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Not ERP Add-Ons WeWork Treasury Chief: Corporates Need A Treasury Management System

WeWork Treasury Chief: Corporates Need A Treasury Management System, Not ERP Add-Ons

June 15, 2021 at 09:00AM
by PYMNTS

Despite frenetic digital developments in recent months, the real estate space remains a wilderness of legacy payments that digital transformation is tackling.

As WeWork Senior Director of Treasury Operations Trish Fisher said she sees it, the events of the past 16 months are forcing the sector to get its treasury management versus enterprise resource planning (ERP) priorities in order with urgency.

Calling treasury “the unsung hero” of the past year-plus in a commercial/financial sense, Fisher told PYMNTS that “the pandemic really brought the importance of treasury to the forefront. There’s a saying that no one cares about treasury until something blows up. The unfortunate reality is that the world analogously blew up [in 2020-2021] and the role of the treasurer and the treasury IT folks really came to the forefront.”

She added that for the prepared, “it was a seamless transition,” while those caught by surprise “had a very short period of time to implement a lot of change in a very strategic way.”

By “the prepared,” Fisher was referring to those that treated treasury management as its own discrete function rather than another ERP plug-in, as treasury software is often configured.

Either way, she said, it’s causing corporates to “reprioritize areas of automation [previously viewed as optional]. There’s been a lot of talk about treasury management systems, how to utilize them or optimize those currently in place. Even things as simple as ‘Why are we still carrying bank tokens?’ are [a problem], and I think folks are even reconsidering where they bank based on the feasibility of a business continuity plan, as in, can I use my phone instead of a token?”

Acknowledging these and other complexities, she said, “On the [accounts receivable (AR)] side, the problem … that’s always been present is receiving checks instead of electronic payments. For those who are receiving electronic payments, it is a question of [whether or not] the appropriate remittance information is included in that electronic payment so that we can properly apply that cash.”

In payables, she added, it’s shining a light on the crucial role of treasury management systems (TMS) and payment automation, as well as “having your source of truth in the form of your ERP and your delegation of authority really ironed out and ironclad in that ERP so that you can have simple straight-through processing from your ERP to your treasury system to your bank.”

Citing the litany of obstacles still making these areas problematic — the inability to parse data from paper statements to apply cash, the ongoing use of static lockboxes — Fisher raised the questions many treasurers are asking in earnest: “Is the bank where that lockbox is domiciled capable of producing a lockbox file? Can the company’s ERP and cash application system integrate lockbox files to perform cash application using automation?”

Without a TMS governing these areas, the answer is likely “no,” but that’s changing now, she said.

Making The Internal Case For TMS

Noting that she’s long advocated for robust, standalone treasury management systems as opposed to “a supplemental module added to the ERP to serve that purpose,” Fisher told PYMNTS that “there is a lot of particularities and idiosyncrasies when it comes to payments specifically, ranging from the file format to the country, to the level of urgency, to the connection one chooses to make to the bank to send that payment file in the first place.”

With Software-as-a-Service (SaaS) solutions also pressing in on ERP turf, she said, “the problem is that [ERP is] usually either [Secure File Transfer Protocol (SFTP)] or some sort of in-house layer. A lot of people are moving obviously towards SaaS solutions too … but ERP are either locally hosted and therefore on a company’s intranet, or a SaaS solution [has] to go through whatever that provider is capable of doing to connect.”

Calling such setups limiting “versus a treasury system whose sole purpose is … global payments plug-and-play, good-to-go, really minimizing the level of effort and design required to get your payment successfully out the door,” she noted that standalone treasury systems can handle application programming interface (API) connections, SWIFT, or “any connection you can think of to get to a bank. You’re not limited in the same way you are as if you were using an ERP to send a payment file to a bank.”

Additionally, Fisher said ERP and TMS “are designed for different audiences,” and using systems for their ideal purposes brings next-level visibility and troubleshooting to murky processes.

Given inevitable payments rejections and failures, she added, “To go into an ERP that was not designed from the mind of a treasurer or a treasury engineer [to resolve those issues] you are wasting so much time in the troubleshooting process, in the analytics of what the root cause of that failure is, versus a treasury system that is tried and true” for cash management, for payments, and for decoding messages between corporates, intermediaries and banks.

“Just the dashboards alone, the business intelligence that is offered by treasury systems is far superior to that of any ERP that I have seen,” she said.

TMS Facilitating An Easier Real-Time Transition

Treasury management is becoming more important as payments choice multiplies, and particularly as real-time payments enter the frame and become part of the daily flow.

“For the real-time acknowledgement process that SWIFT is offering now, you need to adopt the latest and greatest,” for example, Fisher said. “Folks still using slightly more antiquated methodologies … it might work for them, but maybe when you put it to a stress test like this past year, you can see what things that were left on the back burner.”

While ERP-reliant firms may integrate robotic process automation (RPA) for some processing, Fisher noted that WeWork doesn’t need to as its TMS handles those tasks — and that’s the underlying point. The ground underneath treasury shifted, and treasury needs to shift, too.

“I see treasury as more of an oversight team,” Fisher said. “With RPA and automation coming in and doing a lot of the time consuming, laborious work that … needs to get done… if it can be automated, why should we do it [manually]?”

Joking that “I’m not an IT person, I just play one on TV,” she concluded that treasury needs “to understand the business as well as the tech to make sure the tech is doing what it has to do. You’re going to have … entry-level treasury folks coming in who still have to understand the manual stuff that the RPA has automated … so that as they progress in their careers, they can take ownership of that RPA because there’s always going to be a step in the RPA workflow that says, ‘This is an exception that requires a human.’”