Step up to today's technology: treasury workstation.

• Author: Snyder, John
• Position: Treasury

The treasury workstation is a good example of a technology-driven product. Technology created the market, technology enabled the product and technology now defines workstation sophistication.

The workstation is a good example of a product that was developed to meet a specific need. Back in the 1970s, high interest rates forced many firms to recognize the importance of managing cash. When inflation and interest rates exceeded 10 percent, companies became concerned about idle funds and unnecessary borrowing. Banks scrambled to respond to this need with sophisticated reporting services such as check and deposit reconciliation, account management services, and controlled disbursement.

The treasury workstation--the centerpiece of corporate cash management--didn't emerge until the right platform technology was developed (the personal computer), followed a decade later by the perfect data transport platform (the Internet). Now, all the pieces were in place to support an efficient treasury workstation.

A treasury workstation combines all of a company's financial data in a single database, including account balances, transactions, histories, forecasts and even debts and investments. Treasury workstation solutions understand the relationships between banks and the general ledger and can interface with those back-office systems on both sides. The workstation user interface is the ultimate financial dashboard, offering controls to manage and manipulate funds.

One basic question most companies will face is when to abandon manual processes and deploy a treasury workstation. This decision is not a function of company size; rather, it involves financial complexity. Some large companies--even with numerous banking relationships--have straightforward cash-management needs.

Conversely, a smaller firm with diverse or remote operations can have complicated accounting needs and relationships with multiple banks that would be well served by a treasury workstation. When considering treasury workstation adoption, the best index is the number and intricacy of core spreadsheets in use by the firm's treasury department.

When considering a standalone workstation versus an enterprise resource planning add-on, it's important to recognize that a standalone tends to be more specialized and fully featured. Add-ons can be functionally weak and often are quite expensive. In either case, if a firm already deals with a vendor, there may be benefits to staying with that firm...