TL;DR – Key takeaways
- Cash visibility has always been a time-consuming treasury function
- Cash management will only get harder now that businesses are adopting a multi-banking approach
- When looking for treasury management solutions, finance teams face a classic Goldilocks problem
- Most teams manage their cash in spreadsheets, which is manual and error-prone
- Traditional treasury management systems are too complex and slow to implement
- Teams need a simple, all-in-one interface where they can gain visibility, monitor accounts, and transfer funds all in one place – no engineering required
Cash visibility has always been a treasury management challenge
Visibility has always been a top problem for treasury management.
According to PwC, 26% of global cash is not visible to corporate treasury on a daily basis, and Deloitte’s most recent corporate treasury survey found that visibility into into cash and financial risk exposures is the #1 and most time-consuming treasury challenge that organizations face.
Cash management only gets harder with multi-banking
Venture capital firm NFX surveyed 870 companies and found that prior to the collapse of Silicon Valley Bank, the majority of companies only had one bank account.
One major reason why finance teams centralized their cash in one place? They wanted to avoid the sheer complexity of integrating multiple banking systems into their ERP, managing cashflows in different operational accounts, and having to manage separate manual log-ins and permissions.
But since the collapse of SVB, treasury management is now at the top of every CFO’s priority list, and the majority of companies have diversified their banking to two or more accounts.
This new multi-banking approach makes maintaining visibility into cash positions and control over cash management that much more challenging.
Traditional treasury management solutions fall short
Finance teams currently have two main cash management solutions to choose from, and neither meet the treasury needs of finance teams today.
Option 1: Excel for cash management
- Never real-time
The vast majority of businesses manually track their cash balances in Excel. Not only is this process time-consuming and prone to manual error, it also fails to give teams the real-time insights they need to identify fraud, improve operations, and minimize default risks.
Many teams only manage to track their cash positions once a week at best, and it’s a process that takes hours. For a company that handles a high volume of payments, the numbers are usually outdated by the time you’ve finished recording them.
Option 2: Traditional treasury management systems
- 2-3 months setup time
- Full-blown project for finance team to implement
- Require ongoing maintenance
On the other end of the spectrum are traditional treasury management systems. While these tools are incredibly powerful and can provide important insights, they are expensive, heavy, take months to implement, and often require engineering resources (which only adds more time and cost).
Most finance teams are already strapped for manpower. Who has the time and resources to spend three months on a project just to get it set up and running? These treasury management systems are great for enterprise businesses, but they’re too much for most teams.
>> It’s a classic Goldilocks problem – one treasury solution is not enough, and the other is too much.
Finance teams need a simple treasury management system they can go live with instantly
Ledge’s radically simplified multi-bank treasury management solution integrates instantly into any finance stack and supports businesses that are newly shifting to a multi-bank strategy or have always struggled to manage it.
Gain visibility into where you stand in real-time: Teams need to know where they stand across all cash, savings, and credit accounts at all times. Ledge provides this visibility into a single dashboard – no more logging into accounts one by one and manually logging amounts.
Protect against fraud and cash sweeping: Get automatic alerts when high-value transfers or anomalies occur, and set up custom rules-based alerts when balances get too high, too low, or about anything else you’d like to identify to address issues in real time.
Report accurately on cash balances: Even with multiple accounts across different institutions in different currencies, Ledge provides a clear total balance and then cash breakdown by provider, account type, and currency.
Minimize exposure to defaults: Get notified when your cash balance goes above the insurance limit or below a certain threshold to protect against black swan events and ensure that on a daily basis, you always have enough cash to meet your obligations.
Automatically transfer funds to keep balances healthy: Ledge doesn’t just alert you; it can act by facilitating automatic funds transfers to keep your cash balances healthy according to rules that you set. Initiate funds transfers right from the same interface – no need to juggle multiple log-ins.
With the right treasury management system, finance teams can say goodbye to liquidity issues, protect against fraud, minimize volatility, reduce the risk of default, and honor their commercial obligations.
Cash is king, but the right treasury management system holds the key to the castle.