Benefits
Benefits
Topics
Transparency
Maximum Transparency for Greater Certainty in Decision-Making
Cash management provides a view of the respective bank accounts for the coming days. Based on value-dated account balances, the TMS proposes account transfers as part of daily disposition. Medium- to long-term liquidity planning, by contrast, is based on company-specific cash flow categories and makes it possible to identify financing and investment requirements at an early stage over the course of the forecast corporate liquidity.
To safeguard liquidity on a lasting basis, TMS help by delivering a reliable, aggregated picture at the push of a button at any time, as
- a financial status for the day and
- a cash forecast for one to two weeks and
- medium- or long-term financial planning
covering all incoming and outgoing payment flows. Numerous filter and selection criteria allow the data to be viewed quickly for specific banks, accounts, currencies, companies and time grids; charts visualize the future development of account balances, credit lines and actually available liquidity. For internationally operating companies, currency-differentiated liquidity planning is also the basis for effective exposure management across different currencies.
While account balances from electronic account statements only provide yesterday’s status quo, TMS also incorporate future cash flows. In integrated TMS, cash flows from financial transactions such as loans, FX transactions and interest rate derivatives, or guarantee commissions, feed directly into cash management and liquidity planning as soon as they are saved in the respective TMS modules – with no need for re-entry.
Example: when a 30-year loan is created, the TMS calculates a payment schedule with all interest, redemption and fee payments, which are automatically reflected with correct value dates in the corresponding categories in liquidity planning and on the respective accounts.
Internal payment flows and operating receipts and disbursements, usually taken over from accounting, complete the information base so that the best possible decisions on liquidity management can be made.
Why Do You Need a Cash and Treasury Management System?
Cash and treasury management systems (TMS for short) serve to manage liquidity with the aim of safeguarding the company’s solvency. To determine current and future liquidity, all incoming and outgoing financial flows are consolidated and prepared in the TMS.
If a company cannot meet its due liabilities, it slides into insolvency. Insolvency must therefore be avoided at all costs. If a shortfall emerges for the period under review, low-cost financing options can be sought at an early stage. If there is a surplus of liquid funds, investment alternatives can be examined.
Information
Comprehensive Information through the Integration of Global Activities
As a multilingual, browser-based application, Trinity TMS allows all modules to be used simply and securely worldwide. Access to the TMS can be secured by means of two-factor authentication, virtual private network and connection to ID management systems. A detailed authorization system governs which data the respective users can access. The menu structure can be adapted for each user so that they only see permitted information and operation remains as simple as possible.
This is an important prerequisite for motivating users worldwide to participate. If recording planned receipts and disbursements in the TMS is easier than it previously was in a spreadsheet, and the new application offers the subsidiary added value on top of the reduced workload, everyone benefits. By recording data directly in the TMS, you receive the information immediately and eliminate errors that would arise from re-transferring data from e-mails, spreadsheets or information communicated by telephone.
To optimize the planning and consolidation process, the TMS provides functions for monitoring submission deadlines and completions and for blocking further entries after the reporting date. Internal receivables and payables can be mapped efficiently for both sides via mirroring functions.
Risk Reduction
Higher Returns and Reduced Risk
Very few companies are able to forecast the liquidity of the coming days with 100% certainty; some cannot even assemble all the data for the current day in time.
If information is incomplete, outdated or incorrect, measures to safeguard liquidity can only be taken with sufficient safety buffers. This means: funds that would be better invested remain idle as a reserve earning no interest, or loans are drawn on to a greater extent than necessary. By concentrating all relevant information in a single database, a TMS enables more precise planning that takes costs and risks into account.
When looking for financing options to bridge liquidity bottlenecks, it is important first to include all available own funds and any credit lines already agreed but not yet used. At the same time, funds “sitting around” in accounts earning no interest may de facto be unavailable, because as “trapped cash” they serve as collateral, for example, or are not available for internal financing due to legal restrictions. The TMS provides a corresponding overview at the push of a button and helps determine the actually available liquidity and the internal financing potential.
Tip:
If the costs of cash pooling appear uneconomical in relation to the achievable benefits, the TMS can provide support through rule-based disposition proposals.
To reach the desired target balance, it can make sense to include intraday advices (e.g. camt.052) on expected incoming payments in the calculation.
In Trinity TMS this function is called “account levelling” and can be used for daily intercompany clearing as well as for individual ad hoc transfers.
In cash management, many companies use account balance concentration procedures to offset unnecessary debit balances on sub-accounts and to collect surplus credit balances on a central master account.
If the bank takes on this task, this is referred to as cash pools, which under zero balancing bring the sub-accounts to a zero balance daily, or under target balancing to a previously defined minimum balance. Cash pooling ensures that the liquidity of the structure becomes immediately visible on one account and that the administrative effort for the sub-accounts can be reduced to a minimum.
Cash managers who know each day what liquid funds are at their disposal today and in the coming weeks or even months can significantly reduce safety reserves and optimize returns by choosing financing and investment alternatives early on. At the same time, liquidity risk is reduced to a minimum.
TMS also provide valuable support in the early identification and hedging of interest rate and exchange rate risks. Currency-differentiated liquidity planning allows foreign subsidiaries to record data in their own currencies and shows the head office both the original amounts and the amounts converted into group currency. In exposure management, hedging transactions are compared with the underlying transactions and measured against the specified hedge ratio. This way, treasury immediately knows whether additional hedging is required or whether unnecessary and expensive over-hedging exists.
Default and credit risks are anticipated in the TMS via ratings, the inclusion of credit risk in market valuations through credit/debit value adjustments (CVA/DVA), or simulated developments of incoming payments. Correctly assessing the risks associated with the financial area and taking suitable hedging measures prevents surprises and, by avoiding losses, likewise contributes to improving financial results. Investors are also inclined to grant better conditions to companies that have their finances under control.
Time Savings
Time Gained through Digitalization and Automated Routine Processes
You urgently need a guarantee from your house bank and are already dreading the paperwork and the barely predictable processing time until the desired guarantee is granted? There may be an easier way, as our digital guarantee management solution shows.
In financial management in particular, a great many formerly paper-based processes have already been digitalized. It began with the introduction of cashless payments, which have already gone through several stages of optimization via machine-processable file formats designed for national (DTA), euro-related (SEPA) and finally international use (CGI according to ISO 20022). The provision of electronic account information, bank fee reports, posting instructions and deal confirmations, the generation of electronic signatures and much more are already taken for granted today.
Nevertheless, there are many further tasks for which digitalized solutions are being sought: electronic bank account management, know-your-customer registries, AI-based fraud detection, securities issues, right through to autonomous, software-controlled liquidity management with integrated financial risk management. From a corporate perspective, not all offerings can be used sensibly and economically by every company; certain fads therefore often disappear after a short time. The fact remains, however, that converting analog information into digital values offers plenty of opportunities for process optimization.
Automation
First and foremost, this means automating routine processes, giving staff in cash, treasury and risk management more time for what really matters. Importing and reconciling account transactions with planned incoming and outgoing payments, assigning them to the appropriate categories in liquidity planning for target/actual variance analysis, importing market data, automatically assigning accounts to cash flows, interest accruals and valuations in order to generate posting instructions for genuine straight-through processing – the TMS can handle all of this for you. To prevent errors, plausibility checks or, where required, approval requests can be built into the processes.
But the handling of FX transactions via internet trading platforms, intercompany financing, the consolidation of hierarchical liquidity plans, the multilateral clearing of intragroup receivables and payables, and the creation of reports and analyses can also be accelerated through automation.
An Accelerated Process from Liquidity Planning to Month-End Closing
Most companies already use systems for accounting and electronic banking. Further software may be in use for reconciling account transactions with the planned receipts and disbursements from accounting, while liquidity planning is handled in a controlling tool or via spreadsheets. The interconnection of these systems often needs optimization, and not all accounts worldwide are included. Spreadsheets are also popular for managing FX transactions, interest rate hedges or guarantees agreed over the phone. Transferring the resulting cash flows into an overview for liquidity management with sufficient lead time is rarely complete, up to date and error-free.
A company with only a few financial transactions and foreign currencies to manage may get by with such a solution. But the more transactions there are and the greater the resulting financial risks, the more worthwhile it becomes to acquire a TMS – one that not only combines the isolated solutions into a single system, but whose integrated modules also enable complete data transfer without delays or typing errors.
Numerous options exist for integration into your existing system landscape in order to implement automated and secure data exchange.
Externally, the TMS fits perfectly between accounting and electronic banking. Especially where several versions of one accounting system, or different financial accounting systems, are in use within the group, the TMS can quickly be set up as an information hub. It takes in planning data from all suitable sources and reconciles it with the transactions from the electronic account statements, assigns them to the various categories in the plan, and can use rule-based account assignment to generate instructions for the automatic posting of cash flows in the ERP. Such postings can of course also include valuations and interest accruals, thereby accelerating the period-end closing many times over.
Tip:
If you have so far used AUSZUG.TXT and UMSATZ.TXT files from electronic banking as a template for automated posting: these will cease to exist when MT940 statements are replaced by camt.053 files in 2025 at the latest! Even if you use MT940 directly, it is time to prepare for the XML formats!
Adaptability
Scalable System Configuration with an Individually Tailored Setup
Companies are fundamentally different, and so the requirements placed on financial management are very diverse too. A modular TMS lets you start with the system configuration that suits you. If managing interest rate derivatives plays no significant role, for example, you simply do not license that software module. If the need arises later, the module can easily be added. The individual modules can be restricted for each user individually – with regard to companies, financial transactions, functions and workflow steps, for example. In addition to limiting the permitted actions, this improves clarity and makes it easier to get started with the new system. User authorizations can be extended at any time in compliance with the four-eyes principle.
Another advantage: once you are familiar with Trinity TMS, you can handle most things without our involvement. You do not need an expensive specialist who rarely has time for you.
Technically, Trinity TMS is built on a powerful ORACLE database that can also handle very large volumes of data. For private cloud installations, Trinity offers its customers individual installations in ISO 27001-certified data centers based in Germany that are also used by credit institutions. This means particularly high security standards with 99.5% availability. As your company’s financial management requirements grow, Trinity TMS grows with them.
Security
Audit Compliance through the Four-Eyes Principle, Verified Formulas and Audit Trails
In many cases, treasury departments still rely on spreadsheets. Over the years, individuals have often created masterpieces here that others can barely follow. If the creator is on holiday or has even left the company, nobody really dares to touch the spreadsheet or risk introducing errors through changes. Sometimes the masterpiece itself already contains inconsistencies and rounding errors that can lead to wrong decisions. Whether the formula applied is the right one, and who entered what and when, is difficult to trace.
A TMS uses recognized and verified formulas and maintains an audit trail for the data – in some cases even full historization – showing not only the author and time stamp but also the changed values. The TMS assigns different authorizations to users, who can work in the system in parallel, and allows audit-compliant workflows with internal approvals and authorizations (“segregation of duties”) to be set up.
Personal Support
Personal Service from an Experienced and Independent Provider
Many providers offer treasury systems, some with more and some with less functional breadth and depth. What matters for users is that they get the solution that suits them and that it delivers genuinely noticeable benefits over many years.
However, the treasury management system does not (yet) handle liquidity management on its own. As a rule, several people are entrusted with various tasks in order to manage and analyze financial transactions and planning data. In medium-sized companies in particular, though, the available human resources are limited alongside the monetary budget.
An experienced provider recognizes how much “treasury management system” makes sense for the financial management team in each individual case at the start of an implementation project, and in what order the implementation will quickly lead to results. More about our services
Regardless of the size of the company, all future users have to implement the TMS alongside their normal day-to-day work. A simple and “easily digestible” start is therefore important for an efficient process. Small successes at the beginning motivate everyone involved. Trinity also takes on some preparatory tasks for you, so that at the first training session you already find yourself in a familiar environment with your own companies and accounts.
The international roll-out can also be well prepared. To do so, you first look for “friendly users” who support the project and can convey the advantages of the new TMS to other subsidiaries better than the head office can.
Trinity does not leave you on your own when introducing Trinity TMS and is only satisfied when you are. Our support department knows you and your installation. In addition, we continuously develop your Trinity TMS further and can even carry out customer-specific programming if required.
In any case, we act according to our motto: