Key Tips for Choosing Your Treasury Management System Vendor

Introduction

Effective cash flow management and forecasting are critical aspects of running a successful business. Without proper cash flow management, businesses can struggle to maintain financial stability and may even face financial risks, such as bankruptcy. To navigate these challenges many businesses turn to treasury technology vendors to help them manage their finances by leveraging the right tools and solutions.

Selecting the right cash flow and forecasting software vendor is essential for any business looking to optimize its cash flow. However, with so many treasury workstation vendors available, determining the best-fit vendor for your business can take time and effort. 

In this blog, we will help you determine how to select the right treasury solution for your business and what are the five crucial steps to identify and screen treasury software vendors.

Finding the Right Software is Crucial for a Successful Implementation

Choosing the right treasury software is essential for organizations to efficiently manage their financial operations. The right software enhances cash flow visibility, ensures compliance with regulatory requirements, and provides robust tools for risk management. It supports strategic decision-making and optimizes financial performance, leading to overall organizational success. A successful implementation comes down to choosing the right treasury software and solution provider. Here are four tips for choosing the best-fit treasury technology:

1. Plan a strategic vision

   • Build the vision by identifying:
     • Highly manual and error-prone processes.
     • The amount of time required to execute the tasks.
     • The tools and technology that are currently used to perform the tasks.
     • The gaps in the desired outcome versus what is currently being achieved.
     • The pain points that the teams face concerning the treasury processes
     • The functions that can be automated.
   • Align the strategic vision with the company’s goals and requirements.

2. Identify all the stakeholders

   • Stakeholders involved should encompass a larger group that extends beyond the treasury team.
   • A simple way to identify the stakeholders is to involve all members who provide data inputs required for treasury processes or consume data generated from treasury processes.
   • Some of the stakeholders that should be involved are accounting teams, IT, finance, accounts payable, and accounts receivables teams.
   • All The stakeholders involved should provide a list of what they desire from the treasury management system. This helps to determine the project scope.
   • The requirements identified then should be categorized and prioritized.

3. Determine the system requirements

   • Understand the requirements on a high level, such as:
     • Time savings
     • Return on investments (ROI)
     • Seamless integration with banks, ERPs, TMS, and other data sources
     • Automated data gathering
     • Automated cash forecasting
     • Increased forecast accuracy
     • Hedging capabilities
   • Prioritize the requirements based on their importance.
   • Identify the benchmark against which the project’s success will be measured. 
   • Evaluate the technology options for the prioritized requirements.
   • To evaluate scalability also decide on the current need vs. future needs.

4. Draft a general timeline for execution

   • Create a reasonable timeline for the project implementation
   • Decide if the procurement team should be involved to help with the selection or negotiation.
   • Determine if the IT team’s involvement is required to validate technologies.
   • Identify the people involved in budget approval.

5 Crucial Steps to Identifying Treasury Software Vendors for Your Enterprise

The end goal for technology evaluation is to select a system that meets the treasury requirements. Organizations at this stage should do thorough due diligence on the treasury management system vendors present in the market. Here is a 5-step framework that can help you streamline your vendor selection strategy:

1. 1. 
      

      Cast a wide net

      
      

Research the latest technology options in the market and features provided by vendors by browsing through Google and LinkedIn or by attending conferences (both online and offline). Reach out to the existing users to understand their experience with the product.

1. 1. 
      

      Screen the vendors

      
      

Screen vendors by utilizing online technology guides such as the Association of Finance Professionals (AFP), Strategic Treasury, Bob’s Guide, or other treasury technology resources. Additionally, they should also check for vendor evaluation reports that are published by top analysts, such as IDC, Gartner, etc. At this stage, organizations need to look into the vendors’ track records, their areas of expertise, and their industry experience.

1. 1. 
      

      Browse vendor websites

      
      

Next organizations should visit vendor websites to gather product collateral and read client stories for a better understanding of product capabilities. At this stage, organizations should look at their objectives and identify which vendor offerings best suit their requirements.

1. 1. 
      

      Set up an initial call or a brief demo

      
      

During the call, try to understand the genuineness of the solution and the solution provider. Further, gather information from the vendors on the most recent technology, market trends, and product changes.

A few items should be kept on hand before the demo call, such as:

1. 1. • Current company landscape and processes
      • Current challenges
      • Priorities, including the ‘must-haves’ and ‘extras’
      • Planned budget
      • General timelines
      • Buying plan
   2. 
      

      Map the pain points

      
      

Analyze your enterprise’s key cash flow and cash forecasting pain points to understand how effectively the cash flow forecasting and cash management software vendor’s solutions address these challenges. Also, analyze how the solution implementation will impact and enhance the business processes and the likely ROI that can be expected.

Shortlisting Treasury Solution Vendors

After the demo call, the vendors should be evaluated based on product features, experience, in-depth research, and success stories. You should prioritize vendors that:

• Offers a superior product to the competition.
• Is responsive to client needs and requirements.
• Has professional and helpful sales representatives.
• Has positive customer feedback.
• There is a fit between the requirements and the product offerings. 

When assessing the product, the client should not only focus on the look/feel of the product but prioritize the effectiveness of the product and the value it provides. This can be done by evaluating:

• How does the product function?
• How intuitive is the product?
• How user-friendly is the product?
• How scalable is the product?
• Which technologies is the product utilizing? 
• How safe and secure is the product?

Finally, based on the above criteria, the client must shortlist a few vendors (not more than five vendors) for a detailed demo, RFP, or workshop to zero in on the best-fit treasury solution provider. The RFP process helps you choose the best-fit treasury solutions for your enterprise.

What is an RFP?

A Request for Proposal (RFP) is a business document that: 

• Announce a project.
• Defines the project scope and objectives. 
• Invites eligible contractors to submit bids to finish it.

They are preferred by most corporations globally and are best utilized to objectively compare answers and select the most suitable solution vendor while choosing business software. 

How is RFP used in Vendor Selection?

The RFP document’s primary objective is to assist clients in selecting the best-fit vendor to source the required business software. When a project is anticipated to take months or years, an RFP is crucial in selecting a good technology partner for your treasury management system.

RFP ensures that all potential vendors are evaluated based on the same criteria, providing a level playing field for all candidates. The RFP process also allows for transparency and fairness in the selection process, which is crucial to building trust between you and your technology partner, especially for crucial projects involving the implementation of treasury solutions, such as cash flow management software and cash flow forecasting software.

What are the Steps Involved in RFP?

The request for proposal process consists of four sections: documentation, analytics, on-site demo, and final selection process. Let’s take a look at these in detail.

Step 1: Documentation

Documentation is the first step in initiating the RFP process while choosing treasury software solutions, be it cash forecasting software or cash flow management software. Here’s a list of action items for you to consider while sending out the documentation to corporate treasury software vendors:

• Draft a well-structured document that is dependent on the needs of your company.
• Add questions unique to your business type and business goals to ensure that their responses are tailored to your requirements.
• Sort your questions into categories and align them to the scorecard.
• Include the expected pricing scheme for the solution in the documentation.
• Compile all the data that could be useful for the vendors and send it out along with the RFP to avoid frequent back and forth.
• Mention the deadline in the email and the front page of RFPs.

Step 2: Analytics

Analysis of cash management and cash flow forecasting software vendors can be done with the help of a vendor evaluation scorecard. The following are a few things to consider while creating a scorecard for business cash forecasting and cash flow management software:

• Create the scorecard in a spreadsheet to save time.
• Align the scorecard to the questionnaire that is sent out.
• Assign weights to the features to help with the decision-making.
• Include pricing as a weighted category.

The following things should be considered after getting back responses from the treasury software solutions vendors:

• Score the documents on a scale of 1 to 5 for each question.
• Analyze the response of the vendors in terms of their response to the requirements as follows:

1. The requirement cannot be met.
2. The requirement can be met by partnering with a 3rd party solution provider..
3. The requirement can be met with a future release of the software.
4. The requirement can be met via customization.
5. The requirement is readily met.

• Take notes while evaluating the vendors
• Keep a list of follow-up questions for the vendors based on their responses
• Filter vendors based on the preferences and functionality fit

Step 3: On-site demo

An on-site or extended demo is helpful to get further detailed insight about the product as well as get more clarity on the product offerings, implementation, and other key considerations. For an on-site demo, the following steps need to be ensured:

• Inform the vendors that the demo should address and focus on specific requirements that have been listed and identified. 
• Record the sessions.
• Invite all the stakeholders involved in the process, including the IT and procurement team.

Step 4: Final selection process

The final stage for corporate treasury software solutions vendor selection is the contracting and negotiating phase. This stage is where the vendors and the users agree upon the terms to ensure a successful treasury software solution buy-in.

Implementing a New Treasury Solution

Over the past decade, the rapid pace of digitalization has introduced a range of sophisticated tools that facilitate treasury operations by exercising more robust governance into cash flows, providing better analysis, and enabling informed decision-making. AI-enabled treasury solutions are now being implemented into treasury processes for the following reasons:

• Process automation and standardization
• Optimized working capital and cash management automation
• Straight-through processing environment
• Enhanced reporting and strategic planning

However, implementing a new treasury solution can be challenging and time-consuming. Treasury management system implementation projects can take months or years to complete, and in that timeframe, the resources often get implementation fatigue as timelines get pushed and costs increase. As a result, the cost-benefit ratio gets lowered when the software doesn’t live up to expectations. Hence, the team needs to create an implementation plan by:

• Documenting current-state processes: Documenting current-state processes involves a thorough analysis of existing workflows, systems, and procedures. This step helps in understanding the current operational landscape, identifying inefficiencies, and establishing a baseline for improvements. Detailed documentation ensures clarity and provides a reference point for future changes.
• Preparing a future-state vision: Preparing a future-state vision entails defining the desired end state for the organization. This involves envisioning improved processes, advanced technologies, and optimized workflows. A clear future-state vision provides direction and aligns stakeholders on common goals, fostering a unified approach toward transformation.
• Identifying objectives and creating a prioritized roadmap entailing how to reach the desired end state: Identifying objectives involves setting specific, measurable goals that align with the future-state vision. Creating a prioritized roadmap outlines the steps needed to achieve these objectives, detailing the sequence of initiatives and their relative importance. This structured approach ensures a focused and efficient journey toward the desired end state.

The Software You Choose Defines the Future of Your Enterprise

To stay competitive and achieve growth, you need to make the most of your enterprise’s cash resources while minimizing risk exposure. This is where automation and AI-powered tools can make a significant impact. Leveraging the right next-gen finance platform that continuously learns from your ever-changing finance and accounting transaction data is your first step to transforming your treasury operations. It predicts business outcomes through proactive decision-making for improved working capital impact, enhanced customer experience, and accurate cash forecasting.

HighRadius offers a cloud-based Treasury and Risk Suite that streamlines and automates treasury operations, including cash forecasting, cash management, and treasury payments. We have empowered the world’s leading companies, like Danone, HNTB, Harris, and Konica Minolta, to optimize their cash forecasting accuracy, make decisions faster with real-time bank data, and reduce bank fees.

It offers pre-built connectors with the major ERPs and banks to reduce the IT effort while setting up the integration. Additionally, as a technology partner, HighRadius provides a dedicated implementation team to do most of the heavy lifting. In general, the solution is designed to be user-friendly and requires minimal IT involvement once it is set up and running. With the HighRadius Treasury suite, you not only reduce risk, improve accuracy, and get a clear picture of your cash flow with unified comprehensive reporting, but also transform the way you manage treasury, especially amid market volatilities.

With seamless plug-and-play integration into ERPs using real-time APIs and Hex (SFTP) connectors, along with pre-built modules and industry-specific best practices, customers can deploy HighRadius treasury solutions remotely with ease, reducing all IT dependencies. A cutting-edge cloud solution designed for cash forecasting features custom forecast models that replicate familiar spreadsheet interfaces. Treasurers can build or customize their own models, and our solution will select the best-fitting forecasting model from 100 pre-built options to suit your needs.

HighRadius Speed to Value methodology guarantees swift implementation and ROI realization within 3 to 6 months, setting an industry benchmark. Our dedicated implementation team works closely with you to ensure a smooth transition with minimal disruption to your current process.

An enterprise treasury cash management software prioritizes data security and privacy, adhering to stringent industry standards such as GDPR, ISO, PCI DSS, HIPAA, and SOC. HighRadius employs robust encryption protocols and role-based access controls to safeguard your sensitive financial data, ensuring the utmost confidentiality and compliance with regulatory requirements. 

HighRadius treasury solutions integrate with most ERP systems, including SAP, Oracle, NetSuite, Sage Intacct, Workday, and Microsoft Dynamics, among others. This integration ensures smooth data exchange between your ERP and cash management tools, allowing for accurate financial reporting and streamlined cash management processes without disrupting your existing workflows.

HighRadius treasury solutions seamlessly integrate with a wide range of banks and financial institutions. Its flexible integration capabilities ensure that payment information from all the industry-standard bank payment files and formats is captured, providing real-time visibility and control over your financial transactions and balances.

FAQs

1. How to implement a treasury management system?

Implementing a treasury management system involves several steps. First, assess your organization’s needs and set clear objectives. Next, select the right TMS that fits those needs. Plan the implementation process meticulously, configure the system, integrate it with existing platforms, and conduct thorough testing.

2. How long does it take for treasury management system implementation?

Implementing a treasury management system typically takes 3-9 months. The duration depends on the organization’s complexity, customization requirements, integration needs, and user training. Effective project management and clear goals can streamline the process, ensuring a smoother and timely implementation.

3. What is treasury implementation?

Treasury implementation refers to the process of setting up a treasury management system (TMS). This includes selecting the appropriate software, configuring it to meet organizational needs, integrating it with existing systems, and optimizing it to manage financial operations such as cash flow, investments, and risk management.

4. What is the treasury management process?

The treasury management process involves managing a company’s liquidity, investments, and financial risks. Key activities include cash management, forecasting, investment handling, debt management, risk assessment, and ensuring regulatory compliance to maintain financial stability and optimize resource use.

5. What is a treasury ERP system?

A treasury ERP (Enterprise Resource Planning) system integrates treasury functions with other business processes. It manages cash flow, investments, risk, and financial transactions, providing a unified view of financial operations and supporting strategic decision-making across the organization.

6. What is the difference between ERP and Treasury Management System?

ERP systems integrate various business functions like finance, HR, and supply chain, offering a broad operational view. In contrast, a Treasury Management System (TMS) specializes in managing cash flow, liquidity, and financial risks, providing detailed treasury-specific functionalities and insights.

7. What is the treasury management approach?

The treasury management approach involves strategic planning to optimize liquidity, manage cash flow, mitigate financial risks, and ensure effective use of resources. It includes setting policies, implementing processes, and utilizing tools to enhance financial stability and operational efficiency.