Become More Efficient
The Treasury Department is a very crucial part of any business. Is measuring treasury performance worth the effort? After all, they are not generally profit centres or factories producing tangible items, so why should organizations expend effort on measuring their effectiveness?
“If you cannot measure it, you cannot improve it,” William Thomson, mathematical physicist, and engineer.
Effectiveness is the degree to which something produces a desired result. Efficiency is a measure of maximizing results while minimizing waste. Benchmarks provide a framework to evaluate whether your actions are effective.
HERE’S WHY YOU SHOULD CONSIDER MEASURING THE PERFORMANCE OF YOUR TREASURY DEPARTMENT:
- Need for Control: The treasury function is responsible for high-value, time-critical transactions that can be complex in nature.
- Minimize Waste: Putting efforts in measuring the performance, makes that business unit more efficient.
- Risk Reduction: Treasury is often responsible for managing financial risks (foreign exchange, interest rates, and liquidity risk), counterparty and operational risks.
- Process Improvement: For the purpose of improving the effectiveness of the treasury process, it is important to compare and analyze the various outcomes. These outcomes can be evaluated by developing a metrics to monitor how well they perform.
- Cost: Measure the cost-effectiveness and find out the optimal way to reduce and manage cost.
- Demonstrate Value to Organization: Treasuries are generally under-resourced and often this is due to their inability to demonstrate their value to the organization. By actively measuring treasury performance, senior executives can grow to realize its value and provide the resources required to support the function properly.
Automating the treasury department functions can help you in achieving full control, there are minimal chances of errors which in turn reduces the risk factor in making critical decisions. Taking the Treasury Efficiency Check, i.e. answering a couple of questions about your treasury system operations, integration platform and connectivity options, will guide you in setting effective benchmarks for your future growth.
February 22, 2018
