Millions of people set goals each new year to eat healthier and exercise more. But as we all know, some of these resolutions will fall by the wayside by February or March. Like people setting resolution goals each new year, businesses often lay out quarterly plans and objectives for the coming year, too. But then, as the year progresses, things come up, and plans get delayed, changed, or completely thrown out.
One of the main reasons that resolutions and business plans fail isn’t because of the goals that are being set. Instead, they fail because the initial objective isn’t based on the accurate reality of the situation. For example, if a person aims to eat fruit and vegetables at every meal, but their diet normally consists of junk food and carbs, they are most likely to fail because they aren’t taking into account where they are starting from. They have to be more realistic about the situation and try something smaller, like adding a serving of fruit and veggies each day until they’ve built up a habit. Similarly, a business or organization’s quarterly or yearly plans will not be as successful if they don’t accurately assess their current financial health. That’s where a treasury management system can help.
A treasury management system is essential for accurate financial planning. The overall goal of this type of system is to get a precise assessment of how money passes through an organization and how effectively it is managed to meet the organization’s overall goals and objectives. A treasury management system considers an organization’s overall financial health, risk exposure, liquidity, and use of resources, then compares that to the short and long-term goals the organization is trying to meet.
To develop an accurate treasure management system, your organization will need the help of an experienced treasury strategist. Here at Richmond Financial, we have extensive experience helping businesses and organizations develop effective treasury strategies that address their:
- Cash Management Systems. We consider how the cash flows from their customers and vendors through the accounts receivable department. We investigate payment processing strategies for inefficiencies and redundancies and recommend new technologies or processes to reduce cash flow problems and maintain adequate reserves.
- Capital/Risk Management: We evaluate your organization’s use of working capital and current assets and compare them against liabilities and risk factors. Considering market and industry trends, we create a strategy that balances your organization’s risk tolerance against your growth goals.
- Financing Management: Lastly, we review your organization’s financial accounts and the interest rates and financing tools you have. We evaluate what is working and what isn’t and recommend more efficient financial tools.
A comprehensive treasury management strategy is more than a wishful business plan. It’s a realistic, complete guide for your organization’s finances. During the strategy development process, it’s common to uncover weaknesses, liabilities, and redundancies that are weighing down your organization without realizing it. Then, as the plan takes form, we find new tools and strategies to improve processes and help your organization set more realistic and achievable goals. With the right treasury management strategy, your yearly business plan isn’t a hopeful wish list like New Year’s resolutions. Instead, it’s an achievable system to help your business grow properly!
