PDF Treasury Management System - PwC



Treasury Management System A tool to deliver your strategic priorities

April 2016

Business Case for Treasury Management Systems

Why Treasury Management Systems ("TMS")?

Treasury performs a critically important role in supporting today's organisations to deal with challenging and volatile market conditions. Senior executives are demanding more analytic insights, on a more timely basis, and often with less resources, from their treasurers.

62%

Asia

Global

79% of global respondents see

their treasury function as "valueadding centres", whereby only 62% of treasurers in Asia share this view

47%

Asia

Global

80% Over

global participants

had integrated their TMS with other

systems in their organisations. In

Asia, only 47% of treasury functions

have a TMS.

According to the PWC Global Treasury Survey, 79% of global respondents characterise their treasury as a value-adding centre that contributes by helping businesses achieve strategic goals, and not only an execution centre for payment transactions. However, only 62% of respondents in Asia share this same view.

While we find that more than 80% of global participants already have Treasury Management Systems that are fully integrated in their organisations, only 47% of treasury functions in Asia have a TMS. Asian firms may be lagging behind in this regard. Therefore, we believe that a fit-for-purpose TMS solution will allow treasurers in Asia to meet ever increasing demands and add value to their businesses.

Why Not?

During our discussions with treasurers and CFOs, we found that there are often misunderstandings about TMS implementation.

Myths around TMS implementation

TMS Myths

"It is expensive to implement a TMS"

Not true

"It takes a long time to implement a TMS" Not true

"My spreadsheet does everything"

Not true

"TMS is only transaction-based and cannot do ad-hoc analysis"

"I have e-banking, I don't need a TMS"

Not true Not true

VS

PwC Insights

The cost of TMS implementation has decreased, in particular, a cloud-based TMS implementation could be 30% - 50% cheaper than a traditional server-based implementation.

In some cases, implementation time of a TMS can be as little as 3 months. Also, more complex implementations can often be done in phases so that partial benefits can be realised earlier.

Spreadsheets are manual and difficult to maintain. They lack strong audit trails, linkage to other corporate systems, and can lead to reconciliation challenges.

TMS has the capability to perform treasury analytics to support sound decision making. For example, when integrated with Enterprise Resource Planning systems ("ERPs"), TMS can produce various cash flow analyses such as forecast projections, funding needs, and liquidity ratios, etc. Also, TMS should be capable of automation with Straight-Through-Processing (STP) to reduce / remove manual intervention, speed up processing time, and enhance overall efficiency and controls.

E-banking solutions are proprietary softwares specific to individual financial institutions which generally cannot provide a consolidated view for different bank accounts on a single platform. TMS can provide a real-time consolidated view of different bank accounts.

Capabilities and Connectivity you should expect from your TMS

We have summarised the following basic TMS capabilities that most organisations require, and how TMS should be connected both externally and internally to be most effective.

Basic TMS Capabilities

? Financial Reporting ? Cash and Payments

? Banking

? Investments

? Forecasting and Liquidity ? Debt and Credit

? Hedging ? Risk and Compliance

TMS Connectivity

Payment /

receivable modules

AP

in ERP

AR

ERP

Actuals and forecasts

Daily Rates

Market Data

Market data feeds from suppliers into TMS

Confirmation Message /

Letter

SWIFT, RTGS

Trade confirmations generated from TMS

Payment Messages

TMS Connectivity

Records

Trading Platforms

Deals done through trading portals are recorded in TMS

G/L Interface

Journal Entries

Interface to G/L

Payment messages generated from TMS

SWIFT, RTGS

Bank Statements

Banks

Connection to bank to extract statements

Accounting

Landscape of TMS solutions

There are many considerations when looking for a TMS solution; more than half of survey respondents in Asia expressed dissatisfaction with their existing TMS. Treasurers should note that TMS offerings can be scaled in accordance to the size of their organisations and customised to their needs. Functionalities available range from core payment functions to advanced hedge tracking and other analytical capabilities. Other factors worth considering are the TMS vendor's local support, the user-interface language, and project management support.

Core Functionality

? Cash management ? Payments ? Bank relationship management ? Basic investments and debt

management ? Basic financial instruments ? Accounting JE creation

Mid Tier

Full Functionality

Core functionality plus:

Mid tier functionality plus:

? Basic in-house banking ? Expanded investment and debt

capabilities ? Expanded financial instruments ? Basic hedge position tracking ? Basic hedge accounting

? Netting ? Advanced in house banking and inter-company functionality ? Advanced corporate finance capabilities ? Advanced ability to handle complex financial instruments ? Robust built-in valuation models ? More advanced hedge position tracking and hedge accounting

Case Study: TMS Implementation

PwC delivers a fit-for-purpose solution

Engagement Background

PwC helped an organisation in the air transportation industry upgrade its TMS from a server-based software to a cloud-based solution with advanced analytics capabilities. The organisation has aggressive expansion mandates that will result in increased complexities in its treasury operations, such as managing new funding programmes, performing analytics on financing costs, and complying with new hedge accounting standards under IFRS 9, etc. The treasury team is also looking to redesign its processes to enhance overall efficiency and better support the organisation.

PwC's Value Add: Transforming the treasury function, leveraging TMS capabilities and beyond

PwC is responsible for the overall delivery of the new TMS solution to the client. The implementation spans over a six-month period during which PwC is responsible for project and change management to ensure delivery on-time and within budget. PwC drives the redesign of business processes to leverage capabilities in the new TMS, bridges any gaps between business needs and technical specifications, and manages system testing and rollout to minimise disruption to the client's day-to-day operations. The PwC team combines treasury industry knowledge and system implementation experience to help deliver a smooth implementation while maximising the new TMS solution's benefits to enable the client's treasury function to become a better business partner to the organisation.

Contact us today for more information or arrange for system demos

Albert Lo Partner HK/CN Treasury Consulting Services +852 2289 1925 albert.kh.lo@hk.

Edmund Lee Partner HK/CN Finance Consulting Leader +852 2289 2714 edmund.ym.lee@hk.

Peter Wong Consulting Director HK Treasury Consulting Services +852 2289 1971 peter.wm.wong@hk.

Owen Wu Manager CN Treasury Consulting Services +86 21 2323 2151 owen.qy.wu@cn.



This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

? 2016 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see structure for further details. HK-20160412-5-C1

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download