Cash & Liquidity ManagementPaymentsSTP & StandardsA Guide to STP – Part 5: Think Big, Take Small Steps, and Move Fast

A Guide to STP - Part 5: Think Big, Take Small Steps, and Move Fast

In the previous articles in this series we looked at STP within treasury, extending
STP to your subsidiaries, and extending STP to your banks. In this final article
we will look at how you decide where you want to be, benchmark what you have
today, and take the first steps towards your goals.

What do you have? Where do you want to be?

If you are just one person managing a small number of placements and rollovers
each day, and making the odd foreign payment for the two or three subsidiaries
that you service, then the most efficient means of processing for you is probably
your Excel-based spreadsheets and a manually created paper trail. The volume
and variety of your business may simply not justify considerable effort in creating
an automated and efficient process.

At the other end of the scale, you might be responsible for a ten person treasury
operation servicing dozens of subsidiaries, executing a large number of deals
each day, managing in excess of a hundred bank accounts, and producing more
management reports than you ever thought possible. If you are managing this
environment using spreadsheets it is very easy to conclude that you can gain
significant benefit from the STP capabilities of an integrated treasury management

The more complicated reality is that most treasury managers are somewhere in
the middle. They will appreciate and understand that they can gain significant
benefit from the STP capabilities of an integrated treasury management system
and yet doing something about it never quite makes it to the top of the list
of priorities. Selecting and implementing a system always seems to be one or
two places behind the corporate tax project, the inter-company lending restructuring,
or the banking relationship review. It is very often the case that 30 per cent
– 60 per cent of treasury resources are consumed by administrative work,
multiple data entry, error correction, manual consolidation of spreadsheets
and manual communication with subsidiaries.

Some treasurers already have an integrated treasury management system capable
of providing their operations with STP but are not using its functionality to
its full extent. The system’s use as nothing more than a sophisticated
deal register may be due to loss of system skills and knowledge as employees
leave or move within the organisation, which coupled with the absence of training
for new team members, has resulted in the degeneration of what were once automated
processes Sadly this scenario is more common than anyone dares to admit.

Regardless of the position you identify for yourself, your first step is to
benchmark what you have today.

Benchmarking your current position

Many treasury system suppliers and treasury consultants will offer you a service
to benchmark your current performance against the results that can be achieved
with their products, This service is often called a ‘health-check’.

There are two key ingredients to this exercise – a little know-how and the
time to do it. Whether using outside resources or undertaking the task yourself,
the simplest way to understand where you are today is to perform a time and
materials study of your team’s daily work over a pre-defined period e.g.
one week. This analysis provides an initial indication of the time that can
be saved with the introduction of STP simply by summing up the time taken for
duplicate data entry and manual processes including creation of deal tickets
and confirmations, consolidation of spreadsheets, error correction, report creation,
recording of bank statement details, market rate capture and so on.

The time your team can save with efficient straight-through processing is easily
quantified. The other significant advantage, the secure controlled processing
of transactions, is much more difficult to quantify and only readers who have
first hand experience of the implications (and the possible cost) of a significant
processing mistake can begin to appreciate the importance of minimising operational

Think Big, Take Small Steps, and Move Fast

You have taken the first step in identifying some of the possibilities. Now
think big, take small steps, and move fast.

Think of the full potential of what can be achieved. Use the previous articles
in this series to outline all the central treasury, subsidiary, and bank-related
operations that can be automated and subject to STP in your treasury environment.

From the bigger picture of what can be achieved identify the areas of your
operations that can deliver the greatest benefits, most quickly. Typically,
this will include the routine administrative work that consumes most of your
team’s time.

Now move fast to implement automated processes across your treasury operation,
taking each task or business requirement one-by-one. The cumulative effect of
this approach will quickly free your team’s time to work on the next phase
or on the many other ‘urgent’ one-off treasury projects that may
arise. Moving fast will keep STP in your treasury at the top of your list of
priorities for the least amount of time necessary, leaving you and your treasury
team free to concentrate on more value-added activities in the future.

Whitepapers & Resources

Transaction Banking Survey 2019

Transaction Banking Survey 2019

TIS Sanction Screening Survey Report

Payments TIS Sanction Screening Survey Report

Enhancing your strategic position: Digitalization in Treasury

Payments Enhancing your strategic position: Digitalization in Treasury

Netting: An Immersive Guide to Global Reconciliation

Netting: An Immersive Guide to Global Reconciliation