Treasury Management System Benefits and ROI

What are the benefits of using a treasury management system? How can a Return on Investment (“ROI”) for a treasury management system (TMS*) be calculated?

Top 7 Benefits of a Treasury Management System

Why would a company want to implement a treasury management system?

Seven top TMS benefits include:

  1. Instant cash and risk visibility
  2. Automate treasury processes
  3. Ensure regulatory compliance
  4. Enable best practices
  5. Enhance operational quality
  6. Reduce banking costs
  7. Realize on-demand reporting
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How to calculate a ROI for a TMS

Many CFOs and treasurers expect a return on investment (ROI) analysis when considering implementing a treasury management system. But a TMS ROI can be challenging to calculate because many important TMS benefits are qualitative. Financial Sciences has developed a comprehensive ROI calculation method that analytically incorporates intangible as well as savings benefits. Download our free whitepaper and learn how to calculate a TMS ROI that shows management the positive financial return on a TMS investment for your organization.

Need more information?
Read how to calculate an ROI for a treasury system here.

TMS benefits significantly contribute to a positive return on investment (ROI) for most medium to large companies. TMS benefits and their ROI impact are as follows:

Benefit Description Organizational ROI
Cash and Risk Visibility A TMS provides real-time visibility into current and forecasted cash positions, liquidity needs, financial positions, and financial risks and exposures. • Promotes effective use of cash

• Increased visibility reduces risk

• Improves ability to perform strategic planning and forecasting

Compliance and Best Practices A TMS promotes best practices including the adoption of superior operational practices, adherence to company policies and procedures, and conformance with current regulatory standards. • Ensure company correctly and dependably complies with applicable regulatory and accounting standards.

• Promotes the use of best practices.

Automation and Scalability Utilizing an integrated TMS, Treasury operates in an automated environment. All treasury activity – cash, assets, liabilities, derivatives, hedges, market data, and accounting – are processed in one data model, enterprise-wide. • Increases efficiency, decreases cost, improves quality

• Supports company growth and scalability

• Improves accuracy, response time, and productivity

• Improves “treasury customer service”

Risk Management A full function TMS provides embedded risk management allowing Treasury to proactively manage, monitor, and report on operational, financial, and credit risks, regardless of where these activities are performed around the globe. • Allows Treasury to proactively manage risk exposures and identify mitigation options rather than handling risk exposures after the fact.

• Enables visibility into policy and procedure compliance

Advanced Analytics By automating treasury’s core processes, a TMS increases ROI by providing treasury professionals the time and tools to perform high value added analysis activities, including supplier (e.g. bank and others) quality and cost performance comparisons, the development of payment options and financing strategies, financing cost comparisons, new market costs projections, etc. Such analyses are not feasible in a manual environment. • Promotes benchmarking and comparisons that lead to lower costs and the development of effective financing options

• Provides key performance indicators to promote continual improvement

• Enables Treasury to become a strategic advisor and servicer to the executive management and the corporate enterprise

• Provides tools to determine the best methods and instruments for financing, hedging and investing

*What is a Treasury Management System?

What is a treasury management system? A treasury management system (also known as a treasury and risk management system) is a software solution that automates and integrates all of a company’s core treasury functions including banking, cash and payments, forecasting and liquidity, investments and debt, hedging, risk and compliance, and financial reporting. Acronyms for a treasury management system include TMS, TWS, and ETMS.