When it comes to the fundamentals of tracking and forecasting cash inflows and outflows, many organizations have turned directly to spreadsheets as a convenient way to get started.

Spreadsheets may solve your basic needs, but things can quickly become overwhelming as you try to create a scalable architecture to accommodate multiple accounts from various business units, each of which needs multiple line items to capture and summarize inflows and outflows and to monitor cash movements between accounts. Columns are also required to track every banking day of the year. Managing multiple cells, links, and tabs leads to confusion and wasted time fixing the inevitable errors.

Spreadsheets are easy, but they are less effective when bringing data together from multiple sources and locations. They also lack security. Bank account numbers, average balances, major accounts, even payment information can easily be skimmed from just one file. Think about what could happen if the wrong person had access to your daily cash and forecast file!

Spreadsheets also have no controls. Now that we know they contain sensitive information, how do you lock down who has access to them? Where should they reside on a server? What if a team member only needs access to the activity of one business unit on the spreadsheet? What if the spreadsheet becomes corrupt or even deleted by accident?

Spreadsheets have no audit trails. You’ll never know who or why an amount in a cell was changed or deleted. Was it a user error or an attempt to cover up fraud? Discovering where the change occurred over multiple periods can be time-consuming and frustrating.

With Spreadsheets, what you see is what you get. Extracting value, analytics, and KPI’s from the data means creating more summary schedules with links to multiple cells. Maintaining the spreadsheet means managing multiple cells, links, and tabs. Populating data, maintaining data, and extracting data can quickly become a job unto itself.

Increasing Productivity

With a TMS like Kyriba, you have a one-stop-shop to connect and house all cash transactions with multiple ways to slice and dice and graphically view the information. Reporting can be formatted, automated, and delivered to target audiences. This archive of cash information that is sourced from your ERP and Bank Activity is what populates your data set and acts as the starting point for your analysis of cash flow and risk, cash reconciliations, reporting, and forecasting.

Improving Visibility

With a Treasury Management System (TMS), improved cash visibility leads to better cash management, planning, forecasting, and decision making. Greater visibility means better monitoring of balances and audit trails. This allows your team to see unexpected transactions, defend against potential fraud, understand who initiated or approved a transaction, and protect cash from currency/interest rate volatility in real-time.

Forecasting is made as easy as spreadsheets. Data is automatically integrated from your ERP and reconciled with bank transactions as they occur. Loading forecasts from multiple sources into the system means you can easily reconcile differences in forecasts versus actual and compare year-over-year transactions.

With improved cash visibility for the current day and your extended forecast, you can deploy idle cash into longer-term investments, reduce debt, or have the confidence to capture early payment supplier discounts.

Since a TMS can segment transactions and route them to the proper GL, you’ll be able to eliminate dedicated bank accounts that were used to keep transactions separated for ease of accounting and consolidate the transactions into one bank account. Now your staff accountants can easily reconcile and post to the general ledger since the bank transactions have already been routed to the proper GL pending approval. This can help reduce duplicative bank accounts and lower bank fees through volume pricing.

Intercompany transactions and the respective interest, withholding, and transfer price mark-up can be tracked for both counterparties through the TMS while the In-house Banking module allows you to avoid borrowing from the bank by netting your unutilized cash balances which can then be used as a funding source to make cash disbursements.

With Bank Fee Analysis, you’ll also be able to compare your bank fees across institutions to quickly determine the best rates between them and if there are any transaction errors. This can be helpful for negotiating fees, routing transactions to the most competitive bank, and determining how to shift transaction types to lower bank fees. Through Bank Account Management You’ll also be able to manage your signing authorities and access to banking services through this module and make changes through the system to the bank with a simple instruction to add or delete a person’s authority.

Security and controls are robust and standard with most Treasury Management Systems. Access through various authorities, approvals, and spend limits within specific modules can be customized by what information a user needs access to based on responsibilities and tasks. Supplier and Customer counterparty data set up will be scanned against blacklists and OFAC information to catch bad actors before a payment ever goes out. The system also verifies that counterparty banking instructions are correct with the respective banking institution. Data transferred between the user, the TMS, and any counterparty is encrypted for security purposes and automated confirmations are standard. With the confidence of a secure platform that cross-checks counterparty information and flags suspicious transactions, issuing payments through a TMS regardless of payment method and currency is an optimal solution for creating an In-House payment factory.

Conclusion

You Have outgrown spreadsheets when you:

Spend too much time fixing them

Need security, audit, and controls for your cash and risk management data

Need automated reporting