The talk about switching from Excel Spreadsheets to Treasury Workstations is now at least 6 years old. The switch has been listed as a best practice for Cash management by multiple experts but still, in any meeting or a conference if you ask for a show of hands for companies that use Excel Spreadsheets for cash Positioning, you are likely to see a few. Typically the percentage is at least 20 and if your audience is largely mid market companies, then chances are that the percentage of companies that use Microsoft Excel Spreadsheets for cash positioning is much higher.
There are multiple reasons why a mid market company would stay with Excel Spreadsheets even when they realize that the best practice to manage cash and forecasts is via the use of a Treasury Workstation. The first and most important factor is the time and cost investment required to get a classical workstation up and running. Higher cost leads to the obvious problem of return on investment, that being the next deterrent in the adoption of a Treasury Workstation. We have discussed the issue of time invested and return on investment before in the blogs. What could be the other reasons?
The answer could lie in over complicated Treasury Workstations and how organizations adopt them. Consider any Treasury Workstation that is available in the market today and you will realize that almost all of them promise better Cash Forecasting, Straight Through Processing, Integration with multiple banks and multiple formats and extensive reporting features. They are all correct, good Treasury Workstations help provide all of the above benefits and more. The real question to ask here is whether your organization needs all of the above on Day 1, agreed these benefits would be good to have but then again do you need to realize all of these benefits on the day you adopt a new Treasury Workstation? How about a simplified,prioritized approach instead of the typical all or none Treasury Workstation implementations? Let us look at some of the benefits we discussed above and see how it applies to mid-market organizations and adoption of Treasury Workstations. Note that some of the thoughts on prioritization could well apply to larger organizations as well.
The ability to get banks to push transactions automatically to your Treasury Workstation is a very useful feature. But most organizations that have been using Excel Spreadsheets for cash positioning would be downloading transactions from their banks. It takes anywhere from 2-10 minutes to download multiple files from a bank system. As a first step you don't really need automated communications with banks to download your reporting files. This is especially true if you have fewer banking relationships, which again is true for many organizations. As the need arises for multiple updates through out the day and if you decide to have multiple banking relationships, you can decide to add this feature. By not automating the download of files upfront, note that you have eliminated one of the most time consuming activity in adopting a treasury workstation- working with IT Teams at a bank(s) and setting up the communication.
If the Treasury Workstation your organization is adopting provides Ad Hoc reporting capabilities, chances are that you can create a report that can be imported directly into your GL System. Yes, it is a manual step but then again you have eliminated a major integration task upfront. You can add this feature as you go along, when this feature becomes your highest priority. Similarly, you can provide a web-based interface to multiple users/departments to enter your incoming and outgoing forecasts. Yes, Integration with payment system would have been better, but integrations take time. Integration with a payment system or a bank for echo-back transmissions could be prioritized for a later date.
Now, say that your organization adopted a simplified approach to adoption and adopted a web-based Treasury Workstation. What are the benefits your organization will have on day 1? You have the ability to forecast cash, upload bank transaction files and reconcile transactions with forecasts and create your daily, weekly and monthly Cash Positions. Based on the rules supported by your Treasury Workstation, you may even have Automated Reconciliations. You would also have a multi-user system and with centralized Ad Hoc reporting, the ability for multiple users to create, save and export data from your system. You also have centralized storage of data, unlimited transactions over an unlimited period of time that you could use at a later date to create your Long Term Forecasts based on historical trends. Yes, you have better controls and improved audit-able data (each action by each user user is stored) as well. Since you eliminated most of the time consuming activities upfront, chances are that your Treasury Workstation would cost a fraction of the cost of an employee. Are these not benefits enough?
Now consider this, if your organization is willing to take the above mentioned approach, your externally hosted, web-based Treasury Workstation could be up and running in less than a week.