It’s Budget Time! Don’t Forget to Budget for Treasury Management Solutions
Budgeting for Treasury Management

If yours is like many businesses, you’re knee-deep in the 2017 budgeting process right now. As you work on your business’ budget for next year, don’t forget to allocate some funds for treasury management solutions that can help you increase the efficiency of your finances and operations. Doing so will enable you to handle additional volume and thus grow your revenue without adding more staff.

“Increasing efficiency is always important and there is a wide range of treasury management solutions that can help you do this,” says Cadence Bank Executive Vice President Katrina King. “But there may be some front-end startup costs involved in implementing these solutions that you need to budget for.”

These are not just hard dollar costs, but also the cost of human capital, or your employees’ time. “By budgeting now for these financial and human capital costs, you’ll be able to implement cost-saving and revenue-boosting initiatives next year when you’re ready,” says King.

Integration and Automation

According to King, one of the biggest efficiency trends in treasury management today is integration — in particular, in the area of accounts receivable. An integrated approach to treasury and risk management will incorporate a wide range of payment, financial and operational solutions.

Data integration can be used to merge financial data stored within your bank’s systems with the data stored in your company’s internal accounting system. “This will enable you to automate and streamline many processes that are currently being performed manually,” says King. “Treasury management solutions from your bank can help you incorporate data into your internal systems while automating treasury management processes that are being done manually.”

A good example is receivables lockbox. This treasury management solution will help you streamline the process of posting, reporting receivables and deposits, and reconciling. King says that this will significantly reduce errors while freeing up employees to focus their time and effort on activities that help drive revenue.

It’s just as important to focus on efficient payables processing. With payables lockbox, your company can improve accounts payable efficiency, minimize delays in payment processing, and forecast your cash needs more accurately. “Getting payables lockbox set up isn’t cost-prohibitive financially, but you do need to set aside plenty of time for your AP and IT staff to get up and running with this solution,” says King.

According to King, a Cadence Bank client that recently started using payables lockbox determined that using the service has saved them approximately 40 hours per week. As a result, they have not had to hire one new full-time employee even as their company continues to grow.

In addition, remote lockbox enables your company to scan checks and remittance documents and send them to the bank, which will combine them with items received from other lockbox services. Items will then be processed, cleared and archived in a single database. 

Guarding Against Fraud

As you budget for treasury management solutions in 2017, don’t forget to plan for how you will guard against payment fraud. According to King, payment fraud risk exposure is significant today. “Therefore, fraud prevention should be part of the planning process any time your company is embarking upon a major treasury integration and automation initiative,” she says.

The best way to guard against payment fraud is to implement Positive Pay and ACH Positive Pay (for electronic payments). “These treasury management solutions will alert you to potentially fraudulent transactions before they can impact your company’s accounts,” King explains. 

With these solutions, pre-determined filters will trigger an alert when payments presented do not meet the criteria you’ve established. You then have the option to either pay the items or return them within a designated timeframe.

Also learn how one Florida Collection Agency improved deposit and posting accuracy, increased audit trail efficiency and reduced costs with our remote lockbox services

Cadence Bank offers a wide range of treasury management solutions that can help you increase efficiency, reduce costs, grow revenue and boost your bottom line in 2017. Contact a Cadence Bank Treasury Management representative for assistance as you budget for treasury management solutions to implement next year.

 

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This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

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