As your company expands its global reach, its liquidity structures become more complex and its banking providers increase. In response, your treasury and finance teams may consider a treasury management system (TMS) to automate cash management operations and elevate treasury’s strategic footprint. But is a TMS the right tool for your company?
Many treasury and finance organizations assume a TMS can solve all their operational cash management issues and eliminate the need for manual processes. In reality, a TMS provides distinct functions and adds value in specific circumstances.
A TMS can be a useful way to organize your treasury to become more strategically relevant, but for many organizations, it’s not the only path. A critical step in identifying whether a TMS is right for you is understanding the root causes of your treasury’s pain points. Only then can you determine if a TMS will be worth your investment.
If you determine a TMS is your best option, it’s worth noting that the treasury technology landscape is ever evolving. There are many niche alternatives that can alleviate the cost burden and long implementation timelines associated with a traditional TMS.
Some of the key functionalities of a full-suite TMS include:
Implementing a TMS is a massive undertaking—it can take up to three months to get one entity or module up and running. Achieving full functionality with a TMS can take anywhere from 12 to 18 months. Your technology team should be engaged early in the selection process for successful design specifications, implementation and rollout.
The TMS technology best suited for your treasury organization is based on many factors, including:
While a TMS can provide robust functionality, there is no substitute for best-in-class employees, processes and existing systems. Although it’s not an exhaustive list, there are three key components of the organization to analyze for outside issues that a TMS won’t solve.
A TMS can be a useful way to organize your treasury to become more strategically relevant, but for many organizations, it’s not the only path. To avoid investing time and money into a TMS that isn’t used to its full potential, you must first analyze your people, processes and technology infrastructure for fixable issues. Leverage trusted relationships, such as those with peer companies, consultants or banking providers to understand your full range of options before you make a final decision.