Like other aspects and facets of modern business, cash management too has been transformed by the Information Technology revolution. An integral part of the functioning of every organization irrespective of its size or scale of operations, better cheaper, and more accurate cash management can have a huge impact on a firm’s operations.
New technologies and solutions have made it possible for firms to adopt more accurate and reliable cash management strategies. Read ahead for an overview of five important trends that are transforming the world of cash and treasury management.
Enterprise-Level Connectivity
Today, organizations are seeking centralized cash-management modules that are integrated with enterprise-level connectivity and with banking applications for implementation of cash management techniques with the click of a button. Firms seek the freedom to take centralized as well as branch-level or department-level decisions depending on treasury needs of the organization.
This connectivity and convenience must be matched with complete security that will make sure the information about the firm’s cash polices and transactions remain private and secure at all times.
Service-Oriented Architecture and Customized Solutions
Firms are seeking the option of integrating specific cash management services into their internal systems as opposed to asking their customers to use the website designed and setup by the bank. Instead of a complete package, firms are seeking service-oriented architecture where specific functions and activities related to cash management solutions can be utilized in an independent and customizable manner.
Firms are seeking customized solutions depending on the unique cash management challenges that they face. A firm stands to gain more through improved receivables management may choose to ignore the option of deploying excess cash into short-term investrment.
For such a firm, a comprehensive module that includes money market investment analysis may not have a lot of utility. Unlike the past, there is a demand for tailor-made solutions that cater to the unique treasury management requirements of the firm.
Improved Analytics
Bland transaction reports that merely provide data without any analytical assistance are no longer adequate for firms facing numerous treasury management problems. Firms require advanced forecasting tools that, along with the day’s transactions, consider future receivables, integration of historical data, and options to deploy excess cash or meet anticipated deficits.
Customers seem IT solutions that go beyond mere reporting and facilitate informed decision making with regard to the firm’s cash flow needs and challenges.
Localized Services at a Global Level
With ecommerce and social media facilitating entry of even small firms into the global market, there is growing demand for a cash management service that can provide customized local-centric solutions at a global level. This involves analysis of the short-term credit and investment options to determine the best way to deploy and manage cash within the various global branches or profit centers of an organization.
Higher Automation at Lower Costs
With cloud storage solutions and SaaS modules becoming more popular, even small firms are open to paying premium pricing for a cash management system (CMS) solution that brings a high degree of automation in the firm’s operations.
The process of collating and analyzing numerous data points, including current and historical factors, is slowly being moved into automated processes. Scope for manual work is restricted to considering the analysis provided by the system, and taking a judgment call amongst the numerous options open to the firm’s CFO.
Conclusion
Cash management plays a very important role in the sustainable growth of a firm irrespective of its size. Integrating treasury management into the IT infrastructure can help firms capitalize on opportunities and overcome challenges to enjoy better financial credibility in the market.
[Source:cnafinance.com]Sourse: Thefinancebucks.com
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