Treasury Outsourcing: Why It’s a Game-Changer for Businesses

February 19, 2025

Treasury Outsourcing: Why It’s a Game-Changer for Businesses

In today’s changing business environment, organizations face demands to enhance effectiveness and flexibility while cutting costs. Treasury operations are crucial but can also be laborious and intricate, making them ideal for outsourcing. For companies seeking to enhance their treasury functions, treasury outsourcing provides an approach that ensures efficiency and substantial cost reductions.

At FTl Treasury, we focus on assisting companies in realizing the capabilities of outsourcing treasury services. This piece will delve into the impact of treasury outsourcing, present practical case studies, and elucidate how it can enable your company to reach its financial and strategic objectives.

What does Treasury Outsourcing entail?

Outsourcing treasury functions entails assigning treasury tasks like cash management and foreign exchange risk management to a third-party provider.This enables companies to concentrate on their strengths while leveraging the knowledge and resources of a dedicated treasury partner.
Services commonly provided in outsourced treasury management include;

  • Managing cash on a basis.
  • Projecting cash flow and overseeing liquidity
  • Netting transactions between companies
  • Managing loans between companies
  • Managing the risks associated with exchange (FX).
  • Documenting transactions and summaries

By delegating these responsibilities to parties companies can improve their operations, mitigate risks, cut expenses and gain better insights into their finances.

Why Treasury Outsourcing Is a Game-Changer

1. Access to Expertise

Outsourcing treasury processes provides access to a team of seasoned professionals with deep knowledge of treasury operation, treasury systems, and best practices. This expertise ensures your treasury operations are not only compliant but also optimized for efficiency and accuracy.
For example, a company with complex FX exposure can rely on an outsourcing provider to develop and execute effective hedging strategies, mitigating currency risks and stabilizing cash flows.

2. Cost Efficiency

Maintaining an in-house treasury function can be costly, requiring significant investment in technology, staff, and ongoing training. Outsourcing eliminates these overheads, offering a more cost-effective solution that scales with your business needs.
One of our clients, a mid-sized manufacturing firm, reduced their treasury operating costs by 30% after outsourcing their cash management and reporting functions to FTI Treasury. This freed up resources for other strategic initiatives.

3. Enhanced Technology and Automation

Treasury outsourcing providers leverage cutting-edge technology, such as Treasury Management Systems (TMS) and RPA-driven analytics, to streamline processes and deliver real-time insights. For organizations without the budget to invest in these tools, outsourcing offers an opportunity to benefit from state-of-the-art solutions without incurring additional capital expenses and the risk associated with complex implementation projects.

4. Improved Risk Management

Outsourcing partners are well-versed in identifying and mitigating financial risks, including liquidity risks, counterparty risks, and compliance risks. By implementing robust controls and processes, they help safeguard your organization from potential financial disruptions.

5. Scalability and Flexibility

As businesses grow and evolve, their treasury needs often become more complex. Treasury outsourcing offers the flexibility to scale services up or down based on your organization’s requirements. This adaptability ensures your treasury function remains efficient and aligned with your goals, regardless of changing market conditions.

6. Focus on Strategic Priorities

By outsourcing routine and administrative treasury tasks, your in-house team can focus on higher-value activities, such as strategic planning, capital allocation, and stakeholder engagement. This shift enables your treasury function to act as a true strategic partner to the business.

Practical Example: A Success Story

A multinational corporation operating in the Medical devices sector faced challenges managing its international treasury operations across multiple regions. The daily management of cash pooling and liquidity structures caused significant difficulties from a resource perspective and there were inefficiencies created by the non-settlement of intercompany invoices.

By partnering with FTI Treasury, they:

  • Implemented a structured daily cash management process across multiple banks and liquidity structures, managed by FTI and providing significant centralised funds for deployment across the group.
  • Implemented an intercompany netting solution fully managed and implemented by FTI resulting in the regular settlement of intercompany invoices and resulting in estimated savings of circa USD10million per annum.
  • Implemented a centralised in-house banking structure managing all intercompany loans and associated FX exposures.
  • Deployed a group wide cash forecasting solution fully integrat6ed with banking and ERP systems. FTI implemented this solution, provided the technology infrastructure required and managed the systems integration. FTI manages the forecasting process on behalf of the client giving cash visibility and facilitating both short term and long term capital planning.
  • Streamlined compliance reporting, ensuring timely and accurate submissions.
  • Implemented a robust centralise FX hedging strategy reducing currency risk and cost.

The result? A more agile, efficient treasury function that supports the company’s global growth strategy.

Ways, in which FTI Treasury could be of assistance

We, at FTl Treasury are dedicated to assisting companies in unleashing the capabilities of outsourcing treasury services. Heres how we bring value;

  • We offer a range of services that cover everything from predicting cash flow to managing risks and ensuring compliance with regulations. All designed to meet your requirements.
  • Our team of professionals offers advice and insights gained over many years in the field of treasury management to guarantee that your operations are handled with care and expertise.
  • We utilize state of the art TMS and automation software to provide real time analysis and enhance your treasury operations.
  • We recognize that each company has its identity and needs that’re distinct, from others. Our solutions are tailored to match your goals and address the challenges and regulations of your industry.
  • Our main goal is to achieve results that can be measured. Ranging from saving costs and minimizing risks to enhancing transparency and facilitating informed decision making.

Outsourcing treasury functions goes beyond cost cutting; it serves as a tool that allows companies to enhance operational efficiency and minimize risks while fostering sustained growth and prosperity for the long term. By teaming up with a partner such, as FTI Treasury Services Ltd. you can tap into their knowledge base and customized solutions to elevate your treasury operations into a catalyst, for expansion and development.

Interested, in discovering the advantages of outsourcing treasury services? Get in touch, with FTI Treasury now to discover how we can assist your business in reaching its objectives. Receive updates from us by signing up for our newsletter to gain access, to insights from experts and stay informed about trends, in treasury management – together we can shape the future of your business!