The banking industry is not known for using plain English, so to help explain Treasury Management, sometimes I’ll use the term, “cash management” interchangeably. The reality is that cash management is only a small, but important, piece of Treasury Management. A sophisticated Treasury Management department within a bank offers a full suite of solutions that help your business way beyond managing your daily cash.

Treasury Management Helps You Get More Done

Above all, a Treasury Management department should aim to help clients improve efficiency. This should not mean eliminating positions. Consider how you could be using your staff for more impactful responsibilities than running to the bank and making deposits. Time is our most valuable commodity, and our Treasury Management solutions can allow you to make the absolute best use of the time you — and your employees — have.

Hiring has been difficult for a few years and doesn’t seem to be getting easier, so automating and outsourcing some back-office financial processes through an experienced Treasury Management team makes fiscal sense. You’re making the most of your resources when you work with a reliable bank team that’s always on the lookout for cutting-edge solutions that make sense to support your business and its opportunities.

Four Subsets of Treasury Management

A full-service Treasury Management solution suite addresses four different areas in your business: information reporting, cash or liquidity management, payables optimization, and fraud and risk mitigation. Experienced bank Treasury Management experts consult with leaders in your business to help implement the best Treasury Management strategy, taking into account your industry, competitors, short- and long-term goals, cash needs, and more.

TM Solution Suite

Who Needs Treasury Management?

The short answer is that almost all businesses of all sizes and in all industries can benefit from Treasury Management services. It doesn’t matter if you’re borrowing funds or not — if you have payables and receivables, even if you don’t have a lot of liquidity, you can still maximize your cash cycle and protect your payables and receivables from fraud. What you’re doing on a daily basis with your operating cash can impact your business by tens of thousands of dollars over the span of several months.

To explain that point further, because some people think their businesses are “too small” for Treasury Management, it’s important to note even our small nonprofit clients often find Treasury Management services crucial because their resources are protected and maximized whenever possible.

In fact, large companies often have their own internal Treasury Management functions, so small and medium-sized businesses tend to get the most out of partnering with a bank that has a sophisticated Treasury Management department.

Managing Liquidity To Your Best Advantage

Treasury Management teams with depth of experience have many conversations with clients around liquidity management and collecting receivables as quickly, safely, and efficiently as possible. Under the same umbrella, those discussions include building a strategy to hold on to your business’s dollars as long as possible in the most efficient way.

With all the variables, you can imagine the needs and plans vary between businesses greatly. Are you receiving checks? If so, how are you getting them to the bank? Do you want checks coming to your office? Can they go directly to the bank, knowing every check is deposited that day within an hour of receiving it? There are several ways to speed up availability of funds and improve the security of that process, as well.

Treasury Management Helps Stop Fraud

Fraud loss across the nation is staggering, and fraud is always changing, so it’s important to stay on top the potential vulnerabilities within your organization. Many business leaders counter this with, “I’ve got great IT capabilities with several firewalls.” That’s wonderful and you really need to have those safeguards, but they don’t address most of the fraud we see in businesses that manipulates human vulnerability.

Treasury Management solutions, like Positive Pay, Account Reconciliation, ACH Positive Pay, and SecurLOCKTM Equip, help you stay on top of fraud attempts that can make it as far as your bank. An experienced Treasury Management team will help educate you about how these solutions work in combination with your team’s vigilance — and best practices like dual controls and daily account reconciliation — to combat common fraud attempts. 

Your Treasury Management team should be conducting proactive, annual reviews with you, if not more frequently, and discussing fraud prevention regularly, as well. In our bank, we think of them like an annual health check-up on how your Treasury Management systems are working for your business. We uncover any changes in your business that might require a strategy shift. We consider it time well spent with our clients as a resource to identify where we might be able to help prevent more risk or operate more smoothly.

Does Treasury Management Really Matter?

A lot of business owners and top-level leaders are pulled in many directions, and they sometimes counter with, “Why fix what’s not broken. What’s my ROI on an hour spent talking about our Treasury Management?” I happen to have a great example of that. We often uncover ways to help that you’ll wish you would have discovered a lot earlier.

Recently, I had a conversation with a credit-intensive client who had never even talked with anyone in Treasury Management at their previous bank . At that hour-long conversation, we uncovered a lot of ways to help. They had a significant amount of money spread out among several accounts across many banks and a large line of credit. We were able to consolidate those funds and set up an automated line of credit sweep. That one-hour conversation really opened their eyes that they could save tens of thousands of dollars by maximizing their liquidity.

Final Treasury Management Tips

Running your business is your focus, so it’s often difficult to know what you might be missing at your bank. At a minimum, you should rely on your banker to help you stay on top of the latest fraud prevention and technology so you can stay focused on what matters most. If your banker isn’t proactively talking to you about time-saving and money-saving solutions, ask. And if they don’t get it, give us a call.

Make sure to check out our podcast episode, “What is Treasury Management?” for more about how Treasury Management services help businesses.