It's estimated that about half of all mid-size companies currently use spreadsheets for treasury management activities but it's also predicted that this figure will dip to 45 per cent in the next two years. The figures published in a report, Moving From Electronic Spreadsheets to Treasury Management Systems, by Aite Group, show that we are about to see a shift in the balance of spreadsheet and treasury management system (TMS) usage, with more mid-size companies likely to start using TMS and enterprise resource planning (ERP) systems in the next two years. This estimate is based on treasury technology usage by companies with revenue below $250 million, although larger companies are of course more likely to be using a TMS and the report shows that the following TMS functionality/benefits are the main motivations for companies with revenues of $250-500 million:

• regulatory compliance;
• bank reconciliation;
• cash forecasts;
• multibank connectivity; automation of reports;
• linkage between ERP, banks, and external data sources;
• visibility of cash;
• electronic payments execution and cross-border payments.

The report also shows that companies usually move from spreadsheets to TMS for the following reasons:

• the company wants to grow and needs a more robust treasury system to manage its expansion;
• newly hired treasurers find the company using Excel and decide it's necessary to move to TMS;
• risk is high and thus control is critical;
• treasury must ensure the company complies with regulations; spreadsheets not the ideal tool;
• companies lack skilled treasury resources and bring specialists who reject spreadsheets;
• company's competitors have a TMS.

In favour of spreadsheets

And the report goes on to note that there are a number of compelling reasons why treasurers choose to stay with spreadsheets, including the following:

• Excel is an interim data consolidation device until an integrated solution can be developed;
• some treasurers do not need an overly complicated system;
• to run ad hoc analyses;
• it’s an easier tool to forecast cash flow;
• have been dissatisfied with previous TMS;
• Excel is the basis for one-off reports using extracted data from core treasury systems;
• treasurers feel overwhelmed and too pressured to implement a TMS.

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CTMfile take: This report is an interesting read for those treasury professionals interested in getting an overview of the TMS options available and considering the pros and cons of replacing spreadsheets with a more integrated, automated system.