Things to Consider for Treasury Management System Upgrading

Treasury management system [TMS] helps organizations to automate, control, and record many essential treasury functions. Cash flow is lifeline for an organization, so there is a need to be familiar with right cash position for accurate forecast. In addition, skillfully measure and study cash flow performance, so as to reveal any discrepancy.

Every year multi-national organizations board on treasury alteration projects. Several seek better information regarding their offshore cash balance, while a few of them focus on interest rates and hedging currency. However, the common consideration, which treasury project teams require to address optimal methodology for bank connectivity.

Gestion de la trésorie [treasury management] system is effective only, when you feed it with real-time information regarding cash positions, receivables, payables, foreign exchange rates, and interest rates. Therefore, majority of financial organizations reconsider their methodology for bank connectivity in synch with TMS upgrade.

Below are some things to consider for TMS upgrading

About bank connectivity

What messaging standard/s need to be used?

For domestic connections FTP is the standard and for international banks SWIFT is common. To decide most appropriate methodology for bank connectivity start with banking profiles.

  1. First aspect to consider is what standard is preferred by your treasury workstation dealer. Basically, dealers are adopting new ISO 20022 XML. A few treasury dealers support a combination of BAI2, SWIFT FIN, EDIFACT, SAP IDOC and EDI messages.
  1. Second aspect to consider is what standards does your financial institution support. Even if your treasury dealer is flexible, your bank may not be. Fortunately, if you have strong integration expert team then message standard issue gets neutralized.
  1. Therefore, third aspect to consider is to get familiar with your in-house IT team proficiencies. Integration and mapping professionals can rapidly transform information from one format to the other.

Create standardized payment policy & support compliance

Integrating payments with TMS makes it easy for treasurers to implement payment policy.  The approvals get conducted at a single location. Therefore, there is no need to maintain lots of tokens for payment approval on different portals. Working with reliable input screens helps to reduces human error risks. Arise of compliance issues if any gets reported early. For example, inconsistencies between payee or payor countries gets identified due to rule based engine.

TMS is in its progressive phase, where users will need to blend their skills with available tools to efficiently support the business. It is crucial to get familiar with the risks as well as how to populate and use this system in such a way, so that it can make a significant difference to your organization.