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Investing in Treasury Management Solutions: The CFO Playbook to Convince Your CEO to Buy In

November 27, 2023 | Article | 5 min | Business Insights

To thrive in 2023 and beyond, many executives have realized the importance of pivoting toward technological innovation. Treasury management solutions are one of many ways your company can grow by tracking its operational finances and commercial commitments more efficiently.

Automated software helps companies track real-time data for liquidity, cash and debt management, cash-flow forecasting, and payment reconciliation. Treasury management solutions also streamline your accounts payable, avoiding costly late fees and interest charges.

Some business leaders think they’re saving money by leaning on manual processes — “tech is too expensive,” “it’s always changing,” or “the old way is better.” But if they don’t consider investing in a tech-first age, their competitors may outpace them.

According to The Digital Journal, treasury management software's total market size was already $3.9 billion in 2021. Experts predict the market will balloon at a compound annual growth rate (CAGR) of 5.23% through the forecast period, eclipsing $5.3 billion by 2027.

Treasury management is one of many tech solutions that can help carry your company into the digital age. If your CEO keeps the company checkbook close to their chest, this guide might convince them to invest in treasury management solutions.

Outline the ROI of Your Treasury Management Solutions

Stakeholders want clear and simplified examples of how a business decision will affect their bottom line. Unfortunately, assigning monetary value to the benefits of investing in treasury management solutions isn’t easy.

Executive team discussing treasury management solutions

Many of those benefits are intangible—they don’t come with a fixed price tag. It’s often more of a general improvement that can save the company money in other ways.

Treasurers should be used to these roadblocks by now. They know referencing figures like time-saved, productivity, and efficiency don’t fly in the boardroom. Executives tend to think in dollars and cents.

So, when making a case for treasury management solutions, consider focusing on what these systems will allow instead.

Improved Cash Management

Consider highlighting how treasury management software can improve cash management and visibility. Board members know how important visibility is regarding bold decision-making. Also, explain how treasury management software can enable timely forecasting to determine the company’s ability to make borrowing decisions, pay down debt, leverage under-hedged cash programs, and pocket growth on investments.

Scalability

Board members also like scalability. Software that grows with the company means fewer necessary hires. Any treasury management software worth your money will scale as the company expands, so your treasury department isn’t saddled with more work.

Fewer Bank Fees

Bank fees can add up and eat away at the company’s bottom line. They won’t make or break the quarter, but there are plenty of more effective ways to spend that money. Consider highlighting how treasury management solutions can significantly reduce (if not eliminate) bank fees.

Reduced Bank Portal Fees

Bank portals typically charge based on user registration numbers. Treasury management software may drastically reduce the number of users necessary to manage the company’s bank accounts. Additionally, many financial institutions charge for holding reports and payment templates beyond 90 days. But top-notch treasury management software will store data indefinitely.

Enhanced Cybersecurity

Cybercrime and fraud can cripple even the strongest organizations. However, investing in treasury management software can help combat these malicious actors. The company can gain enhanced control over its finances, which shields them from fraud and costly errors. Look for solutions that provide:

  • IP address filtering
  • Multi-factor authentication
  • Payment watch list screening
  • A clear separation of duties

Determine the Treasury Management Tech Investments You Need

Treasury management software  involves automated digital solutions to strengthen your treasury operations. This includes your investments, cash flow, accounts payable, and accounts receivable.

CFO crunching numbers on a calculator

When firms invest in treasury management software, they usually do so to bolster their financial security while minimizing reputational risk due to dips in market share or loss of capital.

Before we dive into the capabilities of treasury management software, let’s unpack the most common responsibilities tasked to your treasury department and the challenges that come with them. Your CEO will likely want a clear picture of what’s hurting their cash flow and how treasury management solutions can eradicate those problems.

Risk Management

A treasurer is responsible for developing a comprehensive assessment of business risk exposures. Their biggest challenges are likely:

  • Foreign exchange (FX) management
  • Liquidity
  • Fraud
  • Tax Compliance

Cash Flow Management and Forecasting

A treasurer is in charge of building an efficient banking structure that optimizes cash resources while making it easy to access short-term financing. They’ll often run into roadblocks regarding:

  • Time-consuming manual processes
  • System redundancy and bank volume
  • Regulatory charges
  • Too many transactions and currency settlements

They’re also in charge of maintaining well-structured and accurate methods of forecasting future cash flow. Potential challenges include:

  • Outdated manual processes
  • Time-consuming collaboration between teams
  • Difficulty creating timely reports
  • Little-to-no variance calculation between actuals and forecasts

Regulatory Management

Laws and regulations change regularly, so treasurers must keep up with new federal, state, and local legislation to ensure their company is compliant. However, tracking these changes can be difficult. Challenges often include:

  • Manual documentation that leads to an uptick in human error
  • Poor workflow and process management
  • Lack of communication between all levels of an organization
  • Ensuring compliance with the latest industry standards

CFO presenting business numbers

How Treasury Management Solutions Can Benefit Your Company

Business leaders should consider giving their treasurers the latest software to ensure pinpoint accuracy. Let’s highlight what investing in treasury management software can do for your company:

  • Provide Insight into Cash Management and Forecasting: Treasury management software can organize the company’s cash position each morning, providing insight into bank balances and cash-flow predictions while monitoring transactions in real time. Such insights can provide an up-to-date picture of the company’s cash position, allowing for more accurate forecasts.
  • Optimize Cash Accounting Process: With treasury management solutions, treasurers won’t have to post to the general ledger (GL) manually. Instead, treasury management software can automate the entire process.
  • Streamline Bank Relationships: Treasury management software leverages integrated platforms to receive data from banks in real time. This can give you more control over your bank accounts and clearer insight into associate fees.
  • Reconcile Financial Transactions: The most crucial component of efficient treasury management is clearly depicting business transactions. Treasury management software uses artificial intelligence (AI) to reconcile transactions between banks and businesses. The AI can also identify discrepancies within your reports to catch mistakes before they become costly.

Underscore What Leadership Needs to Understand for Buy-in

Many of the most successful companies in the world leverage treasury management solutions to maximize cash flow and minimize risk. They understand how vital their financial resources are and will do everything possible to enhance cash visibility.

Accounting team working together on a laptop

Treasury management software can give business leaders the tools to track cash as it flows through the company. It also generates reports on how much you should set aside monthly for overhead. In addition, with treasury solutions, you can:

  • Automate payments and collections, which reduces manual effort and improves accuracy
  • Get greater transparency into the company’s financial activities to ensure compliance with regulatory requirements
  • Enable treasurers to respond quickly to changes in market conditions by providing up-to-date information on interest rates, FX rates, and other operations-related data points

Treasury management solutions may also improve department collaboration, providing a centralized platform for managing financial activities such as budgeting, forecasting, and reporting.

By aggregating data from multiple sources into a single platform, treasury professionals can easily share insights with other stakeholders in the organization. They can then make more informed decisions about how to use the company’s resources best.

Treasury Management Solutions Bring Real Results

This only scratches the surface of what treasury management solutions can do for your company. By investing in these solutions, your company can:

  • Save Time: Treasury management software can reduce the time it takes to initiate and authorize payments.
  • Minimize Risk: Treasury management solutions identify and protect against risk far better than manual processes. The money you’ll spend on treasury management software is significantly less than what you’d likely lose to a bad cash flow management decision.
  • Streamline and Track Cash Flow Processes: The larger the company gets, the more challenging it becomes to track money as it moves in and out. Treasury management software streamlines the entire process by providing a scalable, uniform way to manage cash flow.
  • Bolster the Company’s Financial Health: Investors want to put their money into healthy companies. Thanks to effective cash management and accurate forecasting, treasury management software puts your financial health on full display.
  • Solve Problems Quicker: Agile businesses are generally the most successful ones—they can solve problems as they arise instead of letting them fester. Treasury management software identifies cash flow issues that require immediate solutions.
  • Improve Decision-Making: Problem-solving and decision-making go hand in hand, as both are extremely time sensitive. Waiting on manual processes can be a gross waste of time. Instead, treasury management software provides real-time data to ensure business-critical decisions are made ASAP.

Use Data and Projections to Justify Solution Implementation

You can sing the praises of treasury management solutions all day, but your CEO will still want to know how much it costs, how it’ll help the company, and what the return on investment (ROI) should be.

To make a solid case, consider going beyond the basic aspects like identifying, prioritizing, and calculating the advantages of investing in treasury management solutions. As the CFO, what best practices can you leverage to build a strong case for treasury management solutions?

To start, consider keeping your business case simple. Outline your needs, then unpack their value. Let’s say one objective is to improve cash flow forecasting. The business case will suffer if the team can’t attach value to that objective.

How will the treasury team leverage better cash flow forecasts to improve earnings on surplus cash? Will they reduce debt? How will they mitigate risk? The CEO will likely ask these and similar questions, so be ready with the answers.

Next, determine a timeline for implementation. Detail how and when you’ll measure the treasury management software benefits. Then, compare that to the business case’s ROI projections. Your business case document can establish steps the treasury department will take to:

  • Screen and assess vendors
  • Evaluate and purchase the best system for the company’s unique needs
  • Craft an implementation roadmap
  • Receive executive approval

Finally, ensure the business case document delegates crucial tasks and establishes expected outcomes at each stage of the decision process. The CEO will likely also want a timeline of when these tasks will be completed and what resources will be required.

Team discussing treasury management solutions

Think Beyond Your Team

Business case documents aside, how else can you convince the CEO to make a major technology purchase?

Make It Part of a Bigger Plan

CEOs like looking at the big picture. While it’s important to pinpoint the finer details, you might want to ensure your business case is part of a more comprehensive growth plan. Consider building a blueprint that explains how your treasury department will evolve and how implementation will improve the entire organization.

Engage With Other Teams

New treasury management solutions will likely touch a large group of IT systems within your company. They may also affect external stakeholders, including your vendors, partners, IT teams, Automated Clearing House (ACH), and the bank. Consider consulting with appropriate stakeholders within these organizations to ensure seamless treasury management software integration.

For instance, IT teams can address cybersecurity concerns  while determining which tech model—on-site, private/public cloud, hybrid system—is best for the company. These extra insights can go a long way in convincing the CEO to approve your plan.

Find Your Best Treasury Management Solution

Treasury management solutions can help your company attain its financial goals. Cash visibility is crucial, especially as we continue to face uncertain economic times. CEOs will want a clear picture of new tech investments' advantages. Most importantly, they want to know how much they’ll cost, what they’ll improve, and how they’ll affect the bottom line.

Reach out to Minnesota Bank & Trust, a division of HTLF Bank to start a conversation with one of our bankers today. Together, you can determine which treasury management solutions are the right fit for your company.

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