Is It About Time to Upgrade Your Treasury Management Systems?

Keeping your treasury management system (TMS) up to date can save your financial organization time and money. It can also make it more flexible in its finances.  However, these benefits could only be maximized if the TMS itself is a good match for the business’s needs.

However, a business’s needs evolve over time and in response to external factors. Even if an organization selected great software 10 or even 5 years ago, chances are it may already need an update or a replacement. Most organizations operate in a dynamic environment. In this environment, much can change in a relatively short time. Therefore, it is important to do periodic evaluations of systems. This is especially critical for systems such as a treasury management solution.

If any of the five items below apply to you, it may be time to shop around for a better, more efficient treasury management system.

1. You’re Still Using an Onsite TMS

As Software as a Service (SaaS) options have become more ubiquitous and mature, the debate on whether “cloud” systems are better than self-hosted or on-site systems is now more or less settled. Today, the consensus is that the vast majority of organizations will reap greater benefits from cloud-based services than from traditional on-site systems. 

While on-site systems tend to offer banks and other financial institutions full control, they require the organization to maintain and update the IT infrastructure that supports them. In the case of treasury management solutions, the IT personnel involved also need to understand day-to-day banking and finance operations. Not being able to find the right people or invest in the correct technology can result in critical inefficiencies in the organization’s finances. It can also result in vulnerabilities.

With a cloud-based TMS, however, not only can organizations spend less to achieve better results, but they no longer need to go through a grueling hiring process for qualified finance IT specialists. If your current TMS is not cloud-based, you should seriously consider replacing it with one that is.

2. It’s Hard to Create Good Reports

Reporting functions are an often-overlooked aspect not just of treasury management systems but of enterprise resource planning (ERP) systems in general. However, good reporting is essential for data-driven decisions. Therefore, reporting functions need to be robust, accurate, and fully featured to be useful to an organization.

Additionally, some important decision-makers both inside and outside the organization may not have a deep background in finance or other esoteric fields. This means software that facilitates transparent, accurate, and easy-to-understand reporting is almost certainly a plus.

When it comes to report generation, older TMS systems may be more difficult to work with. They may lack the report-generation functions of newer software and may not be able to automatically pull data from other parts of the organization. This results in more tedious, error-prone reporting. As a result, the software’s utility is further reduced. If any of these are the case, you’re better off upgrading your TMS.

3. Your Treasury Management Solution Integrates Poorly With Other Systems

Unless your TMS is part of a larger ERP suite developed by a single vendor, there are no guarantees it can be smoothly integrated with other systems. 

While there are almost certainly ways to get most disparate systems to work together, there will likely be some kind of catch. These catches can include manual workarounds, dependence on third-party software, or the risk of serious glitches.

Serious integration issues also prevent the organization from implementing effective process automation, something that can cut costs while improving service levels. These integration problems can worsen as the organization begins handling higher volumes of transactions. As a result, this may lead to slowdowns and even customer service issues.

When this happens, the best option is either to swap out your TMS for something that integrates better with your other systems or to replace everything with an integrated suite of solutions from a single developer.

4. Your Treasury Management System Isn’t Saving You Enough Money

Finance costs can be a huge burden, particularly those related to banking service fees and foreign exchange costs. Contemporary treasury management systems are now far more complex than those developed just a generation ago. In fact, they often incorporate advanced AI capabilities to further increase the cost savings to organizations.

If your current TMS is not saving you money compared to your previous system, there may be an issue with how it is set up or managed. It’s also possible that it’s outdated or not a good fit for your organization. This may necessitate either major customization or a complete replacement.

5. You’re Having Trouble Meeting Finance Regulations

One major reason organizations invest in treasury management software is to make compliance with financial laws easier. However, meeting today’s increasingly complex finance compliance requirements is not always straightforward. This is especially true when you’re using a treasury management system that predates newer regulations. 

While new software won’t solve every compliance issue, it does move things in the right direction, especially as transaction volumes start to grow. If you’re working with a modern treasury management system at the core of your financial operations, it’s worth taking time to regularly reassess both your TMS and accounting tools to make sure they keep pace with evolving regulations.

With these red flags in mind, you should now have a better idea of whether your company needs to upgrade its treasury management system. Given that any chosen system may remain with the organization for years, this isn’t a decision to be made lightly.