Treasury is a broad term that involves the management of money and financial risks in a business. Treasury management involves functions such as cash forecasting, cash visibility, working capital management and such.

Treasury management is essential to building a strong culture of timely cash visibility, while also managing liquidity and risks associated with foreign currency exposures, working capital and such. The goal of treasury management is to maximize financial liquidity, reduce risk, and generate value. Briefly put, treasury management ensures a company always has enough cash to run its operations and any extra cash is invested wisely.

Treasury management systems (TMS) is an enterprise software solution that automates repetitive and critical financial operations in a secure and efficient environment to provide visibility and control over treasury and risk functions . It offers in-depth visibility into cash positions across multiple entities to ascertain liquidity and forecast, and understand currency exposures to manage/hedge risk, accompanied by visual analytics and dashboards that aid insightful decision making.

Key elements of treasury management systems:

• Bank statement consolidation and reconciliation
• Cash projection and liquidity plan creation
• Forecast tracking, monitoring and variance analysis
• Track credit facility, evaluate tranche composition, headroom and lower cost of borrowing
• Assess working capital invested in operations

TMS comes with an assured level of security, performance and uptime with automatic updates and upgrades. It empowers businesses to view and control cash, liquidity and risk positions as well as manage working capital/funding.

Cash management is the process of collecting and managing cash flows. Cash management allows treasurers to have a headline view of consolidated cash position in a single base currency. This can be drilled down further across products, geographies and currencies, both current and forecasts. It helps in reconciliation of daily cash position even before the business day begins with easy import of AR/AP reports either summarized or detailed from ERP or other legacy systems. It also enables auto updating of cash forecasts to get a real-time view of availability of cash. There is seamless integration of diverse data from banks, ERPs & spreadsheets into one single platform for real time visibility.

On the other hand, liquidity management is a process of ensuring that a business has a reasonable amount of cash available to cover the current liabilities, both expected and unexpected. It empowers treasurers to gain full visibility into not only the consolidated cash forecasts but also the long-term liquidity position, helping them to prepare robust liquidity plans in the real-time world. It leads to better alignment with the organization’s cash strategy and reporting structure.

Cash flow forecasting is the process of projecting a company’s cash flow over time. To evaluate if a company has enough money to function and grow, financial predictions are utilized by business owners based on past events and management insight. Cash flow forecasts can help companies avoid late penalties, budget for unexpected expenses, and more, to better manage their cash flow. A cash flow forecast is important to a business because they provide visibility and control and help management make informed decisions.