3 Super Critical Areas Every Treasury Manager Needs to Focus on in 2024

Introduction

The role of a treasury manager has transformed significantly over the years. With the ever-evolving landscape of financial markets and the constant shifts in regulatory requirements, treasury managers have shifted from traditional cash management to becoming strategic partners with CFOs. These changes have introduced new challenges and opportunities that surround them in their daily tasks.

Amidst this evolving role and the emerging challenges, treasury managers must prioritize certain key areas to ensure success. In this blog post, we will explore the three focus areas for treasury managers in 2024. 

Additionally, we will examine how cloud solutions play a role in supporting their expanding responsibilities and ensuring compliance, with the changing financial landscapes and regulations.

3 Critical Focus Areas for Treasury Managers in 2024

1. Speeding up digital transformation

The digital transformation of treasury management is gaining momentum. According toHSBC’s survey, over 50% of businesses recognize its potential. To accelerate this shift, treasury managers are focusing on automation, streamlining laborious tasks like reconciliation.

Integration is another key strategy treasury managers are focusing on, as it enables smoother financial processes. Centralized online tools enhance visibility and control over treasury activities, providing real-time insights for better decision-making. 

How cloud solution helps: Treasury cloud solutions accelerate digital transformation efforts and help in reshaping the roles of treasurer and treasury managers by automating processes, reducing errors, and facilitating seamless data integration. They provide the necessary technological foundation for treasurers and treasury managers to embrace automation, streamline operations, and ultimately enhance the efficiency and effectiveness of treasury functions.

2. Investing in cybersecurity and fraud prevention

Businesses are facing an escalating threat from fraud, with more than 80% of treasury managers acknowledging a significant increase in these risks, according to the Treasury Fraud & Controls Survey. Recognizing the urgency, treasury managers are actively bolstering their defenses. They are embracing advanced technologies such as Machine Learning (ML) and Artificial Intelligence (AI) to enable real-time monitoring and detection of suspicious activities. 

Additionally, treasury managers are also keen on investing in employee security education and training programs to build a knowledgeable and vigilant workforce, which will serve as the first line of defense against fraud, safeguarding critical financial data.

How cloud solution helps: As organizations face escalating fraud threats, treasury cloud solutions contribute by providing secure, cloud-based platforms with robust cybersecurity features. Moreover, these platforms enable the implementation of AI and ML-based fraud detection systems, which bolster an organization’s defenses against financial threats.

3. Enhancing cash forecasting accuracy

In 2024, cash-flow forecasting will take center stage for treasury managers due to the complex challenges of a global economy, supply chain disruptions, and evolving customer behaviors. To navigate these uncertainties, treasury managers are increasingly turning to data-driven forecasting and advanced analytical tools. They can develop precise cash-flow predictions by harnessing historical data, monitoring market trends, and incorporating real-time information.

Additionally, they are adopting scenario planning to prepare for unexpected disruptions, enabling them to assess the impact of various economic conditions and implement responsive strategies. Accurate cash-flow forecasting empowers treasury managers to proactively manage liquidity, optimize investments, and secure financing, ensuring the financial stability of their organizations.

How cloud solution helps: Treasury cloud solutions empower treasury managers with advanced analytical tools and real-time data access, which are critical for precise cash-flow forecasting. The ability to harness historical data, monitor market trends, and perform scenario planning ensures that treasury managers can navigate economic uncertainties with confidence, optimizing liquidity and financial stability.

How Can the Treasury Cloud Help Treasury Managers?

In the world of financial management, treasury managers are entrusted with a multifaceted role, encompassing critical responsibilities such as cash flow management, cash forecasting, financial instruments trading, cash and deal accounting, bank relationship management, forex risk management, and board report preparation.

Treasury cloud solutions represent a transformative force in the field of treasury management, serving to both automate and elevate various facets of a treasury manager’s function.

Automation: Treasury cloud solutions automate several routine tasks, such as cash flow management, board report preparation, cash accounting, counterparty risk reporting, and payments. This automation saves valuable time and significantly reduces the risk of human errors. 

Enhancement: Beyond automation, treasury cloud solutions enhance the role of treasury managers. It optimizes cash forecasting, aiding in investment, hedging, and borrowing decisions. Cloud solutions provide data-driven insights for financial instruments trading, guiding managers in making informed recommendations. 

In forex risk management, AI helps determine optimal hedging strategies for current exposures. Bank relationship management benefits from AI analytics, assisting managers in selecting the right banking partners to align with portfolio guidelines. 

Treasury Managers: Be Future Ready With HighRadius

At HighRadius, we help businesses especially treasury managers to streamline and automate treasury operations. HighRadius’ autonomous treasury software not only gives treasury managers the ability to manage treasury operations better but also gives them real-time visibility into data for making informed decisions. 

Here’s how HighRadius Treasury Cloud offers several advantages to treasury managers, helping them focus on four critical areas that we discussed earlier:

1. 1. Automation, Flexibility, and Scalability: HighRadius’ treasury cloud facilitates automation, flexibility, and scalability in the following ways:
      • Automates data gathering and consolidation in a centralized repository accessible from anywhere.
      •  Provides flexible cash forecasting models for accurate predictions, especially for complex categories like AR and AP.
      •  Supports scalability by easily accommodating multiple bank accounts, new acquisitions, or divestitures.
      •  Efficiently handles large volumes of bank data, streamlining treasury processes.
   2. Enhanced Security and Fraud Prevention: HighRadius cloud treasury management system helps with cybersecurity and fraud prevention in the following ways:
      • Automates bank statement reconciliation with user-defined tolerances and matching rules.
      •  Detects inconsistencies, unusual transactions, and suspicious trends, bolstering cybersecurity.
      • Centralizes bank account management across countries and banks, improving financial oversight.
      •  Helps identify cash flow issues, reduce borrowing costs, and optimize working capital.
   3. Improved Accuracy: It helps increase accuracy, boosting confidence amongst treasury managers with recent numbers and data-backed reporting. Below are some ways in which our software enhances accuracy:
      • Enhances accuracy by incorporating relevant variables for precise due date estimation of unpaid invoices.
      • Automates data extraction from various sources, including spreadsheets, banks, and TMS.
      •  Utilizes historical and current data for pattern recognition and trend analysis.
      •  Enables scenario analysis, manual overrides, and variance analysis for better decision-making.

If you are looking to streamline and automate your treasury functions, check out HighRadius autonomous treasury software, or talk to our expert to know more.

FAQ

1). What does a treasury manager do?

A treasury manager is responsible for managing an organization’s financial health. They oversee cash flow, optimize investments, and ensure liquidity for daily operations. Moreover, they mitigate financial risks to maintain the financial stability and profitability of the company.

2). What is the difference between a finance manager and a treasury manager?

A finance manager oversees a company’s overall financial strategy, including budgeting, financial reporting, and investment decisions. A treasury manager, on the other hand, focuses specifically on managing a company’s cash flow, liquidity, and financial risks, often through activities like cash management, debt financing, and hedging.

3). Why is the role of treasury manager so important?

The role of a treasury manager is crucial because they are responsible for managing a company’s financial assets, ensuring liquidity, minimizing risk, and optimizing cash flow. Effective treasury management is essential for a firm’s financial stability, growth, and ability to meet its financial obligations.