Treasury workstations

The Need for a Treasury Workstation

A large part of the treasury department's time is taken up by a specific set of high-volume transactions. These transactions involve determining the daily cash position, adjusting the investment portfolio, altering the company's debt position, and taking action to mitigate the company's risk positions. These activities can be tracked on a spreadsheet, but doing so is time-consuming and subject to error. The information derived from these spreadsheets is then manually recorded in the general ledger. The recordation of this information is also slow and subject to error. A reasonable solution to these issues is to acquire a treasury workstation.

Components of a Treasury Workstation

A treasury workstation is a task-specific software solution that may also be designed for a specific type of computer hardware. The treasury workstation is designed to handle the cash tracking, investment, and risk analysis chores of a business. As such, it is an ideal tool for the treasury department. However, it comes at a price, for even a minimum configuration will cost at least $30,000, while a fully-configured system may cost ten times as much. The broad range of workstation costs is derived from the amount of functionality needed, as well as the number of custom bank interfaces that must be constructed. Because of these costs, plus the usual annual maintenance fees, a treasury workstation is not a cost-effective solution for a smaller to mid-range business. Another concern is that the installation process can require a number of months before the company has linked the system to all of its banks and internal systems.

Advantages of Treasury Workstations

Despite the cost and implementation hassles associated with a treasury workstation, it is still an appealing solution for many larger organizations. In general, it can be used to automate many of the more clerical tasks. More specifically, a treasury workstation can take over the following functions:

  • Accounting. Record the accounting transactions associated with treasury activities in the accounting system.
  • Bank reconciliation. Import the bank's record of transactions associated with the company, and reconcile them to the company's record of the same transactions.
  • Exposure. Identify and monitor any financial exposures to which the business is subjected.
  • Forecasting. Assemble information from multiple sources to create a cash forecast.
  • Foreign exchange. Monitor the company's positions in foreign currency holdings.
  • Investments. Monitor and report on all types of investments, such as holdings in money market instruments, mutual funds, equities, and warrants.
  • Payments. Process outbound wire transfer payments.
  • What if analysis. Estimate the company's exposure to a variety of scenarios, such as changes in the yield curve.

The broad range of features contained within a treasury workstation makes it a highly effective tool for those entities that can afford its up-front and ongoing costs.

Related Courses

Corporate Cash Management 
Treasurer's Guidebook