What You Don't Know Can Hurt You: The Importance of Information and Access

07/01/2013

Twentieth century British Prime Minister Benjamin Disraeli once proffered, “the most successful man in life is the man who has the best information.” Centuries later, this pearl of wisdom still rings true, particularly as it relates to the business community. Timely and accurate information is critical to the treasury function and the ability of an organization to make fully informed business decisions.

When performance data around Accounts Payable (AP) and Accounts Receivable (AR) processes is lacking, it is more challenging for treasury professionals to effectively manage and optimize collection and disbursement activities. This in turn can adversely impact efforts to maximize working capital management. The reason for this lack of information can often be traced to insufficient or outdated IT systems or a shortage of centralized processes across divisions or departments. When information is kept in silos, the result can be inadequate visibility into a company’s overall cash position. Lacking an integrated view of data, treasury may miss important trends occurring within the business. In such a case, what you don’t know really can hurt your business.

Leave No Stone Unturned

By scrutinizing existing treasury processes and bringing an investigative approach that leaves no proverbial stone unturned, treasury can gain invaluable insights into AP and AR functions that will lead to a clear, end-toend picture of how cash is handled.

Such an in-depth examination should reveal which information is readily available and what is missing. An analysis of treasury processes, including ERP systems, can reveal the potential for improvement across the treasury function.

The Importance of Relevant Decision Support Capabilities

Gaining visibility into systems and processes is vital to treasury effectiveness and the ability to support working capital management objectives. Access to this information can provide relevant decision support capabilities that will ultimately help with the management of the business. With the right information in hand, various stakeholders will be empowered to make better decisions. For instance, operations professionals will be interested in knowing how much cash is flowing in and how much is being pushed out in order to better understand when activity levels are at their highest. Treasury professionals who manage liquidity will be interested in viewing information that provides a comprehensive view of liquidity positions in order to make more informed working capital management assessments.

Acquiring quick, concise views of treasury information, with the ability to drill down and see critical details, will enable treasury professionals to better understand what’s driving trends, both negative and positive, giving them the opportunity to become an even greater value-added partner to the organization’s management team.

Partner Internally and Externally to Get the Information You Need

Tapping into relevant information requires the development of important partnerships, both internally and externally. Treasury should work with IT to deploy systems that will deliver the valuable information needed to improve the overall efficiency of the treasury function. Banks should also be a vital part of this equation. Because banks typically are central to the transaction process, they are in a unique position to provide critical insights into AP and AR activities, including how well they are performing and where there is room for improvement.

It is crucial that treasury take advantage of all that banks have to offer when it comes to information. An effective bank should offer a state-of-the-art treasury workstation that will enable treasury to be as efficient as possible. Such a workstation should offer a wide range of functionality, including processes for payment initiation and in-depth reporting. Additional features, such as entitlement systems can provide flexibility in how treasury is able to delegate access to users. And notification sub-systems should not only allow treasury to choose how notifications are received – through email or SMS text – but also allow actions to be taken in response.

Another critical area is exception management. By centralizing exceptions through a single interface, treasury will be better able to manage exceptions from different work flows. Banks can play an important part in eliminating these silos of information.

As mobile technology and connectivity become an increasingly vital part of everyday business, treasury should look for a bank who can offer AP and AR capabilities accessible through mobile devices, such as smart phones and tablets. By integrating these activities into a single depository, treasury professionals gain greater access and visibility in the information they need – when they need it.

Adding Value to the Organization

In working with a bank to improve access to information and reporting, treasury can become uniquely prepared to enhance its processes. Fifth Third Bank customers can depend on a consultative approach to investigating information needs and the development of a comprehensive action plan to bringing a rich flow of data that will support critical decision making and planning. With this visibility, treasury can drill down and analyze its processes and structures, and ultimately take the steps necessary to improve working capital activities.

Clearly, information and reporting are vital to the treasury function. And by improving the ability to collect this information, treasury is better able to achieve its working capital objectives, while adding value to the organization.

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