Treasury management

Simply defined, treasury management
is a set of tools that can help streamline business operations and enable companies to operate more efficiently.

“Time is money, and companies want
answers now,” says Terry Wallace, vice
president and principal business relationship manager for Wells Fargo in Houston.
“With access to instant information, companies can make faster, more informed
decisions at less cost.”

Technology has created a new set of treasury management tools including online
banking access, the ability to wire monies,
Internet ACH (Automated Clearing House)
options, in-house deposit capabilities and

“Banking as we used to know it has
changed drastically over the last few years,”
says Wallace. “With the significant increase
in competition, we must now be creative
with our clientele and be able to offer products that enable them to do business faster
and more effectively. Treasury management
services is an area that offers solutions.”

Smart Business spoke with Wallace
about some of the treasury management
tools available today.

How can companies take full advantage of
treasury management products?

Treasury management is a sophisticated
tool that makes it much easier to manage
money. There are a number of different
areas where treasury management can be
an essential tool and vital to the progress of
a company.

Whether it’s for cash flow, access to information or streamlining processes, treasury
management continues to be an important
banking solution. With the popularity of
the Internet and the availability of instant
up-to-date information, online banking portals through treasury management can
enable a client to check accounts and
transfer funds from anywhere, at any time.

What is the typical customer profile?

We’re seeing a wide range of companies
from start-ups to well-established organizations with large sales volumes request treasury management products. Access to
accounts via online banking is probably the
most-used tool. Through the online banking portal, the customer has access to wire
funds, stop payment, photocopies, etc. We
also have sweep accounts where internal
processes sweep funds from a checking
account each night into overnight investments. The money is actually returned to
the business account by the next day.

How secure is online banking?

Wells Fargo prides itself with having the
most advanced technology in the market.
That doesn’t mean that the business customer should not take any precautions or
have internal controls. With the more
enhanced online banking platform, the
business can specify and designate which
individuals or employees can be given
access to account information. They can
further indicate specified functions of
those individuals with the use of passwords and security tokens. Those functions could include outgoing wires where
one user is allowed to create a wire, but a
second user would have to approve and
initiate that wire before being sent.

Fraud protection products such as image positive pay help to identify fraudulent activity by matching presented checks against a
file of issued checks. If, for some reason, a
check does not match, the customer is contacted for a decision to either pay or return.

On the electronic side, treasury management can offer a filter to guard against unauthorized electronic transactions.

What are some of the newer, value-added

The purchasing card is a single credit
card issued to key employees for day-today purchases. This is an extremely useful
expense management tool because it can
provide customized reporting information.
It reduces the time to prepare invoices and
purchase orders. The company can set up
controls such as control limits and specific
merchant authorizations.

Internet ACH allows the customer to originate a broad range of ACH transaction
types quickly and easily online. Direct
deposit payroll, federal and state tax payments and vendor payments are some of the
services available. Most of our customers
use this service for payroll processing. Also,
checks can be lost or stolen, so ACH processing is much safer in preventing fraud.

How have the banking laws impacted the use
of treasury management?

Check 21 has made a major impact on a
number of areas. Most people do not realize
it, but on Sept. 11, 2001, the behind-the-scenes operations of the banks basically
stopped. No one was allowed to physically
transport checks throughout the country, so
Congress passed Check 21, which allows a
photocopy or image of a check to be presented in lieu of the original check. So now
some banks have a product through treasury management that allows a company to
make deposits in their office without having
to take the time to make a trip to their bank.

TERRY WALLACE is vice president and principal business relationship manager for Wells Fargo, Houston. Reach him at (281)
587-3036 or [email protected].