What Is Treasury Management

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The inflow and outflow of cash. It sounds like a simple concept but managing it efficiently while optimizing results is anything but easy. That’s why many companies turn to their banking partners for the operational tools and expertise that can help them achieve the best results.

The basic definition of treasury management is the following: to administer the financial assets and holdings of a business for effective operations. The goal, however, is much more encompassing and touches all areas of a business’s finances. Treasury management also includes strategies for optimizing a company’s liquidity, maximizing profits, making investment choices, and mitigating any potential risks to the business and its reputation.

Benefits of a Strong Treasury Management Strategy

  • Optimize Liquidity. A strong treasury management strategy ensures that you always have the necessary amount of cash on hand to resolve any working capital obstacles and keep your business running smoothly.
  • Automate Payables. Streamlining payment processes not only saves you money through time efficiency and increased productivity, it also helps to improve customer and vendor relations.
  • Manage Collections. Refining processes for accounts receivable, credit approval, and collections means getting money in the bank sooner and earning short-term interest.
  • Integrate Accounting and Reporting Tools. Treasury management tools can help you analyze bank transactions to minimize fees, increase earned interest, and make better decisions with appropriate forecasting.
  • Mitigate Risk. Managing accounts across finance functions of your company can be complex. Even profitable businesses fail when there’s not enough cash to cover obligations. Proper treasury management gives you the best chance of success by optimizing your cash, receivables, investments, and associated risk.

How to Determine if You Need Treasury Management

There may be many reasons why you need a treasury management strategy to optimize your receivables, payables, deposits, and cash management processes. See if any of the following examples apply to you.

  • Are you executing 50 or more manual wires or ACH transactions per month?
  • Do you need daily reconciliation that integrates to your ERP system?
  • Are you at risk of check fraud because you issue a high volume of checks but only reconcile accounts monthly?
  • Is it important for you to know your daily cash position?
  • If you hold high account balances, are your funds working for you through earned interest or low banking fees?
  • Do you receive a high volume of payments (500+) and want to streamline the collection of your payees’ information from their payment coupons?

How A Bank Can Help

Not all banks have a full suite of treasury management services, so it is important to evaluate their offerings against your company’s needs. In today’s challenging climate, you want products and services that are going to make your financial management easier and give you visibility over your financial health at any time. Here’s what a bank can do for you:

Create Automation

  • Move away from costly paper payments to electronic payments.
  • Consolidate legacy payments with integrated payables and make one-time or recurring payments within a single online dashboard.
  • Accept payments through multiple electronic delivery methods, including ACH, wire transfers, and credit cards.
  • With Mobile Deposit and Remote Deposit Capture, securely scan and send digital check images to the bank remotely for faster processing and fewer errors.
  • Automate manual processes and seamlessly integrate data between your accounting system and bank.
  • Use available APIs to build innovative products faster. These APIs include payment solutions to help clients send payments and transfer funds between accounts.

Provide Custom Reporting

  • Establish custom, detailed reports based on user requirements and schedule automated, daily reports.
  • In addition to detailed reporting, access real-time reports that include prior and current day, all credits and debits, account reconciliation, and summary view.
  • Assess funding needs, minimize idle balances, and take advantage of investment opportunities.
  • Manage your daily cash position and analyze data for forecasting and planning.

Implement Fraud Prevention

  • Use a suite of electronic and paper-based risk management tools to monitor and review exception items before payments are released.
  • Check Positive Pay helps you avoid fraud, monitor discrepancies, and flag potential issues by automatically matching payment checks against issued checks.

Manage Liquidity

  • Use traditional and remote lockbox services to access funds faster, make critical decisions, and lower receivables processing costs.
  • Zero balance account cash concentration allows you to automate the transfer of funds into multiple disbursement accounts with a single master account.
  • Earn higher interest to maximize your savings with a business money market account or other interest-bearing accounts.
  • With Insured Cash Sweep, you can protect your large, liquid deposits at a single bank even when they exceed the FDIC’s maximum insurable threshold.
  • Analyzed Business Checking helps you offset fees for a high-transaction account with a competitive Earning Credit Rate.

We’re Here to Help You Succeed

The Axos Bank team works with you to collaboratively devise strategies and offer scalable solutions that are tailored to fit your needs. We offer all of the above products and services, plus competitive fees and interest rates.

Contact us to get an account analysis and begin benefitting from our expertise in Treasury Management. Our dedicated client service team is here to assist you every step of the way.


What Is Treasury Management

This blog post was published by Axos Bank on August 19, 2020 and last updated on August 19, 2020.

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