managing-treasury-management-services

# Managing Treasury Management Services

## When To Use

- Evaluating a client's existing treasury management product suite against operational needs and peer benchmarks
- Onboarding a new commercial banking relationship that requires cash management, payments, and liquidity structuring
- Conducting periodic fee optimization reviews on treasury service charges (account analysis statements)
- Assessing cash concentration, disbursement, or collection structures for multi-entity or multi-bank clients
- Coordinating RFP responses or bank relationship reviews involving treasury products

## Inputs To Gather

- **Account analysis statements** — most recent 3–6 months from each bank, showing service volumes, unit prices, earnings credit rate (ECR), and net fees
- **Bank account structure** — full map of accounts by entity, bank, currency, and purpose (operating, payroll, collections, concentration)
- **Cash flow profile** — average/peak daily balances, inflows/outflows by channel (wire, ACH, check, card), and seasonal patterns
- **Current product inventory** — list of active treasury services (lockbox, positive pay, ACH origination, zero-balance accounts, sweep/investment vehicles, commercial card programs)
- **Banking agreements** — master service agreements, fee schedules, and any negotiated pricing tiers or volume commitments
- **Pain points and priorities** — fraud concerns, reconciliation bottlenecks, payment timing issues, or technology integration gaps flagged by the treasury team
- **Organizational context** — number of entities, geographies, ERP/TMS systems in use, and any pending M&A or restructuring activity

## Workflow

1. **Map the current state**
   - Inventory all bank accounts and treasury products across institutions
   - Normalize account analysis data into a comparable format (AFP service codes where available)
   - Calculate blended ECR, total compensating balances, and hard-dollar fees per bank
   - Identify idle balances, redundant accounts, and underutilized products

2. **Benchmark pricing and structure**
   - Compare unit prices against industry benchmarks (AFP Treasury Benchmarking Survey, peer data) [VERIFY — benchmark source and vintage]
   - Flag line items priced above the 75th percentile or showing volume-price mismatches
   - Evaluate ECR against current Fed Funds / T-bill rates to assess balance compensation efficiency
   - Assess whether the client would benefit from hard-dollar pricing vs. balance compensation given their liquidity position

3. **Analyze product fit**
   - **Collections**: Evaluate lockbox vs. electronic (ACH/RTP) vs. card receivables; assess remote deposit capture usage and float implications
   - **Disbursements**: Review check volumes for ACH/virtual card conversion opportunities; assess positive pay and payee positive pay coverage
   - **Liquidity**: Evaluate sweep structures (repo, money market, notional pooling) against yield, FDIC coverage, and operational complexity
   - **Fraud prevention**: Confirm positive pay enrollment, ACH debit blocks/filters, and dual-authorization on wire/ACH origination
   - **Trade finance**: If applicable, review letter of credit, documentary collections, and supply chain finance programs [VERIFY — UCP 600 / ISP98 compliance requirements]
   - **Commercial card**: Assess P-card, T&E card, and virtual card penetration against addressable AP spend

4. **Develop recommendations**
   - Prioritize actions by estimated fee savings, operational efficiency gains, and fraud risk reduction
   - Quantify savings: project annual impact of pricing renegotiation, product migration, and balance redeployment
   - Propose account rationalization where redundant accounts or banks add cost without risk diversification value
   - Identify technology integration opportunities (ERP-to-bank connectivity, API-based payments, host-to-host vs. portal)
   - Outline an implementation timeline with bank coordination milestones

5. **Prepare the management report**
   - Executive summary with total current cost, recommended savings, and top-3 priority actions
   - Product-by-product analysis with current state, gap, and recommendation
   - Fee comparison matrix across banks (if multi-bank)
   - Recommended bank account structure diagram (if changes proposed)
   - Implementation roadmap with responsible parties and target dates

## Output

A **Treasury Management Services Report** containing:

- Current-state treasury product inventory and account structure map
- Account analysis fee summary with benchmark comparisons and savings opportunities
- Product gap analysis covering collections, disbursements, liquidity, fraud, and trade finance
- Prioritized recommendation list with quantified annual impact
- Implementation roadmap with milestones, dependencies, and bank coordination steps

## Quality Checks

- All fee figures reconcile back to source account analysis statements — no estimated amounts without [VERIFY] tags
- ECR and balance compensation calculations account for reserve requirements and FDIC assessment pass-throughs where applicable [VERIFY — bank-specific ECR methodology]
- Savings projections use conservative assumptions (e.g., current volumes, not projected growth)
- Product recommendations are validated against the client's ERP/TMS capabilities and bank connectivity options
- Fraud prevention coverage is assessed for every disbursement channel, not just checks
- Multi-bank recommendations address counterparty risk diversification, not just price optimization
- Report distinguishes between quick wins (pricing renegotiation, product activation) and structural changes (account rationalization, bank migration) with realistic timelines