Constructing an Effective Treasury Network
The key to unlocking collaboration and data accuracy
Why are networks vital to the success of treasury?
Treasurers have become key players in corporate finance and have a significant role in influencing the fate and decisions of a company. This is done through ensuring sufficient liquidity, making strategic investments, hedging, and M&A.
For a treasurer to fulfill that task successfully, they need transparency, accurate and timely data, and the technology that allows them to gather and manage all that data.
The digital transformation is showing us that data is extremely vital to companies in any industry and/or size. Imagine a world in which advertisements had no user behavior modeling. In this world, companies don’t care what your interests or demographics are, and you are fed advertisements regardless if it matches your persona. My spam folder would be endless.
Likewise, data to a treasurer is the key to efficiency and managing funds. Optimal financial forecasting and management rely on data integrity in order to make informed decisions. The best way to ensure optimal data integrity is to utilize a networking approach.
The Treasury Network: collaboration enabled
At BELLIN, we have constructed an approach to treasury that revolves around a company-wide “Treasury network”. We call it Load Balanced Treasury, which ensures a fair division of the workload as well as global data availability with the objective of enabling collaborative processes and decisions.
The benefits of that division are each subsidiary, regardless of size can increase their efficiency, data collaboration is centralized and in real-time, and the group treasury now has a pool of financial data to access for more reliable decision–making that was otherwise restricted.
Our load-balanced treasury approach has always been our way of encouraging intercompany collaboration. This is the first step to an even broader and more comprehensive topic: a cross-company data cloud. A fully anonymized data pool that all companies participate in to enable an industry-wide treasury network.
While some may be shy about the idea, the implications are an increase in productivity with fraud prevention, KYC, forecasting, netting, and overall treasury learning.
Because at the end of the day, it is people that share thoughts, ideas, innovations, and new strategies to optimize workflows. The way in which we share those elements is reliant on the accessibility and capabilities of the technology we share them on. The perfect blend of people and technology is the ideal median to achieving a treasury network both within and cross-company.
Let’s discuss how you can construct a treasury network in your company.
Constructing a treasury network
As mentioned, an optimal treasury network consists of 2 core pillars: People and Technology. This sounds like a broad stroke approach, but we will discuss the specifics of each of these a little more.
How far does your network of employees extend within your treasury workflows, both internally and externally? This list can be very long depending on your individual corporate structure. Stakeholders include management, various departments (AP/AR, FP&A, tax, legal, HR), subsidiaries/local offices, other treasurers, banks, consultants, thought leaders, technology providers, etc.
The inclusion of as many key parties as possible in your treasury network can be beneficial as it provides different angles of feedback. For example, your HR department can provide input that helps provide organizational optimizations while thought leaders can exchange information on new strategic workflows to streamline existing processes.
But the key factor to remember is the collaborative nature. Having multi-channel data sources is the key to making sure your treasury network is maximized.
Before COVID-19, real-world collaboration was straightforward. Now, we find ourselves interacting with local or outside stakeholders from our homes. The degree and ease of that interaction is all dependent on the systems, technology, and even workflows each individual company has or doesn’t have.
In simple terms, the companies with the pre-existing infrastructure and technology to support remote work were coasting along while the companies dredging along in traditional technology stacks struggled to adapt.
The same is true for your company’s treasury and financial well-being.
For a treasury network to be successful, the technology you use can either stifle or enable uncapped collaboration and a significant uptick in efficiency. Our recommendation here (shameless plug) is a treasury management system like tm5 that is built with those attributes in mind. Think of tm5 as a social networking site. It is the medium in which we (treasurers) can use to gather valuable data and for treasurers to contribute to the overall pool of community insights.
The system enables de-centralized collaboration on a centralized platform. What this means is that all relevant stakeholders have access to the system where they can upload financial data, benefiting everyone across the corporate chain.
But tm5 is not alone in this treasury network. We understand the importance of a holistic approach to finance that involves a host of disciplines. Whether it is accounting, treasury, procurement, etc., our goal is to create a bridge that makes a collaborative network possible.
As most treasurers are aware, reliable data that is timely is extremely important to the group-treasury‘s ability to effectively manage liquidity. Equally important is each individual subsidiaries’ freedom to make independent financial decisions. The load balanced treasury approach ensures this.
It isn’t hard to begin thinking about where such data improvements and a cloud-based treasury network can yield significant utility. Fraud prevention, KYC, forecasting, netting, benchmarking, and more are all topics that such an uncapped network of collaboration can bolster. But more importantly, having users buy-in to the technology and the ecosystem that permits it is just as important.
Creating a network that allows for an exchange of data between parties is an operating model that is proven and effective. Treasury relies on data accuracy and timing. If you can construct an operating model that utilizes people and technology to maximize the free flow of data, not only will you become a well-oiled liquidity management machine, your corporate and local subsidiaries will begin to operate just with maximum efficiency.
So, my parting words are: For a treasurer, leadership means enabling your team and related parties. It means creating an environment that encourages collaboration. With BELLIN tm5, you can establish a treasury network and have the technology that allows you to do so.