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Top Treasury Tasks: Cash Management and Forecasting

  • By Andrew Deichler
  • Published: 4/12/2018

The following is an excerpt from the latest Treasury in Practice Guide,
Navigating the Top Tasks in Treasury, underwritten by GTreasury. Download the full guide here.

Sixty-four percent of respondents to the 2017 Strategic Role of Treasury Survey cite cash management and forecasting as key areas of focus for their treasury departments over the next three years. And that’s unlikely to change; with geopolitical risk on the rise, finance professionals anticipate senior management will continue to direct treasury departments to focus on these task for the long haul.

Many treasury functions use treasury management systems (TMS) or enterprise resource planning (ERP) systems for cash management and short-term forecasting. But those systems vary, as well as how they are used.


Volkswagen Group of America uses a global treasury workstation. “It really takes care of most of our cash management and payments—at least activities that are system-driven. The treasury system integrates well with our local accounting systems,” said Jason Prosniewski, assistant treasurer and head of operations.

Volkswagen’s treasury team also has a group email box for more frequent, reoccurring information that comes in from other departments that might not necessarily be captured and transferred in an automated way. A cash positioner makes sure all of that information is captured and incorporated in the cash position. “For example, taxes for different states and municipalities that are processed through a third-party tax payment system,” Prosniewski said.


Patricia Hui, CTP, senior corporate treasury manager for Mentor Graphics, explained that her team uses an ERP system to do most of its cash management; it does a payment run in the system, and then sends its ERP payment files to the bank. “The payment process is highly automated with sufficient controls in place; we set up a scheduler that automatically picks up the payment files and routes them directly to the bank for processing,” she said.

However, Mentor Graphics is in the process of merging with Siemens, which has its own, homegrown cash management system. So going forward, Mentor will still do payment runs in the ERP, but instead of the file being sent directly to the bank; it will be routed through the Siemens’ system. And in the system itself, treasury will have to apply payment approval. “So we really have two scenarios here,” Hui said. “We’re in a unique time right now.”

In order to do cash forecasting for its multiple subsidiaries, Mentor has created a system in Oracle Hyperion that allows it to create three-month forecast scenarios. On a monthly basis, the system pulls in the actuals for the prior month by category. “It will split out a cash transaction by capital spend or payroll tax benefits—those types of things,” said Brian Newton, senior corporate treasury manager. “We’re able to have, on an entity level, a highly granular perspective on where our cash was spent in the past and then use that same system and set-up to have our local and regional teams do a one, two and three-month forecast based on those categories.”

Since Mentor began funding monthly for its entities, it found daily forecasting to be less relevant. Thus the company now simply pumps in enough cash to last a month at a time so subsidiaries have liquidity on a monthly basis.

This model has also been able to inform Mentor’s longer-term forecasting efforts. Treasury makes its predictions for cash flow for the subsidiaries—the direct cash forecast—and merges those predictions with its indirect cash forecast to come up with its quarterly projections for the entire company. “That’s something, even with the Siemens integration, we’re finding to be tremendously helpful and we’re going to continue down that path,” Newton said.


The treasury department at Deluxe Corp. uses Excel for cash forecasting and views it as the best tool for the job. Treasury has looked into purchasing a dedicated system, but has yet to find anything that’s really worth the money.

“Unless there’s a great product out there that can really simplify things for us, I don’t see that we would purchase a product for our forecasting needs,” said Erika Eichten, senior treasury manager, financing and benefits. “With a lot of the treasury workstations, it feels like you’re inputting a lot of the data for the forecasting model, in the same way as you would with Excel, but in a different system. So you’re paying a lot more money but still doing a lot of the work.”

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