Despite the efficiency that treasury management systems (TMS) can provide, many corporate treasurers in Asia still use spreadsheets. A recent webinar organized by SunGard provided insights into why spreadsheets remain so attractive, the benefits TMS can offer, and what treasurers need if they are to make a change.
The lure of spreadsheets
A 2014 survey sponsored by SunGard found that 67 percent of finance executives in Asia still use spreadsheets, which is actually higher than what a similar survey showed in 2011. Although 32 percent of respondents said they use an in-house system and 35 percent said they were in the process of moving from Excel to TMS, many spreadsheet users are still reasonably satisfied.
Mindtrac Singapore CFO B. Suryanarayanan said during the webinar that he is absolutely happy using spreadsheets. “The spreadsheet model serves its purpose,” he said. “The model was developed specifically to address our needs.”
Suryanarayanan added that while has nothing against technology, he has yet to see a sensible system that combines all the different platforms across the globe.
Metaphil CFO Stephen Tan echoed those sentiments, explaining that his organization uses spreadsheets, partly manual, partly outsourced to banks. “They serve our purpose,” he said. “We are happy to adjust to changes as long as the changes can be justified.”
Richel Mahayag, assistant vice president of accounting and treasury for Metaphil, added that the company confirms the results of spreadsheets and manual processes using online banking. “We also do tax payments, statutory reporting and payroll through the bank, and payments to suppliers,” he said. “We’re pretty good. We also have our ERP system, which is very reliable.”
Strategic value from technology
Paul Bramwell, senior vice president of SunGard, noted that heavy reliance on spreadsheets is common in nearly any organization, even those that use a third-party TMS. “They use spreadsheets for some level of analysis,” he said. “They are incredibly flexible. They can be a useful tool.”
The downside to spreadsheets, Bramwell explained, is that they are built by an individual. “The organization becomes risk-exposed if that person leaves,” he said. “If the spreadsheets pull in information from [enterprise resource planning (ERP)] or banking, they can get complex. It can destroy all confidence if it’s wrong.”
An alternative is to use TMS, and it may only cost a few hundred dollars a month to pull information into ERP or a treasury work station, and then into a spreadsheet. “Treasury is a high-value, low-volume part of the business,” Bramwell said. “A treasury workstation brings details into the workstation, to do a reconciliation to make sure what you expected to happen did happen. For a few hundred dollars you can get a great solution. It does divorce you from the bank and you have one connectivity point.”
Bramwell noted that cloud-based solutions have become more prevalent in recent years as costs have gone down, often using web-based treasury solutions. These services can be affordable for even very small treasury functions.
While some companies think they can reduce headcount if they use a TMS, what they actually find in most cases is that they can spend less time collating data and more time analyzing. “They divert headcount to something that is strategic, from something that is administrative,” Bramwell said.
Spreadsheets still have value
Suryanarayanan was adamant that although mistakes happen, he sees no alternative solution for spreadsheets. “I have yet to find a sensible proposal that can help me solve my problem,” he said. “I welcome change. I would like vendors to talk and not try to sell the technology.”
Mindtrac has 32 bank accounts all over the world. “We integrated all the bank accounts with ERP, downloaded to spreadsheets,” Suryanarayanan said. “The risk of accessing the portal is not there. The spreadsheet model is structured such that information comes down.”
Tan noted that while spreadsheets are exposed to human errors, they are minimized through checks and controls. “We look at cost,” he said. “In the case of Metaphil, changes in our technology are approved by group treasury. The solutions must be financially justified, must improve the present system and must correct problems. We haven’t encountered major problems.”
Tan added that it can be challenging to produce reports on time, but he is nevertheless satisfied. “The report comes out every day,” he said. “The information is important, but maybe the need to know immediately is not as crucial.”hile declining costs of TMS and benefits such as having more time for analytics could offer significant value, the discussion reinforced just how difficult it may be to convince companies in the region to switch from the spreadsheets that they currently find quite acceptable to a technology that they do not yet see as adding significant additional value.