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Corporate treasury professionals are being charged with ever-growing strategic responsibilities in an increasingly international business environment. That's especially true for treasurers in Alaska, where exports grew more than 12 percent and topped $4 billion for the first time in 2006.
Treasury departments now serve as internal consultants to improve working capital management, forecast cash to anticipate business issues that could impact earnings, and meet new audit and compliance requirements. Yet many companies have managed the expansion of treasury responsibilities without adding staff or other resources while continuing to use time-consuming manual processes to manage treasury operations.
According to a 2006 Association for Treasury Professionals survey, 91 percent of senior treasury professionals report their department is playing a greater strategic role in their organization than it did five years ago. Yet nearly half of the organizations surveyed maintained the same level of treasury staffing, and 15 percent have decreased staffing over the past three years.
Added to their traditional responsibilities, treasury professionals are now expected to:
[] Strategically improve the bottom line.
[] Identify solutions to daily cash management challenges in an increasingly complex and global environment.
[] Work with limited staff to minimize expenses.
[] Improve internal data control and meet increased compliance expectations.
Another huge challenge treasury professionals face is a lack of systems integration, often a result of acquisitions and disparate tracking systems. In a "Global Treasury News" report, a majority of companies cited the complications posed by multiple financial systems as their greatest obstacle to developing an accurate cash-management picture.
All these factors have created a compelling business case for treasury automation. However, a "Treasury & Risk Magazine" survey shows less than 25 percent of its respondents use a treasury workstation.
To fill the need for affordable and easy-to-use automation, Wells Fargo Bank developed CEO WorkstationSM, an online solution for commercial banking customers that instantly provides a global view of cash positioning, forecasting and trending information--all in one place. Released in October, CEO Workstation is delivered through Wells Fargo's award-winning Commercial Electronic Office[R] (CEO[R]) portal.
A critical step in development of the CEO Workstation platform was Wells Fargo's extensive study of treasurers and cash managers doing their jobs in their workplaces. Coupled with ongoing customer input and feedback, this research helped Wells Fargo design workstation features and functionality that add value to treasurers and cash managers.
CEO Workstation provides automated treasury management tools with the look and feel of a traditional spreadsheet. Customers see their global cash positions, including multiple currencies, current- and previous-day balances, and executive summary graphs and charts. Pre-populated data from Wells Fargo and other institutions save manual entry and reduce errors. Forecasting tools include Report Card, which improves accuracy of cash forecasting and analysis, and Journal Entry Export.
CEO Workstation also increases control of worldwide financial accounts and transactions. Treasurers can manage cash more effectively, maximizing investment returns and decreasing interest.
CEO Workstation can track multiple locations individually and provide an overall picture. Information can be tailored to a company's organization. It also includes user-friendly administration tools. The single monthly service fee avoids big upfront costs and per-user fees of other workstations.
For a company that's at the beginning of the search process for a treasury workstation, it's best to set goals when evaluating possible solutions. First, identify and include project stakeholders. Second, evaluate what's happening today in your company's approach to treasury management. And third, set measurable and specific goals.
When selecting and implementing a solution, evaluate providers based on reliability, data security, high availability, and customer service and support. Meanwhile, consider the impact of an online workstation in terms of:
[] productivity, expedited data collection and analysis
[] improved visibility of bank account balances/activity
[] improved internal/external controls and compliance
[] reduced borrowing costs
[] improved returns
[] reduced currency risk
As another step in your solution selection and implementation, evaluate products in terms of your key needs, cost, time to implement and IT resource requirements.
The new generation of online workstations provides key setup and maintenance features, including guided setup flow for quick and easy setup, the ability to tailor display information to company hierarchy, and user-friendly administration tools.
Key cash positioning features include auto-population of domestic and international account information, account balance monitoring tools, and automatic matching for manual entries of expected transactions with bank-posted items.
Key cash-forecasting features include the ability to automatically populate a forecast based on historical data, forecast based on customized business categories, report card and other tools to evaluate forecasting accuracy, and cash-flow reporting.
Key journal-entry features include automation of time-consuming journal entry creation, ability to create rules to auto-fill offsetting journal-entry information, and support for multiple charts of accounts.
Although online treasury workstations have significant advantages, less than a third of corporate treasuries have invested in Web solutions, according to a 2006 Deloitte Global Treasury Managements Systems survey. Reasons for reluctance include:
[] Uncertainty--Companies might be nervous about investing in the wrong type of technology.
[] Security--With the increasing importance of security and privacy laws, companies could be hesitant about the control standards of new applications.
[] Availability--Since positioning is a critical daily need, some companies worry that the application will be unavailable at important times, due to server or other technical issues.
To alleviate these concerns, many companies turn to their banks to provide an online treasury workstation solution, because:
[] Banks have stringent security standards.
[] Banks have a commitment and a track record of making sure online applications work when their clients do.
[] Companies rely on bank reports as the central tool in cash positioning; banks already have this data for their customers and have experience gathering financial data from other financial sources through secure file transfers.
[] Most banks already provide corporate clients with online access to treasury services.
[] Online workstations are a value-added service that companies can give their syndicate banks.
Banks are also an accessible and reliable partner for online treasury workstation challenges. When needs or questions arise, a company can rely on its relationship manager at the bank to provide quick support, especially when time-critical decisions are in the balance.
Treasury automation offers unprecedented competitive advantages to companies whose treasury professionals are tasked with optimizing cash returns. By reducing the time and effort required for cash positioning and forecasting, automation lowers borrowing costs, earns better investment returns and saves staff time. Treasury automation makes it possible for companies--especially those doing business globally--to centralize their management functions. In addition, automation helps reduce the risk of noncompliance with recent rules changes, such as Sarbanes-Oxley.
With mounting pressure on treasury professionals to optimize cash, companies sense it's the right time to automate cash management. Fortunately, technology advances offer improved choices. Companies now have better options than ever when looking for a reliable and efficient cash management method that meets their organizations' needs. Online solutions fill a void by providing an affordable alternative to traditional software-based workstations, offering more efficiencies and functionality than spreadsheets can deliver. Banks are a natural provider of online treasury workstations, since they offer the combination of cutting-edge technology, security and customer service.
About the Author
Joseph C. Everhart is Alaska regional commercial banking manager for Wells Fargo Bank. He is based in Anchorage. For more information, contact Everhart at 265-2981 or joseph.c.everhart@wellsfargo.com.
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