Key Traits Required in Treasury Leaders for Better Treasury Management

Current Treasury management and its functions

Treasury management ensures the business has enough cash to meet its financial obligations. It contributes to optimal cash flow use and proper utilization of idle funds. It performed a critical role during Covid-19 and has been a reliable partner in the crisis. Organizations reduced CAPEX spending while maintaining cash reserves, emphasizing the significance of liquidity planning and cash management. Since then, the treasurer’s role has changed from being a transactional employee to a strategic counselor to the C-suite.

With the upcoming recession, treasury management is dealing with uncertainties such as:

1. Volatility in foreign exchange (FX):
   Pulling funds out of a foreign company unit at the wrong moment can be costly for organizations. The significance of FX risk management has significantly increased over recent years due to black-swan events such as recession, inflation.
2. Fluctuations in interest rates:
   There are several phases of rising and falling interest rates during a recession. Feds typically raise interest rates during high economic activity and spending to close the supply-demand gap. As a result, spending and purchasing are reduced, which progressively triggers a recession. To stimulate the economy during a recession, the government lowers interest rates. As a result, businesses forecast cash frequently throughout this time of shifting interest rates to monitor their cash flows and prevent cash shortages.
3. Counterparty risk:
   According to the aforementioned recent Financial Insights and Treasury Strategies study, corporate treasurers are particularly concerned with counterparty risk. Most organizations are now more concerned with risk management due to the volatile conditions in the global marketplace.

What are the challenges of treasury management?

Choosing and implementing the best treasury management system for their organizations’ needs is one of the most difficult issues for modern CFOs. In recent years, the technology available to mid-market CFOs has grown in complexity. As a result, choosing robust treasury management software has become much more challenging.

Treasury management challenges

These are the problems faced by treasury leaders in treasury management:

How can a treasury leader keep up with the changing times in treasury?

Treasurer leaders’ role has constantly been evolving, and it now plays a more strategic part in important decisions. Strategic management and short-term and long-term cash forecasting remain top priorities.

Treasurers are pursuing to increase financial value and support business growth while also protecting the company from market volatility.

What are the priorities of a treasury leader?

Corporate treasurers should keep up with the changes in treasury by possessing the following:

• Switching from transaction processing:
  Nowadays, treasury leaders are shifting away from manual transaction processing. Data integrity, availability, and security are all ensured by transaction processing systems, which offer an environment for code execution. Additionally, they ensure that the system is administered with a high frequency of transactions and quick response times.

• Taking up a strategic advisory role for the business:
  A strategic advisor keeps an eye on every facet of a company to make sure it runs as efficiently as possible. The strategic adviser keeps an eye on every aspect of a business to ensure it operates efficiently. A strategic treasurer’s duties also include advising senior management on how to advance results, ensuring that all internal operations are running at peak efficiency, and offering sound business advice.
• Gaining access to the financial sector to finance growth:
  Financial markets significantly influence the effectiveness and expansion of the economy. Treasurers must mobilize savings and resources, choose projects, monitor and enforce contracts, and manage risks. Information collection, processing, and management are also necessary for healthy financial markets.

To excel in managing liquidity, treasurers must hone their technology competency and communication skills to bring more value and focus on essential metrics and strategic opportunities.

Treasury professionals with a strategic and futuristic technology perspective will comprehend the possibilities and implications of technology on the business. This includes issue-solving across the company rather than employing technology to solve a single company problem.

How does HighRadius treasury software improve treasury management?

Corporate treasury leaders must shift their thinking and strategy from tech-savvy to tech-first. This involves staying on top of the newest technological trends and strategically capitalizing on new technology or treasury management solutions opportunities.

The following are some of the features of HighRadius treasury cash management software:

1. Integrates with many data sources via APIs and sFTP:
   The treasury management system supports all file formats, including

• XML
• BAI2
• MT940
• ISO20022
• XLS
• CSV

It easily connects to all banks, ERPs, and independent market data sources.

• 360-degree view of the cash position of the entire organization:
  Treasury can use transaction-level drill-down to examine real-time cash balances across bank accounts, businesses, pools, and currencies.
• Keeps track of expected and actual transactions:
  Cash Transaction Explorer allows users to create cash or intercompany transactions and then search for them using advanced search.
• Transactions from the prior day are reconciled automatically:
  Transactions are automatically reconciled using predefined and user-defined tagging rules, with only a small percentage of exceptions requiring manual or automatic reconciliation.
• Improves maintenance of intercompany and notional pool balances:
  Intercompany transactions, balances, and interest are simply captured by the treasury management software system across all mirrored and notional bank accounts.

Schedule a demo to learn more about treasury management systems to help treasury teams from businesses of all sizes and industries.