Treasury automation was on the agenda at a roundtable discussion hosted by UK-based fintech provider AccessPay last week. The company has published a report on the rising demand for automation in finance departments, among the findings of which is a trend towards decreased reliance on the spreadsheet as a treasury management tool.
Treasury professionals from four major companies – all AccessPay clients – attended the discussion and talked about the challenges they have faced when implementing change within their organizations, the opportunities that the shift towards automation brings about, and the real-time benefits of automation for treasury departments operating on a global scale.
Not if, but when
“Treasury automation is coming. It’s undeniable, and to ignore it is to be left behind.” said James Higgins, product director at AccessPay. “Yet [some treasurers] are still working with tools and in ways that are from a previous world.”
However, Higgins pointed out, it is not just within organizations themselves that there can sometimes be resistance to change – many of the financial software solutions available can make it difficult to become enthusiastic about the possibilities being opened up by technology.
“Banking portals are an example of where things are supposed to be digital but they’re inefficient, they’re slow, they’re cumbersome,” he commented. “Having used online banking portals in the business world, there’s no way I would accept that in my personal life as a consumer.
“So our starting point was that everything we do in this brave new world of treasury automation has to involve easy set-up, it has to involve real-time information and it has to involve a buying decision that is de-risked because you can [introduce new systems] on an incremental basis.
You can automate treasury such that most of your stakeholders don’t really know that it is happening
“Our solution is to work on automating processes like reconciliation and then freeing up people to actually focus on analytical tasks which are of value, such as enhancing cash flow forecasting.
“We work on 80-20 principle. If corporate treasury are spending 80% of their day gathering qualifying data and 20% then analyzing it, our solution flips that on its head: no more than 20% gathering data and 80% using that data to make decisions.
“You can automate treasury such that most of your stakeholders don’t really know that it is happening,” he added.
The shock of the new
Martin Le-May, contract project manager at Eversheds Law Firm, observed that one of the lingering appeals of traditional tools such as spreadsheets lies in their familiarity across different parts of a business. “There is this perception that what we’ve got with the Excel spreadsheet is very, very familiar,” he said.
“It’s very comfortable – it’s almost like a piece of paper, whereas a computer system is not malleable. We’ve got this idea that someone can actually drag and drop something in an Excel spreadsheet. But people can perceive [that other software solutions] are actually very fixed, very rigid. I think that’s one huge issue that we face.”
Le-May also brought up the issue of risk. When there are significant transactions being moved around, he observed, “that’s a lot of money to be risking on something that’s automated – that’s the perception. Overcoming some of those issues with technology is frightening.”
“I think the major business cases [for automation] revolve around either saving heads, or saving interest payments on overdrafts. One of the pillars of that business case is just starting to feel a bit shakey.”
Maria Elkin, group treasurer at Lloyd’s Register, discussed the challenges of operating within a global context and the ways in which automation can help make processes more efficient: “We are quite fragmented, and in some places I will probably just have an administrator in a given country, and therefore giving them a banking solution is paramount,” she said.
“My driving force was how to become bank-agnostic – how to not be reliant on any one bank to provide me with my banking systems. At the moment I carry around a bagful of fobs that I have to give to different people for access to different systems. Even where we do have one ‘local bank’, across our Asia business, it’s still not one log-in, one system, one process, because of all the different regulations.
My priority as a treasurer is minimizing the risk and exposure around my banking relationships and being too reliant on one bank
“From our perspective, [automation] is all about giving the teams on the ground straight-through processing, being able to access their data, put it into the ERP system and process it,” she added. “It simplifies their job so they can do other things than constantly keying in information. Also, you then have that control and visibility of payments – to be able to look at cash flow forecasting and reconciliation.
“My priority as a treasurer is minimizing the risk and exposure around my banking relationships and being too reliant on one bank, and being able to give my team the tools they need to make their jobs easier.”
Andrea Feay, treasury operations manager at NSG Group, concurred on the benefits of becoming ‘bank-agnostic’ across a large, somewhat fragmented organization. “We are trying to automate quite a lot of things at the same time,” she said. “We want to go bank-agnostic – we’re in a lot of countries, and wanted to centralize [treasury functions].”
The business case
When it came to making a business case for automation and convincing colleagues of the benefits, said Feay, “cost was a major blocker when we started”.
Like Le-May, she also raised the issue of familiarity with legacy systems being a hurdle when introducing new technology: “We also really struggled with some of the lack of understanding in the business. People can be very suspicious of anything they cannot type into and find out what’s wrong. When you’ve got people with 20 years’ experience of using an ERP or a spreadsheet, and suddenly you introduce an automated system and the numbers aren’t visible, people are like, ‘what am I going to do?’
“Treasury teams are very keen on automation – we want to have the 20-80 [division of time mentioned above] rather than 80-20. But often businesses aren’t. I’ve been surprised at how many arguments people can raise to not automate.”
Feay added that one of the main benefits of automation is around saving money lost through human error, or even hacking: “The big driver has been the avoidance of the risk by eliminating manual processes – that’s been quite a good economic argument [for automation],” she said.
Karen Fagan, head of treasury operations at ITV, talked about the ‘real-time’ benefits of automation. “As well as being a group of channels, ITV is also a producer,” she pointed out. “We’re present in 13 countries – and every production will have its own bank account, so we have bank accounts across the globe. In the UK, as the broadcasting business, we have things like straight-through processing and automatic reconciliation systems.
“But in the rest of the globe, we’ve acquired lots of different production companies, with their own production accountants, their own bank accounts, their own processes – and they all need a buffer of cash, which adds up.
“Previously, with spreadsheets, it took a long time. But now we’ve got them automatically feeding into our AccessPay BankSense system, so every day we can see how much cash they have, and don’t have to wait till the end of the month to see a chart.
“With the use of this real-time data, we can save on charges and interest – that’s three-times paid for this solution. That’s a really big benefit. To be able to have access to meaningful data is really important.
To be able to have access to meaningful data is really important
“The biggest challenge for us is definitely the amount of time it can take to get data from spreadsheets. [Automation] saves us a lot of time, which really adds value,” she concluded.
Whether the humble spreadsheet is still a viable option within treasury departments will, inevitably, depend on the circumstances of any individual organization – and predictions of its demise may yet be premature.
What is clear, however, is that as the role of the treasurer expands and evolves, automation has a huge – and increasingly important – role to play in improving efficiencies, adding value and allowing treasurers to spend more time on some of the more rewarding aspects of their role.
The full ‘Calling time on the spreadsheet’ report can be downloaded here.