Treasury management Featured

7:00pm EDT January 31, 2007

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 more.

“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 options?

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 terry.wallace@wellsfargo.com.