What is a Treasury Management Software?

If cash concerns keep you up at night, you may need treasury management software for your business. Treasury management describes a whole range of working capital and cash flow concerns, and treasury management tools serve to simplify that side of the balance sheet. No matter the business size, we’re all digitized and, in many cases, globalized – making the need for a one-stop treasury management shop

 all the more important for today’s business leaders.

What is Treasury Management Software?

When you’re beginning your search for treasury management software, your research might dig up tons of varied descriptors. You’ll likely see treasury management software, treasury management tools, treasury management platforms, or even treasury and risk management software (that’s a mouthful!). No matter the nomenclature, these descriptors generally describe the same set of benefits and features that treasury management software offers.

Treasury management software is a centralized solution to bring many typical business financial functions under a single umbrella – especially as it pertains to cash and capital management alongside all peripheral processes like liquidity assessments and management, modeling, forecasting, and generating data-driven reports to inform strategic decision-making.

Bottom line – treasury management software describes a suite of tools on a central platform to let businesses manage cash and liquidity quickly and accurately. Moreover, treasury software systems track and monitor liquidity management, including debt, current investments, payment processing, fraud protection, and similar security risk management.

Key Features of Treasury Management Software 

While different treasury management solutions vary in unique offerings, they generally have a handful of common features. If you find your treasury platform lacks any of these key features, it’s time to consider an alternative.

• Financial automation: While accounts payable automation and similar AI-powered offerings are gaining ground, treasury management software also helps build automated workflows across many “boring but critical” rote functions that tend to accumulate human error. Treasury tools can generally automate transaction processing, bank or cash reconciliation, and payment management for company-internal investments and debt.
• Keep cash flowing and working capital ready to work: Treasury management solutions help monitor and forecast cash flow to ensure you have enough of it on hand when you need it while maximizing your business’ working capital needs by balancing accounts payable, receivable, and any inventory your company holds.
• Insight and analytics: Since we can’t manage what we don’t measure, treasury management tools step in to offer a range of data-driven insights and information to feed executive and strategic decision-making.

Are Treasury Management and Cash Management the Same Thing?

No – though often conflated, cash management and treasury management do not describe the same concepts, though they’re closely related. Cash management can be thought of as a short-term outlook: does your company have enough cash on hand to honor commitments, pay vendors, and manage debt interest payments today?                                                                                                                             

On the other hand, treasury management takes a more holistic, top-down approach. More strategic than tactical in nature, treasury management includes projections, estimates, and assumptions alongside investment and funding considerations. In a nutshell, cash management is part of treasury management, whereas treasury management encompasses many more financial functions than cash management alone.

How Does Treasury Management Software Work?

Treasury management software acts like a wheel’s central hub, pulling in data from a range of financial spokes to help manage liquidity, monitor cash flow, and generate data-driven insights. Treasury management tools effectively “de-stovepipe” information sources, like bank account balances, transaction records, and past pro forma projections, to give an at-a-glance insight into what’s happening behind the scenes.

Treasury management tools don’t just monitor, though – many also offer a range of automated functions like account reconciliation, compliance requirement management, general ledger populating, and more. These cut down on manual hours spent, saving your company time and money while avoiding costly human error.

Who Needs Treasury Management?

The bottom line is that, unless you’re a sole prop or very small “family affair” -style business, your company could benefit from treasury management solutions. Large, enterprise-sized organizations and small-to-medium-sized businesses (SMBs) both benefit from treasury management platforms – though each gets slightly different utility from the tools and takes advantage of differing benefits to the software.

For large and mega-corps, treasury management is critical as the range of spin-off firms, subsidiaries, remote locations, and other hurdles make managing financial statements and cash flow nearly impossible without effective automation and treasury management tools. Treasury management solutions step in for enterprise-level users to simplify workflows and processes while keeping the amount of direct meddling to a minimum, preventing fraud or errors.

For the SMBs on the smaller side, a simple fact is that treasury management tools can help offset the lack of accounting or bookkeeping experience and staff. Many SMB owners tend to push solid accounting practices to the background until it is too late. However, implementing treasury management along the way is one of several proactive steps owners can take to ensure they’re compliant and financially healthy. At the same time, rapid growth means working capital and cash flow come at a premium, and treasury management tools can help forecast and align that side of the financial statement with an owner’s best interests and plans.

Advantages of Treasury Management

No matter your business size, scale, or scope, you’ll enjoy most or all of these advantages rapidly upon integrating treasury management platforms:

1. Better financial management and oversight – keeping your house in order starts with aggregating information, and treasury management tools bring disparate data sources into a single stream for improved decision-making while preventing errors and fraud.
2. Cost-cutting: Through both time savings and cost efficiencies the platform itself unveils over time, treasury management tools effectively pay for themselves when used to their full advantage.
3. Improved shared understanding: Since treasury management tools aggregate info across a variety of domains into a single source dashboard that clearly and accurately communicates capital concerns to employees, management, investors, and other stakeholders.

And, of course, the primary benefit to treasury management solutions is the cash flow and working capital improvement prospects – which are enough to benefit businesses from the smallest mom-and-pop to a conglomerated mega-corp.

While picking the best treasury management software and tools is largely a matter of personal preference and business need, these popular picks tend to have features most business owners use most:

RocketChart

Targeting startups and SMBs, this France-based treasury management tool helps companies that need cash the most manage working capital and cash flow. RocketChart also offers projection, forecasting, and modeling tools to tweak variables and optimize your treasury management processes.

Trovata

Trovata targets a broader swath of users, from SMBs to large-scale operations. Trovata’s unique selling points include well-designed UI/UX and dashboards that give stakeholders across the enterprise – from executives to number-crunching accounts – accurate, timely, and readable cash flow visualizations.

Fygr

Fygr ties in with your existing banking institutions to aggregate cash flow and current holdings. By giving owners a holistic, top-down picture of cash, users can better project and forecast future flows and needs when generating strategic operational plans.  

Oracle Cash and Treasury Management

Working with name-brand companies when considering top treasury management tools is generally a safer bet than working with a fly-by-night SaaS run from some guy’s garage – and few industry names are as well-known and trusted as Oracle. Oracle’s software targets enterprise clients, so it may not be the most practical pick for SMBs.

ATOM Treasury and Risk Management

As the name implies, ATOM focuses on the risk management and compliance side of the equation as much as it does treasury management itself. For that reason, like Oracle Cash and Treasury Management, ATOM’s offering appeal more to an enterprise-level client with dispersed operations and complex cash needs.

How Do I Choose the Right Treasury Management Software?                          

When deciding between treasury management software, the top consideration is simple: does it fit into your existing workflow and operational ecosystem, or will you need to redesign your entire way of doing business around the platform? The best software, whether treasury management or otherwise, integrates seamlessly with what you and your staff are used to. Beyond that basic requirement, you’ll need to explore:

1. Scalability – can the platform grow with your business, or is it solely focused on smaller operations? Outgrowing software and onboarding a new platform can be expensive and time-consuming.
2. Security – while treasury management platforms usually put security at the fore, having your IT team as part of the conversation can ensure you’re not missing any critical flaws or gaps.
3. Placement – it may seem a no-brainer, but it’s tripped up more than one business owner in the past – will the platform be hosted on local hardware, or is it cloud-based? Again, having IT on board could prove invaluable in ensuring your company and prospective treasury management platform can nest easily.

Conclusion

Cash is king, and treasury management software is the throne upon which it sits. Keeping cash flow coming and working capital straight is tough no matter what size your business is, and treasury management is one of many tools to keep your financial fundamentals in good standing.

While many options exist, keep one thing in mind – ensuring your platform creates synergies within your system, not roadblocks or hurdles, is one of the most important things to validate. Few business resources are as precious as proper cash management, and trying to fit a square peg into a round hole can wreak havoc on your capital structuring.