Remaining at the forefront of the ever-evolving innovation curve is imperative for ensuring the financial vitality of any organization. Despite this urgency, numerous treasury management departments rely on outdated data and manual processes, oblivious to the extensive ramifications of such practices. In a previous blog, I looked at the cost and resource savings companies can achieve through automating their basic treasury functions.

The consequences of the process and data challenges faced by treasury departments extend beyond initial perceptions. They encompass far-reaching and potentially costly implications that can significantly compromise operational efficiency and strategic decision-making. Recognizing and addressing these issues head-on is paramount to staying competitive and establishing a resilient foundation for sustained financial health and success.

The Crucial Challenges in Treasury Management

Before starting the journey towards a more modernized treasury department, it is essential to grasp the hurdles that the treasury team must overcome. A Global EuroFinance report titled “Digital Transformation of Treasury” outlines the most pressing challenges faced by treasury departments, providing a detailed and insightful view of the challenging landscape. This analysis is crucial for understanding the multifaceted barriers that hinder optimal treasury operations. The challenges identified in the report are not merely isolated obstacles but integral components that demand strategic consideration for any successful digital transformation initiative in treasury management. These challenges include:

Cash Flow Forecasting (61%): Accurately predicting cash flow is essential for treasury management. Errors in cash flow can lead to over-leveraging or sitting on excess cash, both of which carry their financial burdens.

Data Accuracy and Availability (59%): Treasury relies on data for everything, from investment decisions to risk assessments. If this data is inaccurate or inaccessible, it can have a domino effect on the entire organization. It increases the risk of making misinformed decisions that can lead to financial losses.

Optimizing Working Capital (41%): Managing working capital efficiently is a cornerstone of treasury operations. However, this task can be daunting without the correct data and tools. Poor working capital management results in missed opportunities to invest excess funds or secure financing for growth.

Manual Paper-Based Processes (40%): One of the most prevalent yet underestimated challenges is the reliance on manual and paper-based processes. These antiquated methods are time-consuming and error-prone. They consume valuable company resources that could be better utilized in strategic financial planning and analysis.

Systems Capability/Complexity (32%): The complexity of existing systems can hinder efficient financial operations. Treasury teams are burdened by the limitations and intricacies of these systems, slowing productivity and inhibiting the ability to respond swiftly to market dynamics.

Surprisingly, according to the same report, over half (56%) of these treasury departments play pivotal roles in their companies’ strategic shifts and business model changes. This figure escalates to a staggering 70% when focusing on North America alone. These challenges, experienced by most treasury departments, underscore the critical need for a shift in adopting modern, automated solutions.

The Costs of Outdated Data and Manual Processes

In broad terms, large organizations allocate around 32 cents for every $1,000 of revenue to treasury functions, while small and midsize organizations incur approximately 75% higher costs. The reliance on manual and outdated systems escalates these expenses. Moreover, these costs skyrocket when the treasury department engages in strategic decision-making using stale and obsolete data. Essentially, these costs include the following:

1. Poor Decision-Making: Outdated data undermines the ability to make well-informed decisions. Strategic shifts, mergers, acquisitions, or significant business decisions driven by inaccurate or old data can lead to costly missteps. An organization’s financial health is intricately tied to the quality of data guiding its strategic moves.

2. Overhead Costs: Maintaining manual, paper-based processes comes with a hidden cost – the need for additional employees. These employees are essential to manage and oversee these tasks. Their salaries and benefits add up, contributing to an organization’s overhead costs. Furthermore, manual processes often necessitate extra audit and compliance efforts, further driving up costs.

3. Missed Opportunities: When outdated data and manual processes bog down treasury departments, they often lack the agility to seize opportunities. They may miss out on favorable market conditions, potential investments, or efficient ways to optimize cash flow.

4. Compliance Risks: Relying on manual processes increases the likelihood of errors and heightens the risk of regulatory non-compliance. Compliance violations can result in hefty fines and legal costs, tarnishing a company’s reputation.

5. Competitive Disadvantage: In today’s fast-paced business environment, companies that embrace digital transformation and timely data utilization gain a competitive edge. Those lagging due to outdated data and manual processes risk falling behind the competition.

The cost of treasury decisions made on outdated data and manual processes is not limited to financial expenditures; it encompasses missed opportunities, poor decision-making, compliance risks, and competitive disadvantages. To avoid these costs, organizations must prioritize digital transformation and ensure that treasury departments can access timely and accurate data.

Are you looking to modernize your treasury operations?

OpenText can help. Processing more than 33 billion transactions annually for thousands of companies worldwide, OpenText’s dedicated Financial Services team is committed to creating efficiency in treasury operations. Do not hesitate to contact us for more information by using the contact form below.


If this information is helpful to you read our blog for more interesting and useful content, tips, and guidelines on similar topics. Contact the team of COMPUTER 2000 Bulgaria now if you have a specific question. Our specialists will be assisting you with your query. 

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