Still, two years ago, the organization had no dedicated corporate treasury personnel. "Bandwidth had one primary bank and one asset manager, and had outsourced some cash management and investment management functions," Taylor says. "When I joined the company in 2019, I was the first dedicated treasury professional at Bandwidth, but we have a great team that has supported our initiatives and process changes."

The organization began to bring treasury activities in-house, and to rethink systems and processes with the goal of optimizing them to accommodate future expansion. Taylor started working with new banks, both domestically and internationally, and engaged ICD to provide insights into short-term investment options.

He also developed a set of treasury metrics, created reports in Excel that improved his visibility into the company's cash position, and built an Excel-based model for analyzing trends and predicting future cash flows. He split out transactions into categories such as accounts receivable (A/R) collections, accounts payable (A/P), payroll, tax, and intercompany transfers. Categorizing transactions was a highly manual task that enabled improved trend analysis for more accurate cash forecasting.

The new treasurer had much more control over the company's liquidity, but he was spending an exorbitant amount of time populating the model with all the necessary data. "Some information was not as easy to pull out of the ERP [enterprise resource planning system] as I had hoped," he says. Moreover, each day he had to log into every banking portal, download the previous day's statements, and manually key the relevant information into Excel.

From a technology perspective, Taylor says, "we were approaching the point where a treasury management system would be helpful as a single source of banking data, cash forecasts, and visibility to transactions and balances." Foreign exchange (FX) exposures were becoming more of a concern, as was tracking intercompany loans. "But we did not have the resources to implement a traditional treasury management system," Taylor emphasizes. "Spending months connecting to bank accounts and creating reports and rules—with hundreds of hours of internal IT resources—was simply not an option."

Bandwidth set out to build a single source of liquidity information that could be implemented at a low cost and with minimal IT resources. Taylor hoped to find a solution that could also automate transaction identification and reconciliation activities, identify FX exposures, improve cash forecasting, and support meaningful reporting for the company's senior management. Bandwidth selected San Diego–based Trovata, then encouraged its external financial partners to build connectivity with the cloud platform.

"We all hear banks and other financial providers talk about their commitment and dedication to technology innovation, while being slow to actually embrace new ways of operating," Taylor says. "But ICD and HSBC really stepped up to the plate for us. They developed new APIs [application programming interfaces] to connect their platforms to Trovata, for us to pilot."

These API connections established straight-through flow of data between platforms, so that the Trovata system serves as a single source of information on all bank and investment account balances, and for insights into corporate cash. It aggregates, normalizes, and delivers bank balances and transaction details in real time.

The system tags incoming transactions with the categories Taylor had previously established. "That makes reporting so much easier and faster than it was with spreadsheets," he says. "We can create a report that just pulls our collections for a month, or payroll tax for the year—you can use whatever tags you want, for whatever time period you choose. This also simplifies data exports for auditors; we can accommodate their requests in minutes."

Bandwidth is leveraging the solution's machine learning capabilities to analyze trends in the data and forecast future results. "We pick the parameters, and then the tool reports the current trends and predicts the future based on our transaction history," Taylor says. "It's easy to adjust the parameters and re-run reports. So maybe we have a couple of months with much higher intercompany transfers than usual. We can exclude those specific transactions and run the forecast again. Or we can easily create a new report if someone wants, for example, to see how much cash we have in a country, region, or currency."

Taylor also built a treasury dashboard that provides visual representations of the key performance indicators he identified early in the treasury transformation. He is the dashboard's primary end user, but he also uses it to share insights with Bandwidth's CFO and other executives. "If there's new information or something that I've noticed that I think others would be interested in, I can make changes before I send out a new dashboard," he says. Forecasting and report creation are much easier within the newly integrated treasury infrastructure than they were with his prior efforts in Excel.

Overall, Taylor says, the new infrastructure is saving him and his two direct reports a significant amount of time each day. The automation has reduced the risk of "fat-finger" errors in the legacy manual process. And the improved visibility into global cash positions enables the treasury team to invest excess cash for higher returns.

Despite these successes, Bandwidth continues to work to increase automation in its liquidity management processes. "One of our company's seven core principles is to innovate by challenging 'what is' with 'what should be,'" Taylor says. "We see ongoing opportunities to make improvements in our daily jobs, enabling us to look for new ways to add value.

"New API technology is taking the industry forward, but it still takes the ingenuity of treasury professionals to imagine our own worlds and ask ourselves, 'What does success look like?'" he concludes. "It is exciting and energizing to see the progress we've made. I'm just as excited to see what we'll be able to do in the future, as we continue to embrace the technology available to us."

See also:

• Efficient Access Management for Bank Portals Around the World
• A New Approach to Invoicing Forecasts
• Cash Visibility That Supports Global Growth
• On-demand webcast celebrating our four winning projects: Treasury Transformation: Get the Keys to Success

And join Treasury & Risk for a webcast celebrating the winners of our 2021 Alexander Hamilton Awards in Working Capital Management: Partner Impact! The live virtual event will take place on May 5 at 12pmET. Register today.