Treasury management software 101

Keeping track of cash flow, payments and financial risks manually can feel a little like blindfolded juggling. Luckily, treasury management software is here to give you full visibility and control of your finances.

Treasury management software automates manual processes, gives you real-time insights and ensures your company’s capital is used efficiently.

But what exactly is treasury management software, how does it work and how do you choose the right solution? In this article, we’ll take a closer look at treasury management software and how it can help streamline your finances.

What is treasury management software?

Treasury management software (TMS) is a specialised financial tool that helps businesses efficiently manage their cash, liquidity, financial risks and investments. It’s designed to give CFOs, treasurers and finance teams better visibility into their company’s financial position and make more informed decisions.

Key functions of treasury management software include:

• Cash and liquidity management
• Payments and bank connectivity
• Risk management
• Investment and debt management
• Compliance and security
• Financial reporting and analytics

In short, treasury management software has a lot to offer. Don’t worry – if you were hoping for more details, we’ll be taking a closer look at how it works later in this article.

Why is treasury management software so important?

Treasury management software is all about managing your company’s money and transactions to ensure efficient cash flow.

To give you a brief rundown, treasury management software:

• Improves cash flow visibility and forecasting
• Reduces manual errors and operations risks
• Enhances financial control and regulatory compliance
• Streamlines payment processing and reconciliation

In other words, TMS plays a central role in financial planning.

To predict when you’ll make a profit or need capital for expansion, you need to know your financial health like the back of your hand – and be able to make accurate forecasts of what’s to come. That’s exactly what treasury management software helps you achieve.

For larger companies, TMS is even more important. After all, you need to make sure the company doesn’t run out of money – and that it doesn’t have too much money sitting in one place.

By giving you a real-time overview of cash flows, automating routine tasks and helping you manage financial risks, treasury management software simplifies your financial processes, reduces risks and improves cash management.

All of this makes it easier for you to make smarter, faster decisions – decisions that help the company grow.

You might also be interested in: Cash management: What is it – and how’s it done?

Treasury management software – how it works

Treasury management software collects data from different sources – e.g. bank accounts, payments and investment portfolios – to provide a complete and accurate overview of your company’s liquidity. 

Using this information, CFOs, treasurers and finance teams can make informed decisions about cash management and investment strategies – and that reduces the risk of liquidity shortages and minimises the cost of loans.

To top it all off, treasury management software also offers tools to manage financial risks, such as currency risk, interest rate risk and credit risk. It allows you to monitor these risks in real time and gives you the full picture of your company’s risk exposure, making it easier to take proactive measures rather than scrambling to react in time.

Here’s a quick rundown of how it works:

• Data integration and bank connectivity: TMS connects to multiple bank accounts, ERP systems and financial institutions. It also aggregates real-time data on cash balances, transactions and financial positions.
• Cash and liquidity management: TMS gives you real-time visibility into cash balances, forecasts future cash flows and helps you get the most out of your working capital.
• Payments and reconciliation: The software centralises and automates payment processing whilst integrating multiple bank accounts. It also matches incoming and outgoing payments to bank statements.
• Risk management and hedging: TMS helps you identify financial risks – e.g. FX, interest rate and credit risks – and suggests mitigation strategies. It also supports hedging, derivatives and other risk management tools.
• Investment and debt management: TMS tracks investments, loans and credit facilities to make sure your capital is used right.
• Compliance and security: The software ensures your business sticks to the regulatory requirements. It also enhances fraud prevention through secure transactions and audit trails. Basically, it boosts compliance and security all around.
• Reporting and analytics: With TMS, you get insights through real-time dashboards, reports and scenario analyses. The software also uses AI and predictive analytics to help you make smarter decisions faster.

Essentially, treasury management software acts as a command centre for your company’s financial operations. It improves efficiency, reduces risks and gives you valuable insights to boost your decision-making – what’s not to like?

How to choose the right treasury management software

Not all treasury management solutions are created equal. Here’s what to consider when choosing a TMS solution for your business:

• Business needs: Make a list of which features are most important to you. Compare different solutions based on your business needs to find the solution best suited to your business.
• Futureproofing: You want a solution that works in the long term. Choose a system that doesn’t just meet your needs today, but scales with your business as it changes and grows.
• Implementation time: The longer a tool takes to implement, the more expensive it is. Look for treasury management software with a short implementation time and onboarding process.
• Good value for money: Make sure you get the value you’re looking for. Compare the solution’s pricing model with the value and features it offers and weigh the potential benefits against the cost.

Manage cash flow effectively with Pleo

With the right tools in your kit, you can streamline cash management and take full control of your company finances – and that’s exactly what we’re here to help you do.

Pleo’s new Cash Management Suite makes cash management simple. Stay in control of your spending and optimise your finances – all from one easy-to-use platform.

Get a real-time, centralised overview of your bank accounts, Pleo Wallet balances and financial activities. Automate your transfers between all your bank accounts and Pleo Wallet with advanced workflows and integrations. All of this – and much more.