What is a Treasury Management System [TMS]?

And the Best Treasury Management Systems

A treasury management system (TMS) helps to automate the back office of a company’s business obligations and financial operations. This typically involves enterprise software that automates manual and repetitive financial transactions.

A Quick Definition of Treasury Management

Every business on the planet has a set of financial obligations they must meet in a certain time period for effective debt management. The objective of a treasury department is to ensure that your organization has the proper cash flow forecasting to guarantee your financial risk is properly mitigated. 

Establishing treasury functions means writing policies and procedures that are designated with the goal of helping a business improve. This means freeing up more working capital by leveraging cash flow and avoiding costly interest rates on payables and receivables. Even a highly profitable business can fail without enough resources to cover obligations.

Treasury management solutions help a business decrease the amount of time it takes to collect accounts receivable and assists with the functions of financial planning. 

It’s a highly specialized practice that falls under investment banking by infusing data with internal business systems. This helps to improve visibility, liquidity planning, and forecasting by addressing account inefficiencies. It can also help to reduce fraud.

Cash management is a sub-function of treasury management and refers to the handling of a company’s daily cash flow and short-term assets. It also covers moving funds as needed to ensure adequate liquidity.

The Key Benefits of a Treasury Management System

How do you know if your business can benefit from the functionality of treasury management? When it comes to financial risk management, most financial institutions have guidelines in place to determine the types of services that will provide the most benefits for customers. 

The overarching objective of all of this is to ensure a business has persistent cash forecasts with a positive flow. The key benefits of treasury & risk services are time and cost reduction. 

These SaaS solutions can streamline processes and ensure less time and labor is spent on authorization and payment initiation. Additional benefits include:

• Better tools to manage bank related transaction fees
• Improved productivity with enhanced efficiency
• Better bottom-line decisions
• Detailed variance analysis with forecasting tools
• Straight-through processing in a centralized hub
• More control over finances with automation

Other financial services for global treasury include:

• Currency management
• Collections
• Reporting
• Disbursement
• Capital management

Why is Treasury Management Important?

Treasury management is important because it’s about maximizing the financial outlook of a company and improving decision-making. You can effectively monitor the timing of cash inflows and outflows while setting proper policies for AR and AP. 

Treasury management leads to better cash visibility and decreases financial risk. Obtain real-time data around a company’s current financial status and streamline risk hedging with the perfect ERP system.

This type of fintech can consolidate any redundancies around accounts to reduce fees and ensure receivables are posted quickly. Not only does this diminish vendor interruptions, it helps with fraud detection and takes advantage of early payment discounts. 

Organizations can spend more time on strategic tasks and less time worrying about finances. The increase in connectivity helps inform CFOs where the cash reserves are and in what currency. It lets a business know whether they need to invest or borrow and where their financial health stands.

The Top Treasury Management Systems

If you’re wondering the best ways to automate a treasury management system, here are some key players on the market today:

Kyriba

Kyriba is top-notch in capital markets for cloud treasury solutions and cash management technology. Their products are utilized by over 1,800 treasury customers worldwide to optimize global visibility and improve operational productivity in supply chain finance and risk management.  

Kyriba’s powerful software solutions give CFOs and finance teams the opportunity to make smarter business decisions. The fully virtualized tools offer the benefits of SaaS deployment and have been audited to meet the SOC 2 Type 2 standard which means clients can easily comply with external regulations and security policies.

Other key benefits include:

• Bank account management
• Bank fee analysis
• Cash forecasting
• Cash pooling
• Debt accounting
• Foreign exchange
• Gl reconciliation
• In-house banking
• Interest rate derivatives
• Investments
• Netting

Reval

Reval is a risk management and treasury platform that allows users to manage liquidity, financial risk, and cash flow. They provide a scalable, cloud-based solution that empowers banks to effectively manage financial risk, hedge accounting, and liquidity. 

Working in tandem with global clients, Reval is part of the ION group which delivers trading solutions and workflow automation to corporations, governments, and central banks. Their developers utilize the latest technologies to create high-quality financial software with corporate treasury management and key benefits like:

• Integrated market data feeds
• Access to community experts, developers, and clients
• Automatic upgrades with new features 
• Custom reporting and interactive dashboards
• Seamless connections to third-party platforms and bank portals

BELLIN

BELLIN is a leading provider of top-quality treasury management software solutions for corporate banking, SMEs, and large multinationals. The firm delivers products and platforms for risk and cash management, FX, and payments that streamline the relationship between corporates and banks. 

Headquartered in Germany, the international enterprise boasts over 500 clients with offices in four countries and more than 50,000 users worldwide. Key features to keep an eye out for include:

• Security, fraud, and compliance
• In-house banking
• Cash and liquidity management
• Financial instruments
• Payments
• Intercompany netting
• Risk and exposure 

Eurobase

A global business group operating in over 25 countries across six specialized areas, Eurobase provides quality software solutions for banks, insurance companies, and other financial institutions. They also offer consultancy and IT recruitment providing tangible business value to clients. 

Eurobase has adopted a personal approach to efficiently deliver support, flexibility, and service that customers need and expect. The firm has helped build long-lasting and profitable relationships for over 25 years in the industry. Consider these main features when shopping around:

• Pricing
• Sales trader solution
• Distribution
• Single dealer platform
• Online FX payments
• Regulation

Honorable Mentions Include:

• gTreasury
• SAP
• Microsoft
• SWIFT
• Oracle
• Calypso

Most of these systems are quote-based so you’ll have to call to get a better idea of pricing.

Final Thoughts

If you pay bills, treasury management is important. To maintain healthy cash positions and have a universal view of your business wallet in real-time, it’s an essential function for any successful business. 

If you don’t have the time to hire a top-notch New York finance pro, then consider automated treasury management software. It’s the fastest way to stay competitive and keep a finger on the pulse of your business finances.