Rethinking Treasury Management for the Remote Economy

Many businesses will look back at 2020 as a turning point for treasury management. 

That’s when many manual, paper-based processes were left behind in favor of the efficiency and cost savings of automated digital processes. 

Because professionals are largely working from home in the remote economy, firms have placed a priority on managing financial operations remotely and rethinking their business practices. 

As banks and customers adjust to remote environments, the traditional ways of processing payments and managing liquidity have proved cumbersome at best and in some cases nearly impossible.

Focusing on Real-World Experience

Capital One regularly checks in with its clients to see how they are navigating the remote economy. 

We’re looking to identify methods that companies are considering to fortify their financial processes. At the same time, we’re interested in methods that can help our customers overcome the obstacles of operating while distanced and position them to emerge stronger than ever. 

Here’s what some of them have told us about their new reality.

Volunteers of America

Joe Budzynski’s perspective reflects the issues nonprofits are facing across the country.

Budzynski is Executive Vice President of Organizational Services and CFO of Volunteers of America®. The national social-service organization touches the lives of 1.5 million people each year in 46 states and Puerto Rico. Its 1,350 initiatives include affordable housing, assistance for homeless people, services to veterans and community outreach and investment programs.¹ 

One of its priorities in the remote economy has been to more closely manage its cash flow, a task complicated by its disparate array of funding sources and programs. 

“We have seen hiccups in how funds come in and we worry about paying vendors and staff to serve those most in need,” Budzynski said. 

In response, Volunteers of America has rolled out a new tracking system to more closely monitor its cash flow. It’s also instituted a rolling three-month budget, which gives it the basis to more flexibly respond to fluctuations. 

Budzynski and his colleagues are also using this time to streamline their financial processes. 

“For years, we have been looking for efficiencies gained by removing physical touchpoints as much as possible,” Budzynski says. 

“We are totally embracing e-signature. And we are having conversations with federal, state and county organizations in cases where they currently require a real signature. We need to get the compliance right as well as the efficiency.”

At the same time, Budzynski’s encouraged his staff to write fewer checks and rely as much as possible on ACH for payments. He noted that vendors sheltering in place and social distancing is facilitating this transition. 

Budzynski’s ultimate goal is to make the entire payment cycle electronic. 

“Our challenge is to create a system that would automatically scan vendor invoices and upload them into the system, as opposed to people coding them and keying them in,” he said. “This would enable us to gain an even better understanding of our potential cash liabilities and help us develop better forecasts.”

FirstService Financial®

According to Andrew Lester, President of FirstService Financial, the company was well along on its digital journey before the transition to working from home. 

FirstService Financial provides treasury services, cash management, lending and insurance advisory services. It also supports functions for its parent company, FirstService Residential, the largest manager of residential communities in the United States.²

“The practical considerations of providing services to the boards of more than 8,000 communities in 30 states and three Canadian provinces has been the impetus for us to transition to a digital platform,” Lester said. 

“Although we had been focused on improving our efficiency, the steps we had taken have also made it easier for us to work remotely.” 

One of the most significant steps FirstService took was to digitize and restructure the process of opening bank accounts for community boards. Working with Capital One, FirstService moved to not only eliminate physical processes but also automate and streamline them to increase efficiency. 

The company’s also implemented a system to process supplier invoices electronically and post them on its portal for communities to approve. The transition to working remotely confirmed the value of these initiatives.

Lester sees our new-normal work environment accelerating the transition away from checks. “We are seeing a growing portion of maintenance payments electronically and we expect this trend to continue,” he said. 

“We are also finding that more and more vendors are willing to accept electronic payments.”

Exploring Possibilities for the Future

Melissa McDevitt, Capital One’s Head of Treasury Management Operations, noted that she’s been impressed by the number of companies adopting digital financial products as part of their shift to a work-from-home strategy. 

“Companies that had been leveraging small parts of our digital products used the moment to take a bigger step,” McDevitt said. 

McDevitt cited increased adoption of Capital One’s Intellix® Mobile banking platform as one instance of this shift. 

As the distinction between work and home has blurred, customers have felt more comfortable conducting financial transactions on their mobile devices. Intellix facilitates a number of the most important transactions for preserving vendor relationships, including making and approving payments and approving wire transfers. 

In addition, customers are increasingly using Intellix Mobile to deposit checks remotely. “We saw a 60% increase in remote deposit capture and an overall increase in Intellix Mobile usage of 44%,” McDevitt reports.

One of the reasons Capital One’s been able to provide this level of support for its commercial clients is that it’s moved its platform to the Cloud. 

Bill Brishke, Senior Director, Commercial Technology, pointed out that the Cloud enabled Capital One to provision the infrastructure to create a seamless, robust experience for its mobile clients much faster and more securely than it could otherwise. 

“Although our new normal situation has resulted in an acceleration of businesses moving from manual to digital processes, the gains transcend efficiency,” said Richard Crum, Head of B2B Payments.

They can help companies effect real change, optimizing their business processes. 

“When we work with clients, we try to find out not simply how they are operating their business but more importantly how they would like to operate their business,” Crum said. 

“Automating and integrating their relationship with their bank opens the stream of real-time information that they need to go beyond dealing with immediate challenges and make changes that will make their businesses better over the long term.”

SOURCES

¹ https://www.voa.org/about-us

² https://firstservicefinancial.com/about/firstservice-corporate/

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Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention (CDC). 

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