What is Treasury Management and How Can My Business Benefit from It?

April 16, 2023

Strong business finance management is critical to success. However, handling the various financial management processes can be a complex endeavor. Perhaps your organization juggles multiple online bank accounts. Combining data from several financial portals can be a time-consuming and manual project. Internally, you might use valuable resources to produce the necessary infrastructure with spreadsheets or custom code. These multistep processes are prone to errors, and the complexity only increases as your business scales. And this is only one possible scenario.

This is where treasury management comes in. Treasury management provides framework, solutions, and tools in place for your organization so you can spend less time wrangling your financial process and more time using it to increase efficiency, reduce financial risk, and plan strategically for your business's future.

Read along for the basics on treasury management and how it might work for you.

What is Treasury Management?

Treasury management is a system of processes designed to streamline a business's financial assets and reduce risk. Services grouped into the treasury management bucket focus on optimizing business efficiency and liquidity (cash flow), while limiting financial, operational, and reputational risk.

What's key is that treasury management services maximize available resources. Instead of using more man-hours to handle your financial processes, you can lean on professionals, automations, and systems to do the heavy lifting for you. Wouldn't it feel good to finally decrease organizational costs or free up cash assets to put toward your company's primary goals?

Additionally, treasury services can give you enhanced reporting and analytical capabilities—which could offer the transparency needed for future planning. For instance, you could see the whole picture of your financial positions and risk exposure at a glance, while being able to drill down to individual transactions at the same time.

Lastly, treasury management services are scalable. So, no matter what your size, you can keep processing times small, protect against losses, and follow any critical guidelines necessary for your business to succeed.

What Services are Included in Treasury Management?

Individual businesses vary significantly in their treasury management needs. Also, if there are changes in your company or industry, the specific services you require may shift.

Fortunately, treasury management includes many systems to address a business's unique needs. Smaller companies may look for just a few processes to manage cash flow or produce valuable reports. Larger organizations may look for more comprehensive solutions to analyze large quantities of data, scale, and forecast effectively.

Four major areas exist in the arena of treasury management. Each sector contains a number of services that might benefit your business:

1. Cash management services: These services allow you to collect payments from checks received via mail or image capturing, as well as ACH debits; manage cash control through an online banking portal; and handle cash disbursement with same-day wire transfers, bulk payment options, and a corporate purchasing card.

2. Fraud prevention services: Verify ACH and check payments, automate alerts, control approval functions, and identify check discrepancies with fraud prevention services. You can also specify organizations authorized to withdraw funds and create rules that block predetermined transaction types.

3. Merchant services: You can easily accept electronic credit and debit card payments from major card providers with merchant services. And, you can set up your account to receive those payments electronically.

4. Payroll and HR services: Treasury management can also help you handle payroll and tax filings in all 50 states. Automate hiring processes and employee onboarding and create digital documents with tracking, organizational charts, and team directories.  

What are The Benefits of Treasury Management?

Now that you can better understand the power of treasury management services, it's time to figure out how you might apply them to the stage your business is in. Here's a breakdown of the robust selection of treasury management services you can enjoy, along with their benefits:

Boost Your Cash Management

Need to enhance your cash flow? Treasury management services' on-demand reporting tools, preset processes, and efficient use of cash can reduce expenses and increase business productivity. Not only that, digital access to multiple accounts yields a cohesive view of finances and valuable online tools—improving your account management.

And let's face it. Sending payments can sometimes be a thorn. A suite of cash disbursement services delivers same-day wire transfers, cost-effective bulk payments, and purchasing cards managed by an organization's corporate purchasing guidelines—easing the pressures on this part of your business.  

Prevent Fraud

One security breach in your operations could bring down your best-laid plans. Automated alerts, user-specified notifications, and payment verification methods allow organizations to spot suspicious activity in real time and rapidly take proactive countermeasures.

For instance, if there's a problem you can customize your system to block accounts and simplify account segregation rules, while filters can strengthen a business's control over account debits.

Collect and Control Your Cash More Seamlessly

A suite of tools for merchants can give you increased ease of receiving and managing payments. For instance, cash collection services offer a wide array of secure payment methods like electronic transfer, credit and debit card transactions, and physical and electronically deposited checks. The result? Maximized opportunities for sales and rapid electronic deposits.

Need audit control? Detailed logs and transaction registers provide a complete audit trail for reference.  

Which Treasury Management Solution is Right for You?

Your business may already handle some treasury management processes internally. And many of those may already be working for you. But it may be time for a different approach. Especially if your organization is butting up against bottlenecks—maybe a slow system for payment processing or a lengthy, manual reporting process? Or maybe your team is dedicating too much time to data manipulation instead of your company's mission?

This could mean that you've outgrown your internal options for treasury management or require new services as you expand. A financial organization with a comprehensive treasury management department can provide dedicated professionals, treasury management proficiencies, and powerful services you might not be equipped to provide in-house.

But each business is unique. And, ultimately, the services your organization needs depend on your goals. The good news is, treasury management can be customized to form a comprehensive solution specifically for your business.

Connect with a knowledgeable expert at City National Bank of Florida to determine the right treasury management products and solutions that will serve your individual needs

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