What Does A Treasury Management System Do?

What Does A Treasury Management System Do

Everyone in the industry has heard of the treasury management system or TMS, but what does that actually mean? A financial management system is an automated system that allows cashiers to communicate and / or interact with your organization’s banking partners.

With treasury management system you can store and retrieve your data in real time and report and analyze all information in one central location. Companies can save time and money by automating tedious manual processes. Before that let us see what is treasury in the sense of companies.

What is a treasury?

These funds represent the management of the company’s liquidity in all its forms. It mainly depends on:

  • You have sufficient liquidity
  • where you need and when you need
  • in the best price-performance ratio

It is deliberately arranged according to their importance. When there is a lack of liquidity, it is absolutely impossible to transfer funds into an account to pay your suppliers. Cost plays a less important role in this scenario and most importantly, they earn at least some money.

As soon as there is sufficient cash available now and in the future, it makes sense to start optimizing transfers. And only then, for example, can discussions with contractors about the cost of funds be paid off.

What is a treasury management system?

A Treasury management system is a tool for the safe and efficient automation of important financial transactions. They facilitate communication between the finance department and their banking partners by allowing you to view data in real time.

With TMS you can report and analyze payment data, money management, banking, and accounting data from one place.

Financial management plans, regulates and controls company operations, resources and working capital to optimize the use of funds, maintain company liquidity, reduce the overall value of funds and mitigate operational and financial risks.

These include working capital management, currency management, corporate finance and financial risk management. Simply put, treasury management is the management of all business financial matters, such as: Fundraising for companies from various sources, managing currency, cash flow, and various corporate financial strategies and processes.

What can a treasury management system do?

The treasury technology used in TMS allows you to carry out very complex activities. Some of its main features are:

  • View cash balances in real time
  • Currency valuation
  • Payment details
  • Debt management
  • Trade finance

Types of Treasury management software:

  • There are two types of TMS solutions: local systems and cloud systems.
  • A local system is a system that is installed on your company’s own servers. This gives you maximum control over security functions and protocols as the system is only used by your company. On the other hand, you are also in charge of the internal management of the system, which means either you have a skilled IT team or you have to pay for the best third party support.
  • The alternative is to use a cloud system. They are cheaper and faster to set up, but give you less control than the local system.

An alternative to Treasury management software

Although the TMS solution appears to be an effective money management standard, not all companies have adopted it. Many companies are still struggling to justify the costs or are too difficult to implement. In fact, only 44% of finance departments use TMS solutions. The two main alternatives are:

ERP system:

An ERP system is a more general tool that provides a comprehensive overview of the processes throughout the product chain. This usually includes a treasure function, but does not focus on that function when making TMS decisions.


Excel is a spreadsheet program for solving numbers. It can perform calculations based on defined rules and requires manual data entry. It is widely used in conjunction with TMS solutions, but some companies still rely solely on Excel.

Benefits of the Treasury management system?

There are many benefits to using treasure technology in your business. Here are three main benefits:

  • This can help you save time: TMS automates and digitizes processes that previously had to be completed manually. In the past, transaction and sales data had to be entered manually, which took time to complete other important business tasks. This process can now be completed automatically and quickly via TMS. A money management system can also dramatically reduce the time it takes to analyze variances and improve cash flow projections.
  • This can reduce human error: Automatic cash register management eliminates the need for spreadsheets and manual processes. This in turn eliminates the risk of employees entering data incorrectly, which can lead to inaccuracies and errors in documentation.
  • This can help meet the needs: Manual processes are inherently risky when it comes to regulatory compliance. The above risks of human error can lead to violations. There is also a risk that data is entered incorrectly for fraudulent purposes. Switching from manual entry to a straightforward processing solution can eliminate this risk.
  • Temporary efficiency
  • Reducing costs
  • Complete and accurate inspection control
  • Detailed and acceptable data
  • Flexibility of the provider bank
  • Compliance and system standardization

Treasury management system function:

Financial management aims to ensure that there is sufficient money in the organization during the outflow of funds. In addition, it contributes to optimal use of funds and ensures that no unused funds are kept in the company for a very long period of time. This management functions are described below:

  • Cash management
  • Liquidity management
  • Availability of funds in sufficient quantities and at the right time
  • Distribution of funds in sufficient quantities and at the right time
    Optimal use of resources
  • Risk management

Additionally, treasury Management intends to increase the returns available with the company by making higher and lower risk investments.


As you can probably see, there are many advantages to using a treasury system for your business. Companies CFO’s dream to collect accounts can now come true.