A new study by Aberdeen Group has revealed that most companies still rely on manual processes for treasury and cash management. The report, "Setting PACE in Treasury and Cash Management," shows that technology adoption in this area has been slow to take hold, with the majority of the 160 companies surveyed reporting that they lack integrated processes for managing cash. Facing myriad technology choices and tight budgets, companies often 'opt out,' and end up lagging in adoption of treasury and cash management technologies, resulting in almost 50 per cent of processes remaining manual and spreadsheet-based.
Despite this technology gap, almost 60 percent of respondents rank improving the accuracy of cash flow forecasting as their number one risk management goal, and Aberdeen predicts a sharp uptake in the implementation of treasury and cash management solutions in the next two years. Most companies (42 per cent) are already seeking ways to simplify treasury and cash management processes, with one-third of those surveyed hoping to centralise treasury operations.
Respondents cite three key areas that are important for optimising the treasury: centralised reporting, accurate forecasting and strong decision making on working capital/liquidity.
The report was sponsored by Trema, the provider of treasury management systems. Trema Executive Vice President Jeffery Struzenski said, "This survey clearly shows that as companies grow and go global, working capital cycles become longer and harder to manage, requiring a strong treasury system that evolves with the organisation. He added, "Trema answers this need with solutions that provide efficient, accurate forecasting, reduce the buffer of cash needed cover 'just in case' situations, enable better forecasting, ensure accurate reporting and reduce risks."
