Cash & Liquidity Management

Successful cash management in a challenging environment

Published: Dec 2022

Given the current challenging economic climate, how can companies improve their cash management and streamline payments and collections? In a recent webinar, experts from Bottomline Technologies shared their thoughts.

Charles Bennett

Head of Commercial Product

Kevin Grant

CRO Corporate Solutions

Leo Gil

VP of Product

Watch the webinar

Cash forecasting is often cited by treasurers as their number one pain point. And in today’s environment, there is more pressure than ever for treasury teams to improve cash management by accelerating their digital transformation. A recent webinar by Treasury Today and Bottomline Technologies looked at current challenges in cash management, and how businesses can harness technology to drive improvements.

The move to automation

“Forecasting was a problem 30 years ago – and forecasting is a problem today,” noted Kevin Grant, CRO Corporate Solutions at Bottomline. In today’s landscape, he said, globalised supply chains and ecommerce mean that companies’ cash balances and customers are both now global, rather than local.

“The challenges of cash forecasting and cash management are only going to get harder,” added Charles Bennett, Bottomline’s Head of Commercial Product. In the early days of the pandemic, he said, many companies found that changes in working patterns necessitated a move away from paper-based payments. With payment types proliferating in number, and the speed of those payments increasing, Bennett believes businesses that have embraced automation and digitisation have fared much better than those still relying on spreadsheets.

The trend towards digitised payments has continued since then, driven by economic uncertainty as well as by a desire for greater efficiency. As part of that trend, companies are embracing new payment types. “In the UK, a good example of that is open banking,” Bennett notes. “We are seeing it as a very cost-effective alternative to more traditional payment rails like cards.” Because reference numbers can be hard coded into transactions, he added, the speed and ease of reconciliation is greatly increased.

A balanced approach

Leo Gil, VP of Product at Bottomline, explained the different ways that businesses have responded to digital transformation, from adapting existing systems by combining ERPs and spreadsheets, to investing heavily in large treasury systems with long implementation cycles. By working closely with its customers, he said, Bottomline aims to take a balanced approach between the two solutions. Rather than requiring a large-scale and costly implementation, the firm’s focus is on supplying tools with capabilities that meet the requirements of the business.

Gil believes that prioritising simplicity and ease of use over myriad functions and features should be the first step when it comes to adopting automation. Rather than completely reengineering their processes, and undergoing extensive and costly implementations, businesses need to take a more pragmatic approach. “We encourage our customers to leverage our SWIFT capabilities,” he explained. “We can pull all of their account balances across hundreds of banks into one place in a matter of weeks.”

When processes are built in a controlled and considered way, they can then be developed gradually on an ongoing basis. Starting with cash visibility as the first step, processes like forecasting, payments and reconciliation can be added later, along with liquidity management, trade finance and foreign exchange.

The way ahead

Grant explained that although high level data gathered quarterly may have been sufficient for treasuries in the past, what businesses now require is much more detailed and up-to-date information.

Acknowledging that fragmented technology platforms can result in poor visibility, he noted that when processes are intertwined, “large volumes of high-quality data can be viewed in near-real-time, leading in turn to better informed decision-making.” In North America, where cheque payments are more widespread, Bottomline has seen a big drive towards digitisation and has continued to build on its digital B2B payments network Paymode-X.

While cost savings can be made by putting automated tools in place, Grant cautioned against losing in-house expertise, noting that automation should be used strategically as a way of redeploying staff from manual processes to more analytical work. “We’ve got tools which are simple in terms of the functionality, but they’re very capable in terms of the volume of information they can handle, allowing millions of transactions to be processed and reconciled,” he concluded. “You cannot do that to the same level of efficiency with an army of people.”

Watch the webinar

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