The role of cash management solution in treasury’s growth

What is the significance of a cash management system?

Tracking and reporting company cash flows are done with the help of a cash management system. It is notably useful for managing cash flows (in various currencies) between several company branches, including international ones, and multiple bank accounts.

The following interfaces in cash management software should be implemented to improve cash visibility, streamline reconciliation, and assure accurate and timely cash flow reporting.

Regular bank reports, cash transactions and balances are automatically gathered from numerous bank accounts to the cash management system for total cash visibility and faster reconciliation. Cash transactions are gathered from an ERP/accounting software to create ledger entries, and the cash management system gives information of the general ledger, A/P and A/R ledger for a given time period. The cash management system also helps treasury to analyze their current cash balances, and helps in making confident loans and investments related decisions.

What are the top features that treasurers demand in cash management software?

Today’s treasurers are looking for solutions that are both comprehensive and flexible. A good cash management solution, often known as a ‘payment factory,’ allows a company to centralize, automate, and streamline payments and cash management inside business units or throughout the entire company.

Important aspects to think of when setting up a cash management solution

• Capabilities for powerful data visualization: To improve cash transparency.
• End-to-end automation: To remove time-consuming manual tasks in all aspects of cash management, from cash positioning and reconciliation to reporting.
• Easy scalability of the solution: To analyze and retain more and more data on cash transactions, as your organization expands.

Key features of cash management software

These are the must-have features for a robust cash management software:

• Real-time/intraday statement reporting from a central location
• Data transformation and seamless integration with external systems
• Pooling of cash in multiple currencies
• Good multi-bank connectivity
• Auditing user/payment activities
• Automatic segmentation of cash transactions (for example, A/R, A/P, taxes, and payroll)
• Matching monetary transactions one-to-one, one-to-many, and one-to-all depending on established rules
• Detecting and preventing fraud

What are the top features that treasurers demand in cash management software?

As the work of the corporate treasurer becomes more complex, more companies are turning to automated cash management software to help them stay on top of finances. Treasury cash management includes acquiring a comprehensive picture of the cash inflows and outflows so that the cash flow situation can be understood, liquidity can be improved, and overall financial profitability can be increased.

Advantages of using automated solutions to improve cash management

• Automated bank statement item matching from the prior day’s records: Without requiring any manual interaction, the solution auto-reconciles transactions using standard and user-defined rules. It can also be used to manually match or correct any inconsistencies. Automated bank statement processing and reconciliation saves time, eliminates errors, and allows cash managers to focus on higher-value duties.
• Manage and optimize cash flows with accuracy: The financial situation and liquidity of a corporation can be better understood, allowing it to manage and distribute cash more accurately and confidently. Using automated reports, businesses can spend more time establishing financial plans and getting buy-in from key stakeholders.
• APIs and sFTP make it simple to integrate multiple data sources: A cloud-based cash management platform can interface effortlessly with all banks, ERPs, and independent market data sources to process files in all forms, including XML, BAI2, MT940, ISO20022, XLS, and CSV, eliminating the need to manually download data from portals. Transactions may be auto-classified by bank, account, area, and category, and then viewed in customizable templates. The user can also override or manually upload new data if necessary.
• Real-time visibility: Automated data collection and processing, which gives real-time information for decision-making, is one of the key features of the cash management system. Automated cash management analyzes cash in motion, deposited cash, and the level of capital reserves to ensure that a company is financially healthy. Open-banking APIs combine and standardize transaction data from different banks into a single, accessible, real-time dashboard, giving users immediate access to a full array of cash reporting tools.

Schedule a demo to learn more about the benefits of using the best cash flow management software.