Treasury 2025: Top Initiatives of World-Class Treasuries

Valerio 2:09
Yeah, I mean, I think from you know, overall, from a strategic perspective, I can’t remember the gentleman’s name but he was presenting earlier today. Talking about the heavy use of Excel spreadsheets. When you think through technology, technology is only as good as actually how you actually design out your operating model process. And a lot of times, you know, we often we hear clients migrating from one Treasury system to another one platform to another. And, you know, really they’re looking to just implement you know, very similar processes. So not taking a look at how to actually better enable some of the solutions that you’re actually implementing out of the box and really better leverage the data from that system. And, you know, and so thinking through how that actually fits into your operating model, so a slightly different view of how Treasury is traditionally implemented, systems looked at how to actually build out processes. And so we’re really seeing clients, like, really think about the outputs that they’re looking to achieve, both from a technology standpoint and then from a reporting standpoint, even more strategic adviser to the CFO, so that you can start to think through other areas of the Treasury function that can be somewhat commoditized, either through a shared service center or through some sort of operating model structure that really allows for better efficiency. Secondly, when you think through like what digital evolution as you start to talk about technology, typically the treasurer and he’s kind of like, slightly behind on that front. And most of those initiatives are actually being driven by we’re seeing most of those initiatives being driven by the IT organization. So as you’re thinking through operating model changes, as you’re thinking through how to actually structure areas of your business, it’s really where it’s kind of bring in tax Treasury funding, broader finance, and really important to bring it to the table to be able to think through what that digital What does digital options might look like, because they’re typically the ones setting strategy for how you actually be through digitizing. You know, and then, you know, from a recording standpoint, treasuries really becoming a more strategic and like I said, History, changing function to the CFO and creating better reporting. aspects. Out of the systems that they’re using are data that their data that they’re, leveraging. It’s less about the actual balances and cash visit traditional accounts cash position, on a daily basis and more about thinking through where those critical inputs are within the broader business. Which typically, you know, that’s oftentimes becomes a challenge because oftentimes that just doesn’t sit in in a traditional ERP as well. And then, lastly, from an initiative standpoint, we think through kind of payment consolidation triggers really owning the cash right so that you need to think through and be a steward to kind of what those controls are being put in place. We’re working with so many clients right now, we’re still heavily reliant on electronic bank platforms in the industry or within the broader business to actually execute on some of those payments. The critical risks there is there’s no kind of control around exit points of the cash from the business. So there’s a heavy focus on centralizing a lot of the payments through, you know, some sort of central corridor, a payment.

Ehren 5:33
Absolutely everything coming in Treasury more than ever, I think needs to take an active role. In interjecting themselves in intimidation if I’m going into organization. So for instance, if you think about like Adam was mentioning, digitalization, often driven by it, as you said, but I mean claiming a role claiming a need I think is part of like, inactive attitude that Treasury should pay. So if you think about like, we were talking in the previous session about possibly having like shared database data, participating in having access to those database in order to qualify better metrics and KPIs and be able to report on those more precisely and timely I think, is one key aspect to consider. And I mean, maybe go into more the operational side of what level you cover. I mean, these are also possibly the roadmap This is possibly the roadmap on how to pass to approach this exercise. And I don’t know I mean, you won’t have any comment on the first one

Valerio 6:53
well, I think it’s just a natural progression of how you actually get to this end state, which is thriving processes, workload and workflows within the organization. Again, the typical approach, I think that we’ve seen is typically these are somewhat flip flop. So when you look at your treasury workflow and processes you know, what we’ve traditionally seen as the system infrastructure becomes the end game, you’re kind of setting those processes that are ideal for Treasury or for your organization, and not necessarily looking at the capabilities of the actual technology that you’re actually implementing. And that’s where things start to go a little bit sideways. Because the issue of the system isn’t quite doing what you’re looking for. It’s not producing the outputs that you’re actually looking for. The way you’re looking to produce those versus, hey, you probably actually are using the right system. It’s just a matter of leveraging the system for the capabilities that it provides out of the box allows you to also become a more scalable Treasury function within the organization. So as you get through things like mergers and acquisitions, it’s a little bit easier to kind of onboard new entities or books or to look at, you know, the flip side of that which is carving out aspects of your business. So I mean, obviously, within the current environment. Personally, I would have never envisioned myself standing up here and the white sneakers present, you know, presenting at a conference, but I think at some point, we’re all going to be flip flops, right? So you know, most of us are probably sitting at home with a tie and business suit on and you got your pajamas on down below. So virtually, being a virtual organization and being able to connect to different applications within your business infrastructure is gonna be critically important. Right? So how does Treasury think about when you think about when COVID happened and one of the critical issues was how do people actually access the relevant technology or systems that they’re actually using? And then really looking at you know, from a centralized like, from a banking infrastructure standpoint, how can you better leverage internal and in house payment thing in House Banking structures, supplemented by some sort of gaming factory to actually drive how you actually pay your clients and your customers and also pay internally as well? And then, yeah, so like enhancement of shared service and is one of the things we’re starting to see as our clients are shared service centers are critically important, I think to, again, talked about standardization. We talked about a lot of operating aspects the Treasury actually does, moving that into a more shared service. Infrastructure, we’re actually starting to see some of our clients actually take a more regionally focused approach to actually decentralize expertise within the business so that from a regional perspective, they can more efficiently operate as well. And a lot of that’s purely centered are centered around you know, how they actually visualize, manage and structure their cash so that they can better manage that and better leverage that within the organization.

Ehren 10:04
Yeah, I think I mean, we’re trying to highlight some of like, the areas and steps that should be probably focus on revisiting periodically. And because I mean, coming to the second step banking landscape, of course, all of us we have like bank relationships already established, we have like, terms agreed upon. I think the difference should be to constantly revisit and assess and benchmark because that’s how you can only understand whether or not you’re getting good terms. You’re getting good service, and there’s nothing out there that possibly can make your operation better. So I think that’s that’s the mindset. And at the same time, I mean, as again, we’re a technology company or technology evolves. I mean, see what’s out there in terms of also security in terms of like connectivity, in terms of like, how you can interface and collect data. API is a big thing. Not all the banks are on the same page on that. There’s no banks can offer what another bank scan and being able to enhance and maximize for instance, API transmission to a specific banks because we can make a difference in how accurate and finally you can be seen already in your data match.

Valerio 11:27
Yeah, I think something that also just as a supplement or add on to that too, but you know, the bank connectivity piece of it, a lot of it’s driven by the banks, right. So when you start thinking through what API actually looks like, in some instances, it’s not actually an API. It’s just more frequent calls. to the bank to try and figure out where we’re trying to get more of that real time visibility and reporting, which has a cost component to it. So you really need to make sure that you’re leveraging the right banking partners to be able to build that type of connection between my first job out of college when I first joined, again, the gentleman Oh, yeah. He talks about, he referenced XR T. Right. That was like one of my first jobs out of college was writing fake scripts. And I have long term, like traumatic you know, hearing that is it. That was my introduction, and that was effectively my introduction into treasury. Right. And it’s come a long way kind of traumatized to the recipe. Yeah. Yeah. So I mean, it’s, it’s come a long way around how we actually connect the Treasury really needs to be that central point to drive all the connectivity out to the organization. System. So yeah, I mean, one of the things that we’re we’re actually starting to see so the one global portal thing is actually nice to have. It’s what we’re starting to see is it’s not necessarily a must to have a must have. So a lot of our clients are starting to realize from a point solution perspective, there are options out there, especially with the amount of connectivity that you see within the vendor landscape around API connectivity Europese or connect different connectivity and integration into from a TMS to other point solutions. So we’re definitely starting to see a lot of our clients focus more on what’s the actual best solution and infrastructure to implement in order to, to Kanaky that maximum efficiency around the sweet spot of the vendor in the sweet spot of the solution that you’re actually using. Versus we’ve tried to kind of put everything into a single platform. And we’re going to deal with a couple areas that aren’t necessarily ideal. That’s where you start to see a lot of heavy use of Excel. So, again, you know, from a seamless integration standpoint, it’s the connectivity is definitely better. So from a treasury and workflow process, again, making sure that you can build out some uniform processes where you know, we see we’re actually seeing clients go with various SAS vendors and leveraging those vendors that actually are less customizable so that they can actually build out a standard process again, thinking through how can we can actually leverage the technology the implementing best out of the box versus forcing the vendor to be something that maybe they’re not, which long term becomes somewhat of a support nightmare. Plus, and again, as you want or various businesses, that becomes a lot more challenging as well. I would say the D. D materialization. of papers probably not a thing. It should be the dematerialization of excel in a lot of instances because again, the reality is most of the systems that we see our clients using a they’re really just a data repository, that they extract information into Excel. So thinking through how you can actually leverage that through vi through the actual natural appearance, reporting tools that the system provides, along with those integrated controls,

Ehren 14:58
and I would say that I mean, technology, I mean, thinking new features should probably trigger reviews, you’re done all processing procedures and even policy in a way you should be looking at and review. Right. So I mean, we’ve seen many times that companies despite I mean, they could leverage much more trying to process streamline procedures they like and quote ensemble, like a ancient way of doing things, which I think maybe it makes them more efficient. So just to summarize, right on the quick conversation we had today, we just tried to list what successful prints should be in the treasury. And again, like access to data and real time reporting, I think it’s nowadays a reality. And if you’re not agreed to do that, that possibly you’re putting yourself at a disadvantage. So investing in order to cover that gap should be a key aspect. And what are you

Valerio 16:02
willing to critical? So the proactive approach towards liquidity? You know, it really just becomes a matter of making sure that you’re actually forecasting accurately, you’re taking the right approach to forecasting and not just leveraging data from a single solution. A lot of times, you know, that data is within the organization. There needs to be a strategy around consolidating that typically not through your treasury management system. And you really need to kind of think through from a business strategy standpoint, how that actually fits into the broader needs. It’s great to get cash visibility, but if somebody’s sitting there saying, Why do I have to do $100 million sitting in a bank account over in London and why isn’t that being leveraged when you don’t actually have any visibility on where that might be? You know, what that might be strategically placed for two to three weeks out?

Ehren16:56
Yeah, also creaming yourself, you know, keep measuring key metrics, and KPIs in order to be able to record depending on what they ask is, or even in semi certain aspect. I’m not focused on the primary goal of the organization. Let’s say maintaining full visibility on the pattern and historical behavioral, let’s say, your DP or DSO cash commercial psychometrics is key in order to drive funding and planning strategies. So I think any Treasury should have like a correct reading of that at any time. And I mean, if you train your TMS and your technology correctly, you should be able to catch up. On the last one is kind of related. I don’t know if you have any closing remarks.

Valerio 17:46
I mean, I think it’s just, you know, we were we’re working with some clients now we’re actually taking a very basic approach to this right. Paying, paying customers based off an invoice that you receive versus collecting cash from a client that you’ve actually invoice from. In a lot of instances, that becomes a challenge because there’s some disconnects in you know, there’s disconnects that get created within the business where you have cash incoming that you don’t actually know where that’s actually supposed to be applied to. And, again, you start seeing cash sitting around waiting to be applied, but not really leveraged for broader business needs. So just really making sure that you have that discipline approach to how you’re actually thinking through the cash lifecycle, versus just meant to make the actual management of cash. Well, thank you