Who will man the treasury?

• Author: Randall, Andrew E.
• Position: Includes related article - Treasury Management

Are you accomplishing all you can with your treasury function? Just how much help should you ask from your bank -- with technology and with manpower?

At the end of 1993, companies were spending about $6.7 billion on cash management services in the United States, up $441 million, or 7 percent, from 1992. And in 1992 the growth was about 7.5 percent from 1991. Overall, the cash management business has stabilized, and it should continue to stabilize. But the many items that make up cash management are shifting in importance. Account-reconcilement and information-reporting services are making way for demand-deposit account, check-clearing, and electronic data interchange services.

So what should you, as a treasury executive, be focusing on for the future? Technology -- and deciding if you should continue to do the detail work of the treasury department or if, instead, you should let your bank take on the assignment while you help steer your company into the next decade.

AHEAD OF THE CURVE

Smart banks already are investing in technology to give customers more of what they want. As part of this drive, their information services continue to grow. Banks know they need to transmit to companies up-to-the-minute information, so many banks are buying software to make that transmission possible.

But the issue is more complex. To make a business productive, banks and corporations must become truly electronically integrated. They must be directly linked -- personal computer to personal computer, mainframe to mainframe -- without routing business through an individual. As a customer, you should be able to log on to the system any time of the day and wherever you are geographically.

As a financial executive, you must make sure your bank is keeping ahead of this technology curve. It should be asking you questions like, when do you want your customer-service people to have access to the bank to request information? Should they be able to request information if they come in on a Saturday morning? The answers should be yes.

These are some of the capabilities you'll have when you become electronically integrated with your banking partner.

* Electronic delivery -- Using an EDI file, your company's customer can send its invoice data directly to your bank. The bank will then translate the data into a payment and update your system. Many companies already use this technique.

* Electronic account analysis -- With electronic account analysis, you'll receive the breakdown on your...