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27.6.2023 | Last updated: 3.5.2024

10 min read

Three practical ways to use treasury workflows

Over the last ten years, I have made my day-to-day work more manageable by building workflows to automate tasks. Here is the one key thing I have learned: if something can be automated, you should do it. 

Today I can’t even imagine my daily work without workflows and the peace of mind you get from them. I know that the workflows I have set up do their thing in the background – regardless of the day or time. Remembering to perform mundane tasks periodically takes so much energy when you could easily automate them by using workflows so you can happily forget about them. 

This is also why building workflows is gaining popularity across industries – when you automate your work, you can tick off certain items from your to-do list. In treasury for example, where your operations can be business-critical, eliminating some of the burdens of manual work (such as making errors) with the help of treasury workflows can be a game-changer. Consequently, it will also lower your operational risk.

In case you are not already a user – or even fan – of workflows, I will walk you through what treasury workflows are, and tell you about three everyday use cases you may want to consider implementing to simplify your processes, and hopefully, get you inspired enough to start building your own treasury workflows too!


What are treasury workflows?

In a nutshell, treasury workflows are a series of automated actions that can be triggered based on requests or changes in internal and external systems, with the goal to automate otherwise manual processes. A treasury workflow can be a versatile tool for automating various processes. With our clients, we have been (mostly, but not exclusively) focusing on three use cases:

- Bank account management

- Intercompany financing

- System user management

These three use cases are good examples for how to get started using workflows. They can give you some initial ideas but the possibilities are truly endless. With treasury workflows, you can re-imagine how your other processes work as well. Before going any further, let’s take a look at the various use cases.


Managing bank accounts using workflows

Depending on your organization’s size, you may have hundreds if not thousands of bank accounts globally. Setting up new bank accounts takes a lot of communication back and forth between the group treasury and the subsidiaries. When it’s done via emails or other communication channels, the communication can easily become too fractured and a lot slower than you wish for it to be.

Without surprise, that’s why one of the most popular use cases for treasury workflows is to manage bank accounts. There are two main reasons: companies with multiple subsidiaries can have a lot of requests for opening new bank accounts and managing the process and communication via email can be tricky – imagine if someone who’s handling the communication from group treasury is away for one day and the task remains idle in the meantime.

Instead, the process should be straightforward and automated using a workflow-based approach.

An automated bank account management workflow could consist of the following steps:

  1. The group treasury receives a request from a subsidiary to open a new bank account.
  2. The group treasury 'User Group A' checks the request – if necessary, they ask for further clarification or missing details.
  3. The group treasury 'User Group B' finally approves the request and submits it to the bank (optionally by using the eBAM solution, if available).
  4. The bank opens the requested account.
  5. After the final approval, materials regarding the newly opened bank account are automatically transferred to TMS, ERP, and other relevant systems.
  6. The related reporting happens automatically.


Managing users with signature rights

In addition to automating the process of requesting and opening new bank accounts, the group treasury can also manage signatories more efficiently using the workflow-based approach. For example, by using a workflow, a leaving colleague’s signature privileges can be revoked when the system receives a notification from the HR system about that person leaving. This way, no former employee should have signature rights to any of the bank accounts, meaning they won’t be able to take any fraudulent actions thereafter.


Improving intercompany financing with workflows

Another use case for treasury workflows is managing how intercompany loans are processed throughout the instrument’s entire lifecycle. Intercompany financing means that loans are granted from one entity to another within the same group. Intercompany loans offer many benefits, such as quicker cash shifting to avoid cash shortfalls, funding new investments and avoiding bank fees and spreads.

 Managing intercompany loans without a workflow is complex. The request process is highly manual, including many stakeholders within the organization, often from the group treasury and different subsidiaries.

Manual management of intercompany loans can result in the following challenges:

  • Documentation is labor-intensive and it’s also time-consuming to create contracts manually.
  • Intercompany reconciliation can take a lot of effort when performed manually.
  • System breaks can hinder how the end-to-end audit trail (request, approval, Swap trade) is created.
  • Processes that rely on "physical signatures" are unrealistic in the digitalized world, especially post Covid-19.
  • There's a high risk for errors due to manual processes and the many stakeholders involved (e.g., fat finger trade/freak trade).
  • There’s a lack of integration with deal management, trading platform, loan management, and ERP (accounting).


How to transform intercompany financing with treasury workflows?

The intercompany loan management workflow automates the process from start to finish.

In the first step, local subsidiaries can send an intercompany loan request directly through the internal system (e.g., TMS) to the Group Treasury. After the submission, the group treasury can review the loan request and ask for necessary edits. As the next step, the interest rate can be pre-calculated for each loan request before going through two rounds of approvals from the group. Optionally, using FXAll (or another market data provider) to trade a hedging deal (derivative) is also possible. Once the loan application is accepted, the loan contract can be created automatically and sent for digital signature (e.g., by integrating DocuSign or a similar solution). Once the contract is signed, it will be transferred back to the system as a traded derivative (including Market-to-Market, short MTM, and revaluation). As the last step, the instrument can be transferred to the ERP system to ensure interests are expensed and automatically posted.


Reducing FX risk as a result of using intercompany loans

One of the main benefits of using intercompany loans is to reduce the reliance on banks and loaning money in a foreign currency. Instead, all external financing can happen in the currency of the headquarter when loans are coming from within the group. Thus, managing FX risk will become easier:

  • Financing and deposits can be hedged using FX-Swaps.
  • Trades can be forwarded to FxAll (or another market data provider) withholding tax.
  • Derivatives can be fetched from FxAll (or another market data provider), including the revaluation of FX deals.

This will help you to avoid FX fluctuations because of intercompany loans in the P&L.


Automating user management with a workflow

The last use case for treasury workflows on our list is user management, which can be a super critical task in a global group. Removing the manual element from the process can be a big time-saver.

User management is complex – especially when you have subsidiaries worldwide and you are aiming for centralized control. Often, you are supposed to rely on email or notification from HR or ICT to remove someone with signing rights to a bank account from your treasury system, for example. However, this is an error-prone approach, as you may simply miss the notification. From a compliance point of view, this is also non-traceable and lacks an audit trail.

How can you instead improve the user management process with a workflow? It's simpler than you might think. Here are the five steps of digital user management (the example is equivalent to the above-mentioned process of removing former employees with signature rights to bank accounts) 

  1. The new user is registered and assigned a role.
  2. The new user data and the adequate supervisor are imported from the corporate directory.
  3. The supervisor checks the requested role and the entity's access rights and approves, adjusts, or denies the access right request.
  4. The finance manager from the treasury checks the requested access rights and approves, adjusts, or denies them.
  5. The group treasury monitors and tracks the process and grants access rights.


The benefits of automating user management

The most significant benefit of automating user management, based on integrations with other essential systems, is minimizing the risk of unauthorized access to bank accounts and funds. Reviewing access rights manually is highly time-consuming and error-prone. Automating the process means that the rights will always be up-to-date. You will no longer need to give a second thought to who has which rights and it immediately improves compliance and risk concerns.


A case example for user management:

One of our clients has been handling about 10 000 user requests yearly. The subsidiary takes around 15 minutes to submit a request and another 15 minutes for the headquarter to go through the request according to a four-eye principle. This means that over the course of one year, it took them 625 person-days to handle before they started to use a workflow-based automated approach in treasury.


Treasury workflows: a versatile solution for your treasury toolbox

Treasury workflows help you to work smarter, faster, and safer. The best thing about workflows is that they are versatile – if you have an idea about automating a specific process in your treasury and finance department, it may be possible to bring it to life. Today, when the treasury department is becoming even more critical for enterprises to gain a strategic edge, automating every manual task in order to focus on better risk management can be a game-changer.


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