Four Effective Ways to Optimize Your Treasury Operations
-
bookmark
-
print
Contents
- Maximize operational efficiency
- Simplify where you can
- Make sure you’re protected
- Optimize the use of excess cash
It pays to be prepared for uncertainty. Even in a relatively stable business and economic climate, you may not be able to predict when circumstances will change on a dime.
That’s why it’s always important for companies to ensure they have the right banking partnerships. And just as you do with the other advisers you work with, such as accounting and law firms, it’s a good idea to leverage all the expertise your bank can provide. That includes having them take a fresh look at your entire operation, from your day-to-day needs to whether your organization is positioned to achieve its longer-term objectives.
When it comes to evaluating your banking partners, it’s important to look beyond pricing and products and consider a bank’s asset quality, leverage ratio and overall soundness. You’ll also want to make sure it’s a relationship that can help optimize your treasury operations.
Maximize operational efficiency
Leave no stone unturned when evaluating your current operation. There may be ways to improve even some of your more basic functions. Work with your bank to understand the following:
- Do you have the right types of accounts open for your day-to-day banking requirements?
- Are your transactional turnaround times as fast as you and your suppliers and customers need them to be?
- Is your fee structure in line with the value you’re receiving?
- Are you using the right products to achieve the right outcomes? Are there alternative products to manage your incoming and outcoming payments that offer reporting details, are less costly and easier to use for your internal processes?
- Do you have ready access to information and reporting to help you make sound decisions?
Simplify where you can
Improving efficiency is often a high priority, which means many companies can’t afford to have their employees spend time on tasks that don’t add value to the organization. Analyze the effort required to accomplish certain functions and see if they can be simplified. Are there digital platforms that can make conducting transactions more efficient? Are there ways to automate your cash management activities, such as consolidated accounts payable or receivable reports? Make sure you’re not only using the right tools, but that your employees understand how to use them to their full capabilities.
Make sure you’re protected
Test all of your fraud risk management protocols. Your bank should be keeping up with the latest fraud threats, including social engineering. Mitigating fraud risk isn’t just your bank’s responsibility; establish fraud-mitigation processes so that your employees are also vigilant against fraudsters.
Optimize the use of excess cash
Revisit the yield you are receiving on your excess cash. Do you have the right investment policies in place? Is your cash working as hard as it can for you? You may be able to make strategic investments in your business without having to borrow.
We constantly have conversations with clients who are trying to navigate an uncertain environment. While we know there are many external variables beyond their control that impact their businesses, addressing the issues outlined here can help ensure that their financial position isn’t one of them.
Oscar Johnson
U.S. Head of Commercial Sales for Treasury and Payment Solutions
312-461-8361
Oscar is the U.S. Head of Commercial Sales for Treasury and Payment Solutions for BMO Commercial Bank. His group is responsible for providing cash management, …(..)
View Full Profile >Contents
- Maximize operational efficiency
- Simplify where you can
- Make sure you’re protected
- Optimize the use of excess cash
It pays to be prepared for uncertainty. Even in a relatively stable business and economic climate, you may not be able to predict when circumstances will change on a dime.
That’s why it’s always important for companies to ensure they have the right banking partnerships. And just as you do with the other advisers you work with, such as accounting and law firms, it’s a good idea to leverage all the expertise your bank can provide. That includes having them take a fresh look at your entire operation, from your day-to-day needs to whether your organization is positioned to achieve its longer-term objectives.
When it comes to evaluating your banking partners, it’s important to look beyond pricing and products and consider a bank’s asset quality, leverage ratio and overall soundness. You’ll also want to make sure it’s a relationship that can help optimize your treasury operations.
Maximize operational efficiency
Leave no stone unturned when evaluating your current operation. There may be ways to improve even some of your more basic functions. Work with your bank to understand the following:
- Do you have the right types of accounts open for your day-to-day banking requirements?
- Are your transactional turnaround times as fast as you and your suppliers and customers need them to be?
- Is your fee structure in line with the value you’re receiving?
- Are you using the right products to achieve the right outcomes? Are there alternative products to manage your incoming and outcoming payments that offer reporting details, are less costly and easier to use for your internal processes?
- Do you have ready access to information and reporting to help you make sound decisions?
Simplify where you can
Improving efficiency is often a high priority, which means many companies can’t afford to have their employees spend time on tasks that don’t add value to the organization. Analyze the effort required to accomplish certain functions and see if they can be simplified. Are there digital platforms that can make conducting transactions more efficient? Are there ways to automate your cash management activities, such as consolidated accounts payable or receivable reports? Make sure you’re not only using the right tools, but that your employees understand how to use them to their full capabilities.
Make sure you’re protected
Test all of your fraud risk management protocols. Your bank should be keeping up with the latest fraud threats, including social engineering. Mitigating fraud risk isn’t just your bank’s responsibility; establish fraud-mitigation processes so that your employees are also vigilant against fraudsters.
Optimize the use of excess cash
Revisit the yield you are receiving on your excess cash. Do you have the right investment policies in place? Is your cash working as hard as it can for you? You may be able to make strategic investments in your business without having to borrow.
We constantly have conversations with clients who are trying to navigate an uncertain environment. While we know there are many external variables beyond their control that impact their businesses, addressing the issues outlined here can help ensure that their financial position isn’t one of them.
What to Read Next.
How Treasurers Can Combat Cyberfraud in the Age of AI
Oscar Johnson | March 11, 2024 | Manage Cash Flow
Contents Fraudsters are changing their ways The emergence of synthetic fraud* Best practices Fraud 911 Fraud continues to be on th…
Continue Reading>More Insights
Tell us three simple things to
customize your experience.
Commercial
Commercial
-
Who We Are
-
Industry Expertise
- Agribusiness & Protein
- Agriculture
- Dealer Finance
- Commercial Real Estate
- Correspondent Banking
- Educational Institutions
- Engineering & Construction
- Food & Beverage
- Franchise Finance
- Futures & Securities
- Governments
- Healthcare
- Manufacturing
- Metals
- Not-for-Profit Organizations
- Private Equity Sponsors
- Professional Services
- Retail & Wholesale Distribution
- Specialty Finance
- Trucking
- Dental Practices
- Fuel Services & Convenience
- Logistics, Rail and Shipping
- Technology Banking
- Wine & Spirits
- Religious Institution Banking
- We Can Help
-
Our Bankers
- Our Podcasts
Contact Us
Banking products are subject to approval and are provided in the United States by BMO Bank N.A. Member FDIC. BMO Commercial Bank is a trade name used in the United States by BMO Bank N.A. Member FDIC. BMO Sponsor Finance is a trade name used by BMO Financial Corp. and its affiliates.
Please note important disclosures for content produced by BMO Capital Markets. BMO Capital Markets Regulatory | BMOCMC Fixed Income Commentary Disclosure | BMOCMC FICC Macro Strategy Commentary Disclosure | Research Disclosure Statements.
BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Bank N.A. (member FDIC), Bank of Montreal Europe p.l.c., and Bank of Montreal (China) Co. Ltd, the institutional broker dealer business of BMO Capital Markets Corp. (Member FINRA and SIPC) and the agency broker dealer business of Clearpool Execution Services, LLC (Member FINRA and SIPC) in the U.S. , and the institutional broker dealer businesses of BMO Nesbitt Burns Inc. (Member Canadian Investment Regulatory Organization and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. (authorised and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in the UK and Australia and carbon credit origination, sustainability advisory services and environmental solutions provided by Bank of Montreal, BMO Radicle Inc., and Carbon Farmers Australia Pty Ltd. (ACN 136 799 221 AFSL 430135) in Australia.
The material contained in articles posted on this website is intended as a general market commentary. The opinions, estimates and projections, if any, contained in these articles are those of the authors and may differ from those of other BMO Commercial Bank employees and affiliates. BMO Commercial Bank endeavors to ensure that the contents have been compiled or derived from sources that it believes to be reliable and which it believes contain information and opinions which are accurate and complete. However, the authors and BMO Commercial Bank take no responsibility for any errors or omissions and do not guarantee their accuracy or completeness. These articles are for informational purposes only.
This information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Bank N.A. and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.
Third party web sites may have privacy and security policies different from BMO. Links to other web sites do not imply the endorsement or approval of such web sites. Please review the privacy and security policies of web sites reached through links from BMO web sites.
Notice to Customers
To help the government fight the funding of terrorism and money laundering activities, federal law (USA Patriot Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001)) requires all financial organizations to obtain, verify and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask you to provide a copy of your driver's license or other identifying documents. For each business or entity that opens an account, we will ask for your name, address and other information that will allow us to identify the entity. We may also ask you to provide a copy of your certificate of incorporation (or similar document) or other identifying documents. The information you provide in this form may be used to perform a credit check and verify your identity by using internal sources and third-party vendors. If the requested information is not provided within 30 calendar days, the account will be subject to closure.