6 things to know about treasury management systems (TMS)

In today’s fast-paced financial landscape, businesses need more than just traditional banking solutions to manage their cash flow, investments, and payments efficiently.

Treasury management systems (TMS) are software applications that allow businesses to manage their financial operations by tracking and automating processes like cash flow, investments, and payments.

Here are six things to know about treasury management software systems before finding the right solution for your business.

1. What is a Treasury Management System (TMS)?

A treasury management system (TMS) is software that automates certain processes involved in a company’s cash management. It offers a centralized view of financial data while automating the movement of cash between operating and investment accounts, allowing businesses to maximize returns while ensuring enough cash is available to cover bills and operating costs.
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Treasury management software can calculate upcoming payments and strategically invest idle cash, keeping only the necessary amount of cash-on-hand in an operating account. By integrating with a company’s bank accounts and other platforms where they store financial data, like accounts payable or enterprise resource planning (ERP) software, these systems can optimize cash flow and eliminate the manual work usually required to export data and make decisions about where and how to move funds.

A TMS also supports organizations in maintaining regulatory compliance.

2. What are the functions of treasury management systems?

TMS serve multiple functions aimed at optimizing an organization’s financial operations. Some of the primary treasury functions include the following:

Cash and liquidity management

Through direct bank connections, a TMS gathers and displays real-time data to support daily cash management functions, including cash positioning, funding, and investment. This allows businesses to monitor liquidity, making sure financial obligations are met and unused cash balances are invested strategically.

Payments

TMS streamline payment processes by integrating with accounts payable systems to automate workflows and ensure timely vendor payments. They often support various payment methods, including ACH, wire transfers, and virtual cards. Features like payment scheduling and extended payment terms help businesses optimize cash flow while maintaining strong vendor relationships.

Automation of financial tasks

TMS automate repetitive tasks such as payment processing, reconciliation, and financial reporting, minimizing the need for manual intervention and reducing human error. This allows finance teams to spend more time on high-value strategic activities.

Cash flow forecasting

TMS predict cash flow by leveraging historical data and current financial trends. This helps businesses plan for future liquidity needs, address potential shortfalls, and allocate resources more effectively.

Risk management

TMS can identify and mitigate financial risks related to currency fluctuations, interest rate changes, and credit exposure. They may provide tools for treasurers to evaluate these risks, ensuring compliance and protecting the company's financial stability.

Other treasury functions

Other helpful functionalities of treasury management systems include:

• Bank relationship management: With a TMS, you’ll have better control and transparency over bank accounts and get access to features for account management, signatory tracking, Foreign Bank and Financial Accounts (FBAR) reporting, and detailed bank fee analysis.
• Cash pooling and in-house banking: A TMS can improve intercompany financial flows since they typically include tools for managing notional and physical cash pools. They can provide real-time position updates and automated interest calculations, too.
• Multilateral netting: Your company can optimize intercompany transactions by calculating net payables and receivables per participant.‍
• Accounting and compliance: A TMS will simplify your accounting processes and ensure regulatory compliance through automated journal entry generation and comprehensive Enterprise Resource Planning (ERP) integration for general ledger (GL) connectivity. It can make GL reconciliation a breeze.

3. Cash management vs. treasury management

Treasury management and cash management are related but serve different purposes.

Cash management focuses on short-term liquidity to ensure funds are available for daily expenses like payroll and supplier payments. It involves optimizing accounts payable, receivables, and fund transfers to maintain operational efficiency.

Treasury management, on the other hand, takes a broader, strategic approach. It oversees cash forecasting, investment decisions, debt management, and financial risk mitigation.

While cash management ensures liquidity for daily operations, treasury management aligns financial strategy with long-term stability and growth.

4. The benefits of treasury management systems

Maximized yield on operating cash

By leveraging data across a business’s bank accounts and financial platforms, TMS can identify surplus funds and invest them strategically, ensuring maximum returns while maintaining sufficient liquidity for operational needs.

Time-saving automation

Typical weekly processes for treasury managers involve exporting business account balances into Excel spreadsheets, calculating upcoming payments, and choosing where to invest excess cash. TMS not only automate these tasks, but optimize cash flow so that the maximum amount of cash is earning interest at any given time.

Centralized financial visibility

TMS offer a centralized view of your company’s bank balances and returns on investments, along with upcoming payments and payment history, all in one dashboard. This visibility supports better forecasting and financial decision-making.

Extended vendor payment terms

Some TMS offer extended payment terms on invoices, enabling you to pay vendors on time while opting for 30-, 60-, or 90-day repayment terms to the treasury provider for a small fee. This frees up working capital for business operations without risking missed payments or straining vendor relationships.

5. Who provides the top treasury management services?

Ramp¹

Ramp is a cutting-edge finance automation and treasury management platform designed to help businesses optimize spending, streamline financial workflows, and gain real-time insights into their cash flow. Unlike traditional corporate card providers, Ramp integrates expense management, bill payments, accounting automation, and AI-driven analytics into a single platform.

Rho

Rho is a comprehensive finance platform that integrates corporate cards, expense management, accounts payable automation, business banking, and treasury management. It offers features like up to 2% cashback on spending and automated accounts payable processes. ​

Airbase

Airbase is a spend management platform that combines corporate cards, bill payments, and expense reimbursements into one system. It aims to provide full visibility and control over all company spending.

Fyle

Fyle automates expense management from receipt capture to reconciliation and reimbursement. It integrates with existing business credit cards and accounting software, offering real-time spend visibility and simplifying expense management for businesses of all sizes. ​

Nilus

Nilus offers an AI-powered cash and treasury management platform for fintechs, financial firms, marketplaces, and other companies moving money. It aims to transform the CFO suite by providing better data connectivity combined with AI.

6. How to choose the right treasury management software

Selecting the right TMS for your business requires a strategic, multi-stage approach. Beyond considering cost, we recommend:

• Conduct a thorough needs assessment: You can improve the likelihood of CFO approval by positioning the solution as a critical investment. Be specific in naming your desired functionalities/core requirements.
• Prioritize essential features: Look at TMS solutions from various providers and compare their offerings against your specific criteria. Choose a system that addresses current needs and anticipates future growth.
• Plan for long-term scalability: Ideally, your chosen TMS will not only meet immediate demands but can also adapt and expand as your business evolves.

Earn on your operating cash with Ramp Treasury¹

You shouldn’t have to compromise between yield and liquidity. With Ramp Treasury, you can earn 2.5%² on operating cash while saving hours every week on cash management. Automate fund transfers to keep your balances optimized, and schedule deposits so you always have enough cash on hand.

Free, same-day ACH helps you extend vendor payment terms by up to three days, giving you valuable extra working capital. Pay bills exactly when they’re due without incurring fees or delays, all while keeping vendors happy and your cash flow flexible.

Enjoy peace of mind with FDIC insurance³ up to millions of dollars in the Ramp Business Account. Open a free Ramp Treasury account in under a minute.

_{1) Ramp Business Corporation is a financial technology company and is not a bank. All bank services provided by First Internet Bank of Indiana, Member FDIC.}

_{2) Get up to 2.5% in the form of annual cash rewards on eligible funds in your Ramp Business Account. Cash rewards are paid by Ramp Business Corporation and not by First Internet Bank of Indiana, Member FDIC. Cash rewards are subject to change. See the Business Account Addendum for more information.}

_{‍3) Customers with a Ramp Business Account can use the ICS service provided by IntraFi Network LLC. Ramp is a financial technology company, not an FDIC-insured depository institution. Banking services are provided by First Internet Bank (FIB), member FDIC. Subject to the terms of the applicable ICS Deposit Placement Agreement, FIB will place deposits at FDIC-insured institutions through IntraFi’s ICS service. A list identifying IntraFi network banks appears at https://www.intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. To meet the conditions for pass-through FDIC deposit insurance, deposit accounts at FDIC-insured banks in IntraFi’s network that hold deposits placed using an IntraFi service are titled, and deposit account records are maintained, in accordance with FDIC regulations for pass-through coverage. Deposits are insured by the FDIC up to the maximum allowed by law; deposit insurance only covers deposits in the Ramp Business Deposit Account in the event of the failure of the FDIC-insured bank.}