Building a ‘treasury playbook’ can yield a competitive edge for businesses

Some days, running a business can feel like an epic battle on the football field. Your team fights for every “yard” of profit, only for ferocious foes to take back any ground you’ve gained.

“Lower barriers to entry, advanced technologies and shifting regulations are leveling the playing field for all kinds of ambitious companies,” said Brad Vincent, executive director of specialized industry banking at BOK Financial®. “While most executives are focused on streamlining their core operations to get ahead, they may be overlooking some relatively easy gains in the finance department.”

Enhancements in treasury services could be the “X factor” they need to improve efficiency, cut costs and increase investment returns, while also guarding against profit-eating threats like financial fraud.

Here are several ways a solid treasury services approach could help your company gain a competitive advantage on both sides of the ball.

Empowering your offense
Optimizing your business’s financial strategies through treasury services may not create a direct source of revenue, but it can help reduce expenses and put you in a position to seize growth opportunities. In other words, calling the right treasury plays can help your team work smarter—not harder—to put points on the board. For example, a strong treasury services strategy can help streamline:

• Cash concentration and zero-balance accounts: If your company has multiple bank accounts for different departments or divisions, you might have excess cash sitting idle in each account. To make the most of these funds, consider establishing a cash concentration account with your primary bank which automatically sweeps cash from disparate accounts into a central depository. Each sub-account is left with a zero balance at the end of each day.
  
  “Cash concentration is a great strategy to help companies reduce banking fees and improve cash management,” said Kim Gwin, treasury sales manager at Bank of Texas. “By pooling funds to a central account, you gain greater control to meet immediate business needs and earn higher returns.”
• Automation and enterprise resource planning (ERP) integration: The larger and more complex your business becomes, the more time is lost to manual financial processes and human error. However, automated workflow solutions can free your team from repetitive tasks and accelerate processes like payment processing, forecasting and account reconciliations. A treasury provider with technology expertise can help your finance organization integrate automation tools with your existing ERP system.

“The efficiencies gained from automation help companies achieve economies of scale without adding additional staff. That translates to lower costs and higher productivity.”

- Kim Gwin, treasury sales manager at Bank of Texas

• Corporate credit cards: For companies with a team of traveling field personnel, continuing old-school per diem and reimbursement procedures could be a costly mistake. Alternatively, issuing corporate cards to employees can improve control over spending and lead to significant cost savings, said Gwin.

Fortifying your defense
While smart financial strategies can help fuel your offense, any gains you’ve made could be erased by financial fraud. Building a strong defense against scams and cyber-crime is essential to protecting your company’s confidential information and safeguard its assets.

“The finance and treasury teams can play a leading role in fraud prevention by ensuring their processes are as airtight as possible,” said Gwin.

An experienced treasury services provider can help your organization design the best defensive formation to keep the bad guys out of your end zone, she said. Here are several strategies to consider:

• Fewer paper checks: Check fraud is extremely common because it’s easy for criminals to intercept checks in the mail and cash them or use the information to create fake checks. Most companies could significantly reduce their risks by moving away from paper checks and instead transferring funds electronically through ACH or other methods. If your company does issue paper checks, ensure you’re also taking advantage of protections like Positive Pay, which flags any check that doesn’t match your approved list of payees.


• Zero trust environment: Make it a priority to educate your entire team about common scams like phishing and email compromise; affordable online training programs are readily available.
  
  “All employees should at least know the basics, like not clicking on unknown links or giving out confidential information,” said Gwin. “But people with the authority to make financial transactions must be especially watchful for the red flags of financial fraud and be trained to authenticate suspicious activity.”


• Separation of duties: Unfortunately, financial fraud is often a crime of opportunity committed by in-house employees. You can remove those opportunities by insisting on the separation of duties, which minimizes temptation by ensuring that no financial process can be completely controlled by one person.

“With the right tools, training and policies in place, the treasury team can worry less about fraud and focus on effective financial management,” said Vincent.