A recent study conducted as part of a SunGard forum on treasury best practices in Kuala Lumpur, Malaysia, found that approximately one third of the forum attendees have introduced specialised treasury management systems (TMS) in an effort to improve cash, liquidity and risk management and to support their expanding businesses.
"The evolving state of business in Malaysia is prompting more corporations to seek out technology that can support them in managing and predicting liquidity, forming viable risk management policies and keeping pace with their successful business counterparts overseas that are already utilising treasury management systems," says the SunGard report.
In Malaysia, many companies continue to manage cash, liquidity and risk manually or by using spreadsheets - practices that are time-consuming and prone to error. For companies in the region that are looking to expand globally and better manage liquidity, SunGard says treasury management technology can help introduce automation and standardise processes, which can help companies improve overall treasury management so that they are better positioned for growth.
When forum participants were asked to state which areas of the treasury they would like to improve, an overwhelming 44 out of the 54 polled indicated liquidity management. In Malaysia, numerous corporations continue to manage cash and liquidity manually or by using spreadsheets, practices that are both time-consuming and prone to error. The use of spreadsheets can present issues in terms of control over data, segregation of duties, accuracy of calculations, auditability and the sharing of information within the department and across the organisation. Forecasting too remains a complex issue.
Risk management has been moved to the forefront as another key area of concern for treasurers in Malaysia. In fact, 32 of the 54 polled cited risk management as an area for improvement. Furthermore, foreign exchange risk (37), liquidity risk (31) and interest rate risk (27) were the top three considerations among Malaysian companies.
Operating with a centralised treasury was the rule rather than the exception for corporate treasurers polled in the forum, with 42 of the 53 participants saying their treasury operates in a centralised environment.
"Treasury automation makes centralisation possible. By centralising treasury operations organisations can gain real-time access to data providing a clear view of cash flowing across the entire organisation," says SunGard.
Of the 54 individuals participating in the forum, 21 stated that they have a specialised treasury management system in place; 12 are using a traditional enterprise resource planning (ERP) system; 13 are relying on spreadsheets and manual processes; 5 are using in-house built and maintained systems; and 2 are using a combination of an ERP and manual processes.
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