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Transforming Treasury

Treasury departments get on board with payments technology

The COVID-19 pandemic has provided a strong impetus for businesses to accelerate cloud, digitization and automation initiatives, and treasury departments don’t want to be left behind.

By using technology to do much of the grunt work associated with the global payments process, treasurers can use resources more efficiently and realize more stable and profitable outcomes.

Treasury departments are missing efficiency

Treasurers today are battling a myriad of concerns when it comes to global payment transactions.

For example, it’s still not uncommon for a business to be reliant on a spreadsheet-based process for payments. Since it takes time and skill to learn and work the manual system, treasury departments must depend on a single individual or group to initiate payments and reconcile them across suppliers.

Taking this approach exposes the organization to increased risk should one of these resources leave the firm and take their valuable knowledge with them. It’s also a drain on highly skilled talent that could be spending time on higher-value tasks.

Lack of automation remains one of the single most significant problems for treasury departments. In addition to poor use of valuable resources, companies are bogged down by inefficiencies that drain the bottom line.

According to research conducted by Deloitte, businesses in the US spend nearly $8 to process a single vendor payment, and 62% of the expense comes from labour costs.[i] In addition, it takes approximately 30 days to complete a payment, resulting in suppliers receiving late payments 47% of the time. For treasurers, this can add up to tremendous costs as organizations miss out on the opportunity to negotiate discounts for early payments.[ii]

While new technologies have emerged to automate payments, few companies are adopting best-in-class solutions. Instead, treasury departments tend to look at a bank provider holistically, ignoring the deficiencies of the payments area. If the overall level of service provided by the bank meets their needs, they are happy to pay more for it.

However, the willingness to pay more does not always equate to efficiency gains. As treasurers adopt payment solutions based on satisfaction with the provider as a whole, instead of the effectiveness of the individual payments process, they open the organization to greater risk from slow and non-transparent international payment cycles.

Technology saves the day for treasury departments

Fortunately, new providers are offering game-changing solutions to treasury departments, utilizing emerging cloud and automation technologies to change the way payments are sent across international borders.

An integrated host-to-host solution, coupled with the introduction of an API based payment platform, provides treasury teams with immediate automation and flexibility to streamline processes and regain control of the costs they pay banks.

APIs make it possible for organizations to quickly and efficiently connect to new technology in the cloud, eliminating the need to make costly changes to existing systems or architecture. The advantage then is speed to market as well as the flexibility to quickly add new services to increase overall efficiency.

Automation has its advantages as well. An end-to-end payment solution can easily streamline the entire process, from digitally sending invoices, automatically tracking approvals, and even reconciling payments.

Beyond the benefits of straight through processing delivered by automation, treasurers need the ability to reduce the cost associated with cross-border payments. Treasury departments face two big obstacles when it comes to obtaining a speedy and efficient process: payment delays and spotty information that is transmitted with payment transactions.

A host-to-host solution utilizing a domestic partner network makes it possible for businesses to send payments internationally without the use of correspondent banks. Payments are made in local currency using local financial institutions.

This process provides greater transparency, making it easier to track payments, while also eliminating the costs associated with intermediary fees.

As treasury departments go digital, there are tremendous opportunities to reduce the risk and cost associated with global payments, while also gaining greater organizational efficiency. All it takes is the right technology and solution.


[i] “B2B Payments for the Middle Market.” Deloitte. Deloitte Perspectives. Retrieved from https://www2.deloitte.com/us/en/pages/financial-services/articles/b2b-payments-for-the-middle-market.html.

[ii] “B2B Payments for the Middle Market.” Deloitte. Deloitte Perspectives. Retrieved from https://www2.deloitte.com/us/en/pages/financial-services/articles/b2b-payments-for-the-middle-market.html.

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