Round table: Fight spreadsheet addiction with a treasury management system

In the second Treasury Dragons virtual round table, sponsored by Bottomline TreasuryXPress, a group of senior treasury professionals met to discuss how to reduce reliance on spreadsheets as a treasury management tool.

This month’s group included treasurers from retail, media, manufacturing, healthcare and communications firms, all with differing challenges as their businesses emerged from the pandemic.

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What rapidly became clear was that spreadsheets have their place in even the most developed treasury department. Some of the reasons for continuing to use spreadsheets were:

• Flexibility: In companies where acquisitions had to be integrated, spreadsheets were often seen as  the only way of bringing together data from disparate sources such as Treasury management Systems (TMSs) and Enterprise Resource Planning (ERP) systems.
• Ease of use: Several treasurers mentioned the ease of finding staff, freelancers and consultants with strong spreadsheet skills, compared to the difficulty of finding expertise in a specific TMS.
• Cost: Spreadsheet software is inexpensive
• Reporting: Some treasurers found the reporting functions of their TMS to be restrictive and used spreadsheets to generate the type of flexible reports demanded by the wider business.

Nevertheless, there were clearly identified limitations - and risks - where spreadsheets were used instead of a treasury management system.  Among the issues raised were:

• Risk of error: Errors can creep into large spreadsheets, especially where the staff who had first created them were no longer with the business.
• Compliance: Several members had used internal audits which had uncovered risks in the continued use of spreadsheets, triggering a search for a safer, more efficient solution. Compliance with Sarbanes-Oxley was very challenging in spreadsheet-dependent companies.
• Password management: One group treasurer has invested in technology to manage passwords after realising that protected sheets, ranges, or cells could be impossible to edit if passwords were not stored centrally.
• Extensive manual work: However well built the spreadsheet, there was a high level of manual intervention required, with one treasury team cutting and pasting balances for several hours a day.

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Of the treasurers who were using spreadsheets extensively, all were considering introducing or upgrading their TMS to automate some functions, reduce eros and reduce risk. Getting board approval for the expenditure required was often a barrier - but so was the diversion of staff and resources to implementing such a major change.

A common theme was that the real driver for change came when outside consultants were brought in to audit data security and financial processes. “After their report came in, it became clear to our board that we had to invest in a TMS,” said one treasurer.
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As the meeting closed, it was pointed out that the next wave of automation, including APIs and machine learning is already vastly improving the flexibility and adaptability of TMSs in many of the areas where spreadsheets have traditionally been used - and that bigger change is on the horizon.

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This was the second Treasury Dragons Virtual Round Table, sponsored by Bottomline TreasuryXpress. 

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