Four Effective Ways to Optimize Your Treasury Operations
Contents
- Maximize operational efficiency
- Simplify where you can
- Make sure you’re protected
- Optimize the use of excess cash
It pays to be prepared for uncertainty. Even in a relatively stable business and economic climate, you may not be able to predict when circumstances will change on a dime.
That’s why it’s always important for companies to ensure they have the right banking partnerships. And just as you do with the other advisers you work with, such as accounting and law firms, it’s a good idea to leverage all the expertise your bank can provide. That includes having them take a fresh look at your entire operation, from your day-to-day needs to whether your organization is positioned to achieve its longer-term objectives.
When it comes to evaluating your banking partners, it’s important to look beyond pricing and products and consider a bank’s asset quality, leverage ratio and overall soundness. You’ll also want to make sure it’s a relationship that can help optimize your treasury operations.
Maximize operational efficiency
Leave no stone unturned when evaluating your current operation. There may be ways to improve even some of your more basic functions. Work with your bank to understand the following:
- Do you have the right types of accounts open for your day-to-day banking requirements?
- Are your transactional turnaround times as fast as you and your suppliers and customers need them to be?
- Is your fee structure in line with the value you’re receiving?
- Are you using the right products to achieve the right outcomes? Are there alternative products to manage your incoming and outcoming payments that offer reporting details, are less costly and easier to use for your internal processes?
- Do you have ready access to information and reporting to help you make sound decisions?
Simplify where you can
Improving efficiency is often a high priority, which means many companies can’t afford to have their employees spend time on tasks that don’t add value to the organization. Analyze the effort required to accomplish certain functions and see if they can be simplified. Are there digital platforms that can make conducting transactions more efficient? Are there ways to automate your cash management activities, such as consolidated accounts payable or receivable reports? Make sure you’re not only using the right tools, but that your employees understand how to use them to their full capabilities.
Make sure you’re protected
Test all of your fraud risk management protocols. Your bank should be keeping up with the latest fraud threats, including social engineering. Mitigating fraud risk isn’t just your bank’s responsibility; establish fraud-mitigation processes so that your employees are also vigilant against fraudsters.
Optimize the use of excess cash
Revisit the yield you are receiving on your excess cash. Do you have the right investment policies in place? Is your cash working as hard as it can for you? You may be able to make strategic investments in your business without having to borrow.
We constantly have conversations with clients who are trying to navigate an uncertain environment. While we know there are many external variables beyond their control that impact their businesses, addressing the issues outlined here can help ensure that their financial position isn’t one of them.
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Susan Witteveen
Senior Vice President & Head, Treasury & Payment Solutions
Susan Witteveen is an accomplished executive within the financial industry across North America, having spent over 20 years in a variety of leadership roles. …(..)
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- Maximize operational efficiency
- Simplify where you can
- Make sure you’re protected
- Optimize the use of excess cash
It pays to be prepared for uncertainty. Even in a relatively stable business and economic climate, you may not be able to predict when circumstances will change on a dime.
That’s why it’s always important for companies to ensure they have the right banking partnerships. And just as you do with the other advisers you work with, such as accounting and law firms, it’s a good idea to leverage all the expertise your bank can provide. That includes having them take a fresh look at your entire operation, from your day-to-day needs to whether your organization is positioned to achieve its longer-term objectives.
When it comes to evaluating your banking partners, it’s important to look beyond pricing and products and consider a bank’s asset quality, leverage ratio and overall soundness. You’ll also want to make sure it’s a relationship that can help optimize your treasury operations.
Maximize operational efficiency
Leave no stone unturned when evaluating your current operation. There may be ways to improve even some of your more basic functions. Work with your bank to understand the following:
- Do you have the right types of accounts open for your day-to-day banking requirements?
- Are your transactional turnaround times as fast as you and your suppliers and customers need them to be?
- Is your fee structure in line with the value you’re receiving?
- Are you using the right products to achieve the right outcomes? Are there alternative products to manage your incoming and outcoming payments that offer reporting details, are less costly and easier to use for your internal processes?
- Do you have ready access to information and reporting to help you make sound decisions?
Simplify where you can
Improving efficiency is often a high priority, which means many companies can’t afford to have their employees spend time on tasks that don’t add value to the organization. Analyze the effort required to accomplish certain functions and see if they can be simplified. Are there digital platforms that can make conducting transactions more efficient? Are there ways to automate your cash management activities, such as consolidated accounts payable or receivable reports? Make sure you’re not only using the right tools, but that your employees understand how to use them to their full capabilities.
Make sure you’re protected
Test all of your fraud risk management protocols. Your bank should be keeping up with the latest fraud threats, including social engineering. Mitigating fraud risk isn’t just your bank’s responsibility; establish fraud-mitigation processes so that your employees are also vigilant against fraudsters.
Optimize the use of excess cash
Revisit the yield you are receiving on your excess cash. Do you have the right investment policies in place? Is your cash working as hard as it can for you? You may be able to make strategic investments in your business without having to borrow.
We constantly have conversations with clients who are trying to navigate an uncertain environment. While we know there are many external variables beyond their control that impact their businesses, addressing the issues outlined here can help ensure that their financial position isn’t one of them.
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