How Does Treasury Automation Work?

Published Last Updated 8 min read

Since its inception in the 1990s, when only the world’s largest corporations could realistically apply new technology to their backroom operations, Treasury Automation - or Treasury Management Systems (TMS) - has become the financial backbone for businesses of all shapes and sizes. Working across the front, middle, and back of house, TMS streamlines corporate treasury operations to create greater efficiencies and support added-value tasks. However, despite the obvious advantages, many business owners, treasurers, and CFOs remain unaware of the enormous possibilities of treasury automation and the benefits it could deliver to their business.

Read on to discover more about TMS and why it’s necessary for any growing company.

The role of treasury automation

Ever since the Great Financial Crisis of 2008, the business world has been on a frantic drive for greater efficiency. Achieving more with less is set in stone. Traditional corporate treasuries, with their multitudes of repetitive tasks, labour-intensive procedures, and manual data-entry systems, were obvious targets in this quest for increased productivity.

Using a mix of rule-based Robotic Process Automation (RPA), Artificial Intelligence (AI), and machine learning to eliminate costly manual inputs and automatically process routine financial functions, TMS is mechanising the corporate accounting landscape. What would once have taken many hours with manual processes is now accomplished in minutes with little or no human intervention. Better still, freed from many mundane tasks, treasurers are using TMS to control multiple financial features, such as e-banking, ERPs, and trading platforms. They also use TMS to support the activities that add most to business value –  decision-making, strategies, analytics, financial optimisation, and mergers & acquisitions.

Treasury automation trends

Digital treasury management has grown from a niche product into an automated network system that works for almost every type of business and across many functions. Critical areas of TMS deployment include:

Accounts Payable

Accounts Payable (AP) management is being transformed from a cost operation into a profit centre through treasury automation. Replacing antiquated paper and spreadsheet systems with TMS can improve cash flow forecasts, reduce banking fees and speed up the processing of payments to key suppliers. Faster payments create opportunities for companies to demand greater ‘early-pay’ discounts from suppliers and service partners.

Risk management

Treasury departments are at the forefront of risk management but changing regulations and expanding globalisation continues to make this task more difficult, particularly in international trade. Poring through paper, online and spreadsheet data to define the cheapest suppliers and the safest suppliers is a time-consuming and expensive business. TMS can provide macro and micro level analysis, scanning vast amounts of stored and sourced data at high speed to discover where the risks are and which tenders are most competitive.


Foresight is a wonderful thing. Accurate forecasting can create opportunities for investment, expansion, and cost savings. Forward-looking treasurers are using TMS to drive high-accuracy micro-cash forecasting with predictive analytics. This creates a dynamic picture of future business operations – real-time projections for cash and liquidity, cash forecasting, bid status, liquidity management, borrowing, investments, and acquisitions that allow businesses to capture the best opportunities, consider all the valuable ‘what if’ scenarios, and extract greater value from the finance department.

How does a business automate its treasury?

Treasury automation involves replacing non-added-value tasks, such as manual data entry, with high-speed, predictive technology that performs these functions automatically and with little or no human intervention.

Businesses wishing to automate their treasury should consider these basic steps:

  1. Evaluate existing IT systems. Implementing TMS will typically require upgrades and replacement of hardware and software across the entire finance department. Ensure IT infrastructure is up to the task.
  2. Conduct a thorough evaluation of all treasury management processes from enterprise resource planning (ERP) systems, trading portals, and cash management platforms to simple spreadsheets and phone calls. Pinpoint those areas and functions prone to error and delay and where TMS will be of benefit without producing the risk.
  3. Take a deep dive into the data and how it is collected. Where are the logjams and discrepancies? Which systems can be automated without increasing exposure or distorting end results?
  4. Consider the costs and benefits, as well as the time to implement change – moving to fully automated treasury management may take months, or even years for large organisations. If the decision is made to move to a TMS, seek a suitable IT supplier to manage the change. Similarly, source a vendor with proven expertise in treasury automation.
  5. Introduce change methodically. Rushing to automate everything at once creates risk. Start with core functions, such as accounts payable, and only move to the following function when each stage is perfected.

What are the challenges?

Treasury automation can produce many benefits, but the process comes with challenges:

  1. Moving to a TMS can be expensive and time-consuming. Some treasury teams may decide that the change is not worth the cost.
  2. Achieving 100% automated treasury management with a single-system solution may not be possible in some cases. This is usually a result of fragmented data and inadequate IT systems.
  3. Weak links in the chain. Many treasury functions are spread across different departments (such as AP and AR). The effectiveness of each department will determine the success of TMS implantation.
  4. Lack of common standards, interfaces and templates can create connectivity issues. These must be understood before implementing automation.

The haves and the have-nots – winners and losers

As the cost of technology continues to fall and the price of human input rises, it becomes inevitable that all tasks that can be managed by machines, will be. In the future, all treasuries will be fully automated, and they will be faster and smarter in their capabilities - with benefits to match. In the meantime, the gap between those corporations with automated treasury management and those without will continue to widen. Organisations that ignore the value of a TMS may struggle to remain competitive as the influence of treasury automation continues to grow.

Contact Clear Treasury today to find out more

Stay ahead of the competition. Make your move to automated treasury management. Contact Clear Treasury or become a client today to discover more about our custom TMS services and the benefits they can bring to your business.

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