Custom Treasury Management System
Features, Integrations, Financial Outcomes
In financial software development since 2007, ScienceSoft creates state-of-the-art treasury solutions that help companies boost the efficiency of their cash, debt, investment, and financial risk management workflows.
Contributors
Architecture and Solutions Director, ScienceSoft
Financial Technology and Blockchain Researcher, ScienceSoft
Treasury Management System in a Nutshell
A treasury management software automates corporate treasury activities, including cash, investment, debt, trade finance, and risk management. Custom treasury software can provide AI-based financial analytics to ensure high accuracy of treasury decisions, maximize profitability, and minimize risks.
A treasury solution integrates with accounting software, bank accounts, trading platforms, and more.
The implementation of a custom treasury management system of average complexity takes 6–12 months, while building a high-end solution may require a minimum of one year. Average costs for building a custom treasury system vary from $400,000 to $1,000,000+, depending on the solution complexity. Use our cost calculator to estimate the cost for your case.
ROI for the custom treasury management system may reach up to 280%. An average payback period for such a solution is about 5 months.
Treasury Management System: Key Features
Below, ScienceSoft shares a sample feature set that forms the core of a treasury management solution. However, each real-life use case for such software is unique, so functionality should be elaborated on and tailored to the business specifics accordingly.
- Tracking real-time cash inflow and outflow transactions on operating, investing, and financing activities.
- Tracking the cash transfer status (sent, in transit, delivered).
- Automated classification of cash transactions (accounts receivable, accounts payable, taxes, payroll, etc.).
- Monitoring cash balances across multiple bank accounts, currencies, regions, entities, etc.
- Automated cash positioning (daily, monthly, etc.) based on the cash flow data provided in bank statements.
Reconciliation
- Automatically matching data on cash transactions provided in bank statements with those recorded in the general ledger.
- One-to-one, one-to-many and one-to-all cash matching based on the preset rules.
- Automatically defining outstanding transactions and marking them to be reconciled manually.
Liquidity management
- Calculating and monitoring working capital.
- Tracking current and quick liquidity ratios to plan operating, investing, financing cash activities.
- Rule-based cash reallocation between bank accounts and intercompany accounts depending on liquidity needs.
- Scheduled and ad-hoc payments to vendors, suppliers, contractors, etc.
- Automated calculation and scheduling of principal and interest payments on the existing liabilities.
- Assigning optimal bank accounts and payment methods (e.g., ACH, BACS) for various payment transactions based on user-defined rules.
- Multi-currency cash pooling, POBO and COBO services, and multilateral netting via in-house banking.
Debt and investment management
- AI-supported planning of investment portfolio and trading activities.
- Monitoring real-time transactions on debt and investment activities across various asset classes, including stocks, bonds, and cash equivalents (loans, bank deposits, marketable securities, etc.).
- Rule-based opening, confirmation, renewal, and closing out of debt and investment transactions.
- Calculating capital gains and losses, accrued interest, average daily balance, weighted yields, duration, total return by investment portfolio, asset class, currency, region, etc.
- Creating custom investment portfolio structures with multiple asset types.
- Automatically created schedules on investment and debt maturity dates.
- Assigning limits to debt and investment transactions (by total amount, volume, asset class, risk position, duration, etc.).
Financial risk management
- Calculating and monitoring liquidity and credit risks based on the current liquidity ratios, up-to-date credit rates, aggregated market data on asset volatility.
- Assigning the maximum exposure limits to liquidity, credit, and market risks.
- Calculating Cash Flow at Risk (CFAR) and Value at Risk (VaR).
- Calculating the fair value of assets and liabilities, credit valuation adjustments (CVA) and debit valuation adjustments (DVA).
- Monitoring real-time FX rates and commodity prices.
- Calculating exposures for FX and commodities.
- Monitoring transactions on hedging activities across various derivative instruments, such as futures, forwards, options, swaps (on equity, commodity, interest rates, etc.).
Trade finance management
- Monitoring trade finance activities, including factoring, forfaiting, etc.
- AI-powered classification of received trade finance documents by type (letter of credit, bank guarantee, trade credit insurance, etc.).
- Extracting, validating, and storing relevant data from trade finance documents to monitor current assets, liabilities, and due dates on payments under trade finance activities.
- Automated calculation of fees, charges, commissions based on interest rates and additional charges under various trade finance forms.
- Setting, tracking, and adjusting trade credit limits.
Electronic bank account management (eBAM)
- Opening, changing, and closing bank accounts.
- Assigning cash transaction limits and cash balance thresholds across bank accounts.
- Tracking, analyzing, and comparing bank fees across various bank accounts.
- Assigning, tracking, and changing signatories.
- FBAR reporting.
- Cash forecasts based on the historical and current data on cash transactions, the company and customer payment behavior trends.
- Forecasts on financial gains under debt and investment activities based on the historical and current data on debt and investment transactions, financial market data projections on FX, interest and credit rates.
- Short- and long-term liquidity forecasting.
- Analysis and comparison of various hedging strategies using:
- Prospective/retrospective effectiveness tests.
- Regression analysis.
- Stress testing.
- What-if scenarios.
Reports and dashboards
- Drill-down dashboards.
- Customizable reports (by period, currency, region, bank account, etc.) on:
- Financial transactions, including cash, debt and investment, and hedging transactions.
- Cash balance, including cash positions.
- Actual vs. forecasted cash flow.
- Actual vs. forecasted financial gains and losses under debt and investment activities.
- Liquidity ratios.
- Net working capital, and more.
Notifications
- Customizable notifications to the treasury management team on:
- Target cash balance exceeding/dropping below the pre-defined threshold.
- Debt and investment transactions exceeding the pre-set limits.
- Payment due dates, including the financial instrument maturity dates.
- Liquidity and credit risks exceeding the pre-set financial exposure limits.
- Regulatory reporting deadlines.
- Suspicious financial data manipulations and fraud attempts, and more.
Security and compliance
- Multi-factor authentication.
- Role-based access control.
- Data encryption.
- Electronic signature workflow.
- Full audit trail for each financial transaction.
- AI-based fraud protection.
- Regular vulnerability scanning.
- Compliance with AML/CFT, OFAC, SOX, SEC, CFTC, EFTA, PCI DSS, IFRS, ASC, FBAR, GDPR, SEPA, EMIR, PSD2, SAMA, and other necessary regulations.
Is Custom Treasury Software the Best Option for Your Needs?
Answer a few simple questions and find out whether you should opt for a custom solution or a pre-built treasury tool.
Do you need software providing specific features, e.g., calculating risk exposures and asset fair values based on custom formulas or transaction confirmation based on non-standard rules?
Do you want to leverage AI-supported treasury automation to accurately plan and optimize cash, investment, and financing activities?
Are you dealing with crypto asset finance and need a blockchain-based solution for automated crypto treasury management?
Do you need a treasury solution providing compliance with the latest financial regulations (SOX, SEC, CFTC, EMIR, SAMA, etc.) of the countries you operate in?
Do you need to integrate your treasury software with multiple back-office systems, third-party financial platforms, or legacy tools?
Do you need a solution powered with advanced financial data security mechanisms like transaction e-signing or intelligent detection of employee fraud?
Do you need treasury software with various interfaces for different roles in the treasury team (e.g., financial analysts, payment specialists, investment specialists, etc.)?
Do you plan to evolve the software with new functional and non-functional capabilities in order to adjust it to changing business and legal requirements?
Do you have large teams involved in treasury tasks and look to avoid the software fees associated with the per-user subscription model?
Please tell us a bit more about your needs
Answer at least 3 questions to get results.
You can go with off-the-shelf treasury software
Looks like market-available solutions are a viable option to meet your needs. Turn to ScienceSoft if you need help with choosing the optimal ready-made tool, its implementation, customization, or integration with your existing systems.
You definitely should consider custom development
Tailor-made treasury software will help you reap the unique benefits that market-available tools cannot offer. Turn to ScienceSoft to get a detailed assessment of a custom treasury system’s feasibility for your business situation.
Custom treasury software is your best choice
Looks like market-available treasury tools won’t be able to provide the expected operational and economic feasibility for your needs. Turn to ScienceSoft to get a consultation on custom treasury software and receive free cost and ROI estimates.
Important Integrations for the Treasury Management System
To enhance visibility of treasury activities, streamline reconciliation, and ensure accurate and timely financial accounting, ScienceSoft recommends setting up the following integrations:
Accounting software
- For the automated creation of entries in the general ledger, accounts payable and accounts receivable ledgers.
- For faster reconciliation.
- For accurate financial reporting.
Bank accounts
- For centralized transaction tracking across multiple domestic and international bank accounts.
- For streamlined reconciliation.
- For quick sharing of trade finance documents (e.g., letters of credit, bank guarantees) with relevant banks.
Trading platform
- For faster confirmation and settlement of FX trade, investment, and hedging transactions.
- To quickly calculate gains, losses, and risk exposures for various investment portfolios and asset classes.
Financial data marketplace
- For streamlined investment portfolio valuation and benchmarking.
- For informed fair value calculation.
- For the data-driven design of hedging strategies.
Supply chain management software
- To assess supply chain data necessary to plan trade finance activities.
ROI Factors for a Treasury Management System
In ScienceSoft's projects, we always seek to cover the following important factors to maximize the value and cost-efficiency of treasury management software:
A high degree of automation
To automate such tasks as, e.g., logging into connected bank accounts and market data platforms, retrieving and reconciliating of relevant financial data, generating financial reports, etc.
AI-powered financial analytics
To accurately forecast operating cash flow and financial gains under investing and financing activities, as well as get intelligent prescriptions on optimal liquidity planning, payment, investment, financing, and hedging actions.
Embedded BI tool
To enable advanced analysis and reporting on financial data across various treasury activities.
Well-documented APIs
To enable integration between the treasury management solution and accounting software, multiple bank accounts, trading platforms, etc.
How to Develop Treasury Software
Treasury software development is a complex process that involves business analysis, solution planning and design, coding, testing, integration, and extensive user training. Implementation of treasury systems with ScienceSoft covers the following important steps:
1
Business needs analysis and eliciting requirements for the treasury system.
2
Introducing the optimal feature set, architecture design, and tech stack.
3
Project planning: scope, deliverables, duration, budget, team composition, etc.
4
Custom treasury software development.
5
Quality assurance in parallel with coding.
6
Financial data migration (from spreadsheets or a previously used treasury tool).
7
Integration with other corporate solutions and relevant third-party systems.
8
User training.
9
After-launch support and evolution of the treasury solution (optional).
What Our Clients Appreciate About ScienceSoft
ScienceSoft’s team proved to be extremely flexible and responsive. They stayed in daily contact with us, which allowed us to adjust the scope promptly and implement new requirements on the fly.
Our collaboration was a true partnership. The team was open, attentive to our requirements, and accurate in addressing them. The delivered solution is exactly what we needed.
We especially appreciate ScienceSoft’s professional approach to security issues, which were among our main concerns due to strict regulations.
Treasury System Implementation Costs and ROI
Based on ScienceSoft’s experience, average costs for building a custom treasury management system vary from $400,000 to $1,000,000, depending on the solution complexity.
Want to understand the cost of your treasury solution?
Benefits of a Treasury Management System
The ROI for a custom treasury system may reach up to 280%. An average payback period for such a solution is around 5 months.
Off-the-Shelf Treasury Software ScienceSoft Helps Implement
For companies with non-specific treasury management needs, ScienceSoft can help implement, customize, and integrate one of the market-leading treasury software products.
SAP Treasury and Risk Management
Key strengths
- Straight-through processing of various financial transactions, including money market, FX, derivatives, securities, and debts.
- Native integrations with SAP S/4HANA Cloud ERP, SAP Data Intelligence, SAP Cash Application.
- Self-paced user training.
Features
- Customizable investment categories and investment portfolio hierarchy.
- Credit risk control based on preset limits.
- Automated calculation of key risk and return metrics, including exposure, future values, sensitivities, and value at risk.
- Automated evaluation of hedging strategies based on simulated transactions and market data scenarios.
Best for
Managing comprehensive investment, funding, credit, hedging activities for large enterprises.
Active Liquidity Platform by Kyriba
Key strengths
- More than 40,000 pre-built payment scenarios for more than 1,000 banks.
- Embedded BI providing advanced financial data visualization and payment analytics.
- ML-powered real-time fraud detection based on the pre-set detection rules.
Features
- In-house banking management.
- Centralized eBAM with signatory authorizing and tracking, audit trails, FBAR reporting, and more.
- Automated bank reconciliation.
- Cash flow and FX exposure forecasting.
- Hedging recommendations based on the approved cash flow forecasts.
Best for
Managing liquidity risks, payments, trade finance and investments for midsize businesses.
Reval by ION
Key strengths
- Configurable OOTB bank connectivity service.
- Integrated market data feeds providing accurate derivative valuations.
- Compliance with ASC 815, ASC 820, ASC 820-10, IAS 39, IFRS 7, IFRS 13, IFRS 9, SEPA, FBAR, and more.
Features
- Automated cash positioning and bank reconciliation.
- Centralized payment workflow via cash pooling, payment factory, multilateral netting, intercompany clearing.
- Automated risk exposure calculation for all major asset classes, including FX, interest rates, structured rates, energy, agriculture, metal.
- Financial risk modeling and analysis.
- Alerts on suspicious financial data manipulations and fraud attempts.
Best for
Managing cash, liquidity, investment risks and hedge accounting for midsize to large organizations.
Treasury System Development with ScienceSoft
With 17 years of experience in engineering financial software and practical knowledge of 30+ industries, ScienceSoft offers full-cycle services to deliver effective treasury solutions.
Treasury system consulting
- Treasury management needs analysis.
- Audit of the existing treasury management processes and tools (if any).
- Suggesting optimal treasury system features, architecture, tech stack.
- Preparing a plan of integrations with the required systems.
- Implementation project cost & time estimates, expected ROI calculation.
Treasury system engineering
- Treasury solution conceptualization.
- Architecture design.
- Treasury system development.
- Integrating the solution with the necessary systems.
- Quality assurance.
- User training.
- Continuous support and evolution (if required).
What makes ScienceSoft different
We achieve project success no matter what
ScienceSoft does not pass mere project administration off as project management, a practice that's unfortunately common in the market. We drive projects to their goals, mitigating risks and overcoming constraints.
About ScienceSoft
ScienceSoft is a global IT consulting and software engineering company headquartered in McKinney, Texas. Since 2007, we help businesses build effective treasury systems tailored to their cash, debt, investment, and risk management needs. Being an ISO 9001- and ISO 27001-certified company, we apply a mature quality management system and guarantee that cooperation does not pose any risks to our clients’ data security.