult all the departments—accounts payable, accounts receivable, accounting, IT and any others—that will be impacted. Collaboration with those groups can help clearly define your proposed solutions and determine performance metrics. Be sure to tie the performance metrics to specific benefits for each team to help you gain their buy-in.
Then, you can approach leadership. Frame the investment as part of the organization’s long-term, strategic goals. Clearly detail:
When seeking organizational buy-in, it’s important to detail what you’re hoping to accomplish with the new technology. Is it designed to save on costs, increase revenue or decrease tech debt?
Benchmarking can be especially helpful here.
In an American Productivity & Quality Center (APQC) survey, for example, almost half of the respondents leverage OCR, and more than half leverage invoice matching systems for their accounts payable processes. Accounts receivable processes are also commonly automated—just 8% of respondents still use manual spreadsheets.
You want to show leadership not only why it needs to invest in technology, but why it needs to invest now. While the drivers will vary depending on your organization, the new systems could help the business:
Look at the costs and benefits of your new treasury systems. Make sure to factor in your organization’s current investments. You may also want to prepare two budget estimates that represent the best- and worst-case scenarios. If your business case still succeeds under the worst-case scenario, it will be a strong case.
Now, you need to detail the costs, including hardware, software, support, maintenance, staff, upgrades and operating expenses. Start with the total cost of the contract, which is composed of five key calculations:
Factors that may increase your ROI
Assessing the benefits of your new treasury systems is often less straightforward, since some gains may be productivity based. Although these benefits are indirect, they can impact headcount. For example, new software may reduce the number of employees needed for a task or increase employees’ output, eliminating the need for new hires.
To fairly account for productivity gains, you should correct for inefficient transfer of time. The total time saved rarely equals the total additional work performed. Follow three rules to measure inefficient transfer of time:
To improve your calculations, you can also:
The J.P. Morgan Corporate Treasury Consulting team can help you and your company evaluate its current treasury software and systems and find technology that best fits your needs.
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