What Your Accountants Need from a Treasury Risk System

As you no doubt have observed, your accountants are busy. Among their important functions is the task of closing your company’s books in what amounts to a finite number of hours. They wade through rivers of data and have to spot check for errors, ensure compliance with various standards and make sure the correct journal entries get to where they need to be.  They are constantly forced to look back.

You, on the other hand, have to constantly look forward. Cash flow forecasts, FX and IR volatility and the need to have bandwidth for new initiatives, above and beyond your day-to-day duties, require you to be proactive and forward thinking. That’s why you and your team have been tasked with selecting a new TRM (Treasury Risk System) to manage cash flow and balance sheet exposures, hedge portfolios, valuations and hedge accounting.

What do accountants need?

If you are in the process of researching treasury systems for your team, you are likely spending time considering what your accountants need. You know they are busy, you know they are overworked. But other than that, your day-to-day arrangements might make them seem like distant cousins. From their perspective it is easy to feel like they are not a “real” part of the system selection process. This is a great opportunity to show them that you understand. But what do they need?

From a treasury risk perspective, what your accountants need is very simple. But that does not mean it is easy. They need:

  1. Complete Data
  2. Now
  3. High Performance Support


Complete Data

First, let’s look at the types of data they need from a Treasury Risk Management system. The list is long; month-end valuations, credit value adjustments, effectiveness documentation, effectiveness tests, effectiveness measurements and journal entries (sometimes detailed and sometimes summarized, but often broken out by legal entity). That is a lot of precise information. If you have a layered cash flow exposure management program for ten entities, then you are likely managing upwards of 250 trades a year. Multiplied by the list above, that’s over 1,000 figures. That is a lot of data for the accountants to get hold of. But they need it every month.

A solid treasury risk choice will need to be an end-to-end system. Many products seem to focus on very specific parts of the treasury risk process. They might only perform exposure analysis or valuations or dashboard reporting using data from various sources. These systems put your accountants at risk for not getting the data they need, as the output of these systems needs to be cobbled together manually. An end-to-end system that can capture exposures and provide workflow to make hedge decisions, facilitate execution, provide valuations and perform hedge accounting processes is critical for giving your accountants a complete set of data.


Timing? Now!

The next thing they need is timeliness. Think of the all-purpose protester motto: “What do we want? Data! When do we want it? Now!” In fact, your accountants don’t just want the data now, they need the data now. They have a very limited time to obtain, verify and process the data you give them. This is especially true if they have to provide journal entries to multiple business units. A cobbled together solution is likely going to delay their process and make every period end a trial. Even certain end-to end treasury risk solutions can cause problems if their accounting processes require you to kick them off and wait for them in sequence. Look out for systems that make you run a mark-to-market process and wait for it to finish before making you run an effectiveness testing process, etc. etc. This too can push your accounting teams past their time limits and create trouble. Look for a system that manages these processes for you. The ideal workflow is for your provider to run these processes overnight on your behalf, so that you can come in first thing and begin the review/reporting process.


High Performance Support

The last thing they need is a high performance support group. What is a high performance support group? It is a team that can provide both first line support and expertise based support. First line support, which is accepting, logging and tracking incidents and functional troubleshooting on the system, is what you will get with most systems. However, many treasury system users get frustrated when front line support does not understand their problems well enough to solve them. When it comes to hedge accounting, there are a lot of detailed scenarios and complicated moving parts. Your accountants may see things in their output that they don’t fully understand. When they call support, they need for the person on the other end to understand where they are trying to get to. Remember, this isn’t academic. It is a real-time process that needs to be completed very soon. Your accountants don’t have time to explain their hedge accounting approach to an inexperienced first line support person.

When selecting an end-to-end treasury system, ask the providers what kind of backstop their support has for providing detailed answers to complex accounting questions. At Chatham, our experienced support staff have access to our dedicated hedge accountants, so that issues can be understood and resolved as quickly as possible. In addition to the great support, ChathamDirect is an end-to-end treasury risk system that can walk your team from exposure capture all the way to journal entries in an easy-to-use web application. ChathamDirect’s period-end processes are run automatically for all of our clients, saving your accountants the time and effort of managing functional processes that don’t add value to their roles. This enables your accountants to both get the data they need and resolve issues quickly so that they can get on with their close process.


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