Learn how treasury services can help businesses streamline their payment processes, enhance their liquidity management, and mitigate their risks. Discover the latest innovations and trends in treasury services.

Payment services are a crucial part of treasury services that have evolute over the years. Using a reliable API along with file payments is an effective way to streamline the operation connecting ERP direct to banks. This way, is possible to save time on processing and reconciling payments with banks. APIs, is a robust technology that play a crucial role in preventing fraud and ensuring customer satisfaction in payment transactions.

With macroeconomic uncertainty and higher global interest rates, the cost of holding working capital is higher. Businesses can look for selective investment and partnership opportunities to help set their companies up for future success and mitigate risks. Companies are seeing an increased emphasis on modernization, innovation and data intelligence across verticals. Those who work with a partner like J.P. Morgan Chase Commercial Banking will find they are better able to adapt quickly and will benefit from our data insights that may help them make informed business decisions to prepare for the future.

Last updated on Jul 27, 2024

How can treasury services help businesses optimize cash flow?

Cash flow is the lifeblood of any business, especially in uncertain times. Managing cash inflows and outflows effectively can help businesses stay solvent, meet their obligations, and seize opportunities. Treasury services are a set of financial solutions that can help businesses optimize their cash flow by streamlining their payment processes, enhancing their liquidity management, and mitigating their risks. In this article, we will explore how treasury services can benefit businesses of different sizes and sectors, and what are some of the latest innovations and trends in this field.

1 Payment Services

Payment services are the core of treasury services, as they enable businesses to send and receive funds efficiently and securely. Payment services can include domestic and international wire transfers, automated clearing house (ACH) transactions, electronic funds transfers (EFTs), and check processing. By using payment services, businesses can reduce their transaction costs, improve their cash flow forecasting, and simplify their reconciliation processes. Payment services can also help businesses comply with regulatory requirements, prevent fraud, and enhance their customer satisfaction.

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Jeferson Silva Martins, M.Sc.

Manager | Treasury | Payment | Accountant | Finance | CTP
(edited)
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Payment services are a crucial part of treasury services that have evolute over the years. Using a reliable API along with file payments is an effective way to streamline the operation connecting ERP direct to banks. This way, is possible to save time on processing and reconciling payments with banks. APIs, is a robust technology that play a crucial role in preventing fraud and ensuring customer satisfaction in payment transactions.

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Mohamed KORTAM, CFA®, CTP®, CMA®

Regional Treasurer Africa and Middle East | Working Capital Management | Capital Budgeting | Debt Funding | Financial Risk Management.
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2 main functionality; 1. Ability to have timely and accurate visibility on cash position. 2. Ability to use current and historical data to derive short, medium and long term cash forecast with high degree of reliability.

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Bob B.

J🌍ining the d🌎ts
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Recognition of cash is to effective cashflow management. Disparate ledgers and 24/48 cycles reduce the reliability of forecasts and the ability to use cash effectively.

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Mandy Mainza

Corporate Treasurer/ Mentor/ Financial Advisor
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Monitor total receipts and payments on a daily basis. An efficient Treasurer must know exactly how much cash has come in and gone out to Monitor the liquidity of the company. Treasury is the life line of any organization.

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2 Liquidity Management

Liquidity management is the process of managing the balance between cash availability and cash needs. Liquidity management can help businesses optimize their working capital, invest their excess cash, and access funding when needed. Liquidity management can include cash pooling, sweep accounts, zero balance accounts, and overdraft protection. By using liquidity management, businesses can improve their cash flow visibility, maximize their returns, and minimize their borrowing costs. Liquidity management can also help businesses align their cash flow with their strategic goals, and adapt to changing market conditions.

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Bruce Lynn

Managing Partner at The FECG LLC, a financial and treasury consulting firm
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Arguably, liquidity management is as important as managing profitability especially to companies that have had their banks say "no". After all, when you are out of liquidity (not enough cash, no borrowing capacity) your company is out of business; profits are no longer "enough". To prevent this out of business condition companies need to adopt the right set of cash metrics including "how much" and "when". Metrics like free cash flow and the speed of a company's cash conversion cycle are two such metrics that should be used to complement other metrics like EBITDA. Finally, technology is important. Using special purpose tools like a treasury management system will identify (forecast) liquidity needs before not after they are needed.

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Edmore Murungu

Resolution Officer
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Liquidity management is very important in all businesses because it helps businesses identify potential deeps in the cash flow, which will then enable the treasurer to put funding in place well ahead of time. Liquidity management helps managers identify when capital calls and bridge funding is required, as well as efficiently investing excess funds. A treasurer can only commit to funding long-term projects if liquidity risks are managed.

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3 Risk Management

Risk management is the process of identifying, assessing, and mitigating the potential threats to cash flow. Risk management can help businesses protect their cash flow from various sources of risk, such as currency fluctuations, interest rate changes, credit defaults, cyberattacks, and operational errors. Risk management can include foreign exchange hedging, interest rate hedging, trade finance, credit insurance, and fraud prevention. By using risk management, businesses can reduce their exposure to volatility, enhance their financial stability, and increase their confidence in their cash flow.

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4 Treasury Service Innovation and Trends

Treasury services are constantly evolving to meet the changing needs and expectations of businesses. Digitalization, integration, and sustainability are some of the latest innovations and trends in treasury services. Digitalization is the use of technology to automate and optimize treasury processes, such as payments, reporting, and analytics. This can help businesses improve their speed, accuracy, and security of their cash flow management. Integration is the connection of treasury systems and platforms with other internal and external systems and platforms. This can help businesses enhance their interoperability, scalability, and flexibility of their cash flow management. Lastly, sustainability is the consideration of environmental, social, and governance (ESG) factors in treasury decisions and actions. This can help businesses align their cash flow management with their values and objectives while demonstrating their commitment to their stakeholders and society.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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James Macdonald

Managing Director - Relationship Executive at JPMorganChase
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With macroeconomic uncertainty and higher global interest rates, the cost of holding working capital is higher. Businesses can look for selective investment and partnership opportunities to help set their companies up for future success and mitigate risks. Companies are seeing an increased emphasis on modernization, innovation and data intelligence across verticals. Those who work with a partner like J.P. Morgan Chase Commercial Banking will find they are better able to adapt quickly and will benefit from our data insights that may help them make informed business decisions to prepare for the future.

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How can treasury services help businesses optimize cash flow?

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1 Payment Services

2 Liquidity Management

3 Risk Management

4 Treasury Service Innovation and Trends

5 Here’s what else to consider

Financial Services

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