Gaining efficiency by integrating treasury systems

For many organizations, however, these efforts to gain efficiency face the hurdle of information housed across disparate systems that cannot easily connect with each other. Finding better ways to integrate the different components of a treasury technology ecosystem can offer meaningful benefits for companies seeking increased efficiency in their treasury operations.

Connecting data across systems

When thinking about companies’ desire to integrate the different components of their treasury technology stack, consider one important piece of context: Establishing secure connections across different financial tools has become easier than ever. This means you no longer need to weigh trade-offs between using the best software for specific jobs and dealing with the difficulties of connecting the different components of a treasury ecosystem. All-in-one treasury technology providers made the argument in the past that having a single system handle all aspects of a company’s financial needs provided a better solution than wading into the complexity and expense — in terms of both limited money and the team’s precious time — of trying to connect disparate systems. In the current data environment companies increasingly need to rely on automation tools to connect treasury systems and transform their data into a relevant format for each system's needs. ETL (extract, transform, and load) tools and Data Lakes support the automation and consolidation of data across these environments, while Business Intelligence tools offer better insight and analysis of your data. Leveraging these tools with a wide understanding of data applications and proper data architecture allows companies to employ each tool to its maximum effect. As the number of companies embracing and providing ETL capabilities grows while consistent use of SFTP and API functionality remain high, connecting separate systems no longer presents a high barrier and companies can choose the best tools for specific jobs with confidence that they can integrate these different platforms at a fraction of the effort and cost once required.

Connected systems offer key benefits

The current technology environment is built to connect systems and data together. Still, simply because connecting different systems no longer presents burdensome complexity, the question remains about why companies would prefer to automate upstream and downstream connections across their tools. Getting data between systems can be handled manually — and many treasury teams spend significant time keying data from one tool into another — so what would compel them to integrate these different systems instead? Integrating treasury technology tools, and specifically connecting the ERP (or enterprise resource planning) and treasury platforms, offers three key benefits that can propel the team into greater efficiency and effectiveness, increasing the value added to the organization.

Eliminate manual errors

First and foremost, system-to-system integration effectively eliminates manual errors in data transmission. The potential for mistakes when relying on a person or team to type the output of one system into another introduces possible errors that can quickly compound. Integrating the ERP and risk components of a treasury technology stack means data flows directly between these two key systems, eliminating potential human errors that could lead to inaccurate assumptions and incorrect hedging decisions.

Streamline the process

The second benefit provided by system integration comes from streamlining the risk management process and saving time. Connecting ERP and risk systems allows detailed or aggregated exposure information, calculated journal entries, and the cash implications of derivative transactions to flow seamlessly out of the treasury platform. The automated transfer of relevant data between systems makes a previously cumbersome process far more efficient, reducing the time required from a lean treasury team and allowing them to focus on higher value-add aspects of their roles.

Gain a comprehensive overview of financial risk

Not only does system integration provide secure data flow that eliminates manual errors and offer a streamlined process that saves time, but it also enables a more comprehensive overview of organization’s financial risk. Getting holistic exposure data into the treasury system provides the most complete look at the organization’s risk profile when making trading decisions, ensuring that the team can act on accurate and timely data from across the firm rather than reacting to incomplete information. Integrating systems, rather than relying on error-prone manual data collection and consolidation, ensures a reliable foundation for analyzing and mitigating risk.

Combining increased accuracy and a time-saving process with the comprehensive overview that a fully integrated treasury technology stack enables companies to reap the full benefits of easier connectivity across systems. Seamlessly connecting the ERP and treasury platforms ensures a holistic risk profile with streamlined operations to manage financial risk effectively. There has never been a better time to take advantage of technology tools and secure a stronger, faster, and more accurate risk mitigation process.

About ChathamDirect

ChathamDirect is a groundbreaking financial risk management and hedge accounting platform that supports foreign exchange, interest rate, and commodity hedging programs. ChathamDirect provides a clear view of your entire hedging program, including cash flow forecasts, balance sheet exposures, and hedge requests — all securely available on a leading SaaS platform. ChathamDirect is backed by Chatham Financial, an employee-owned, independent market leader with a global team of capital markets experts, risk management advisors, CPAs, lawyers, quantitative analysts, and technology developers who serve more than 3,000 clients annually.

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