What is a Treasury Management Software good for?

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A treasury management software (TMS) automates certain processes in the financial area of companies.

With a treasury management software, companies receive support in their financial processes, especially in cash flow management and risk management. What exactly are the functions of a treasury management software and which solutions are available? This we will answer in the following article.

Treasury Management Software: Description

A treasury management software (TMS) automates certain processes in the financial area of companies. Treasury management includes the following tasks:

  • Liquidity management
  • Risk management
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So a TMS system supports in both these areas. It helps companies monitor cash flow and other assets. The aim is to provide those responsible with a sound data basis for decision-making in order to ensure the company's success in the long term.

Modern TMS systems are often cloud-based and offered as software as a service (SaaS). However, there are also solutions that can be installed locally on the company servers.

Treasury Management Software: Functions

Different treasury management software offers different functions. The core functions of a TMS include:

  • Cash flow management and forecasting
  • Payment management & account reconciliation
  • Debt and investment management
  • Financing and risk management
  • Reporting for documentation
  • Cash flow management and forecasting
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A central component of treasury management software is cash flow management, which usually includes cash flow analysis and cash flow planning. The analysis serves to present the current cash flow, and with the help of planning functions, a cash flow forecast can be created based on the status quo and taking into account the expected future business development.

Modern TMS systems automatically connect to companies' bank accounts so that incoming and outgoing cash flows are always up-to-date and managers have access to the latest data.

Payment management & account reconciliation

Transfers that are to be executed automatically can be stored in the TMS. Here you can also define the type of transfer and the account from which the transfer is to be made, or which means of payment is to be used. If payments are made or the company receives a payment, this is recorded in the system and the corresponding accounts are reconciled. Furthermore, bank statements are reconciled with the accounting data so that discrepancies can be quickly eliminated. This ensures accurate accounting, which makes it easier for companies to prepare their annual financial statements and tax returns.

Debt and investment management

Loans are also managed and kept up-to-date by the treasury management software. Due dates of payments as well as open and already repaid loan amounts are displayed transparently.

Often, TMS systems also offer functions that can be used to run through different credit scenarios, so that an evaluation of different loans and their conditions can be made. This facilitates the selection of the most suitable loan for the company and helps to manage investment activities more efficiently.

Investments are also recorded in the TMS. For example, when investing in the capital market, it is possible to see how high the profits or losses are, and generally track and monitor the value of all assets. Financing and risk management

Companies have many options for financing their assets. Treasury management software helps to manage and execute them. For example, it can monitor factoring contracts, as well as fees and costs charged for certain services.

In the area of risk management, treasury management software offers functions to assess payment defaults and their impact on cash flow. It also monitors exchange rates, which is very important for companies that operate internationally, for example if they want to hedge their cash flows against exchange rate fluctuations (so-called cash flow hedge). Reporting for documentation

A treasury management software also offers reporting functions so that certain contexts can be clearly presented for documentation purposes. Those responsible can thus easily gain an overview and then make decisions more quickly.

Treasury Management Software: Comparison

When choosing a treasury management software, it always depends on which functions a company needs exactly and where the priorities lie. Before investing in a TMS system, it therefore makes sense to compare the software from different providers, because not every solution makes sense for every company.

All-in-one systems

Treasury management software covers most or all of the above functions. For companies that have their own treasury department, this is a great advantage because all employees work with the same system. Such solutions are provided by providers such as Kyriba or SAP. They are particularly suitable for very large companies or corporations where financial management is complex.

Treasury Management Software for dedicated uses

In addition to all-in-one solutions, there is also treasury management software that covers only part of the functions. The Agicap software, for example, focuses only on cash flow management.

For smaller companies that need a treasury management software primarily for their liquidity management, such a dedicated solution is therefore more likely to be considered. It is easier to integrate into existing processes and is less complex to operate, as the range of functions is smaller.


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