How to Optimize Treasury Data

Better data quality for better decision-making

How to Optimize Treasury Data
Author: Axel Goedecke
Posted on:
November 1, 2018


Companies put a lot of money and effort into fraud prevention. They invest in counter-measures, and rightly so! But while the focus is on external threats, a much-underestimated enemy is lurking on the inside: poor data quality. In a recent study conducted by management consulting company Horvàth & Partners, more than half of all polled CFOs bemoan insufficient data quality. Obsolete, incompatible and incorrect data presents a threat to every company. So how can the quality be improved to ensure treasurers have all the information they need?

Obstacles to good data quality

One of the main obstacles when it comes to good data quality is a lack of appreciation for the value of data. While treasury departments are finally coming into their own, establishing themselves as entities that provide added value to their company, many still dismiss them as unproductive cost centers. From a business and economic point of view, it is much easier to argue for the investment into a new sales channel than it is to sell a treasury management system business case. As long as there are no major issues in the finance department, there’s nothing to worry about. Or is there? Cutting corners in the treasury department is a dangerous way of saving money. Because the truth is: incorrect data leads to misguiding KPIs, and they can be costly.

Specific threats to good-quality data

  • Manual entry
    Before any data can be processed, it needs to be entered in the system. Often, things go wrong as early as in this very first step. Data is frequently entered manually, which is prone to errors: a typo or decimal point in the wrong place, and the consequences can be disastrous. As a consultant, I’ve come across multiple cases where mixing up pluses and minuses during an HR payment run led to an overdraft amounting to several millions.
  • Fragmented system landscape
    Companies use many different types of systems: ERP systems, ordering systems, logistics systems, accounting systems, payment systems, banking solutions etc. Every one of them has a different underlying logic. Treasury however requires data from many different departments and needs to consolidate this information. This can be achieved by synchronizing systems or creating interfaces. But often, data is tediously re-entered manually, inviting errors.
  • Insufficient data maintenance
    A new bank connection, changes to the organizational structure, newly introduced standards? This is business as usual for every treasury department. Whenever any data is changed, it needs to be adjusted in the systems – in all of them! This can be problematic. On one hand, it is not always followed through methodically and some systems are missed. On the other hand, there’s often no overview of all the software solutions used group-wide that might impact shared data.

Ways towards improved data quality

When many different departments access and use the same data, it makes sense to use one single system throughout a group. That said, depending on the size of a company, introducing one overarching system can turn into a mammoth project. Additionally, this is not in favor of data quality. As I have previously outlined in an article, systems today need to deliver top results for all departments and disciplines. A single, cross-departmental system is simply not up to the task of providing the quality of data treasury requires.

The best way to achieve excellent data quality in treasury is a modular treasury management system with an integrated payments platform. This system features all treasury-relevant data on one platform. You can access and process data in the system as part of any treasury task – with positive consequences for treasury data quality and beyond:

  • Maintenance is limited to only one system, data can be synchronized overnight
  • Decentralized data entry in the different entities
  • Data in real-time quality
  • One common database for all treasury operations
  • Data import options with testing logic
  • Straight-through processing
  • Payment processing in a closed loop
  • Automatic account statement imports and exports
  • Digital processing of deals

It is also possible to use a whitelist filter in a treasury management system that prevents any incorrect data from entering the system in the first place. To avoid error-prone activities as much as possible, you can automate recurring actions in a treasury management system with an integrated payments platform, for example the import of bulk payments or trade deals.

Optimize the quality of your data and make better decisions

By using a centralized platform, the treasury experts in a company create transparency of all the treasury processes in their company. They know which entities have sufficient liquidity and which subsidiaries require funds in which currency. This way, treasurers can optimize the cash and liquidity management in their entire group. They can better assess risks and draw conclusions for optimized risk and exposure management. An integrated payments platform unlocks flexible solutions for all payments in a company. It enables treasurers to define cross-departmental and international workflows. Errors and fraud cases can be detected much quicker or avoided altogether. Treasurers manage payments to any bank and any country in the treasury system. They benefit from security and straight-through processing without any media breaks. The system gives treasurers accurate real-time data that forms the basis of reliable forecasts and plans as well as solid KPIs to measure success. Treasurers create analyses and reports that contain useful and actionable information, pointing companies in the right direction.

In short, treasurers can finally do their work without any impediments and create added value for their company. What are you waiting for? We can help you get started. Just send an email to welcome@bellin.com!

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