Written by Paul Tawel
The economic context in which we operate has changed significantly at a lightning speed over the past few years. Several factors have contributed to this change, mainly market globalization and advances in information technology and communications. Treasury departments have not escaped this trend. In recent years, the emergence of new banking solutions and IT innovations have forever changed the cash management process and working capital of companies. Ten years ago, who could have imagined that banks would accept that businesses make their deposits by submitting the image of their cheques online ? Who could have imagined that a citizen would pay for purchases using a smartwatch or that companies would be allowed to join the SWIFT portal in a safely and at low cost? All these changes have emerged to improve and simplify how banks communicate, increase cash management efficiency, make the lives of people easier and, of course, rationalize costs. More than ever treasury departments must modernize to monetize their organization and take advantage of the gains that all these technological developments can bring. Therefore, promoting change seems to be the only way to approach the future. The first step to improving treasury operations. But in this maze of cutting-edge technologies and new banking and financial products, how do you decide what is right for your company? It starts with identifying obsolete processes at all levels of cash management (e.g. collection, disbursement, cash consolidation activities, etc.). Then, treasurers should inquire, identify and evaluate innovative solutions on the market to adjust current cash flow problems and those on the horizon. The research and implementation of best practices becomes indispensable in this assessment. This exercise is complex and difficult; but if undertaken with the diligence and seriousness it requires, several possible solutions will impose themselves. Treasurers should make an effort to imagine what cash management should ideally look like in their organization. What procedures should be implemented in the next three to five years to generate maximum profits? Once this vision is well established, they can easily choose the optimal financial, banking and IT tools. Ultimately, this vision will be well documented. It is important that all the principles and concepts that are part of it are communicated throughout the organization to ensure that everyone understands why the changes are to take place, what are the objectives to be achieved over time and, ultimately, what will their involvement be in this to re-engineering effort. Ultimately, this vision will be well documented. It is important that all the principles and concepts that are part of it are communicated throughout the organization to ensure that everyone understands why the changes are to take place, what are the objectives to be achieved over time and, ultimately, what will their involvement be in this to re-engineering effort.