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11–19 Install a Treasury Workstation
and investment firms on a daily basis. In addition, any changes that result from this
analysis, such as the centralization or investment of cash, must be manually
shifted to the general ledger. Given the highly manual nature of these tasks, this
frequently results in errors that must be corrected through the bank reconciliation
process. A treasury workstation can greatly reduce many of these work steps.
A treasury workstation is a combination of hardware and software that will
manage cash, investments, debt issuance and tracking, as well as provide some
risk analysis functions. It is an expensive item to purchase, typically ranging
from $30,000 for a bare-bones installation to $300,000 for a fully configured one.
The difference between these prices is the amount of functionality and bank
interfaces added to the treasury workstation—if a buyer wants every possible fea-
ture and must share data with a large number of financial suppliers, then the cost
will be much closer to the top of the range. Given these costs, this best practice is
not cost-effective for companies with sales volumes under $50 million. Also,
because of the large number of interfaces needed to connect the workstation to
other entities, the installation time can range from one to nine months.
Why spend so much money and installation time on a treasury workstation?
Because it automates so much of the rote finance tasks. For example, if an employee
enters an investment into the system, it will create a transaction for the settlement,
one for the maturity, and another for the interest. It will then alter the cash forecast
with this information, as well as create a wire transfer to send the money to an
investing entity. Here are some of the other functions that it can perform:
• Bank reconciliation. It can do the bulk of a bank reconciliation, leaving just a
few nonreconciling items to be resolved by an employee.
• Cash forecasting. It can determine all company cash inflows and outflows
from multiple sources in order to derive a cash forecast.
• Cash movement. It can originate electronic funds transfers.
• Debt tracking. It can follow short-term debt with a link to a dealer-based
commercial paper program.
• Financial exposure. It can identify and quantify financial exposure.
• Foreign exchange. It can determine a company’s cash positions in any cur-
rency.
• Investment tracking. It can track and summarize a company’s investment
positions in money markets, mutual funds, short-term and fixed-income
investments, equities, and options.
• Risk analysis. It allows an employee to use it as a giant calculator, perform-
ing “what if” analyses with yield-curve manipulation and scenario analysis.

Based on this lengthy list, it is evident that a large company can derive a suf-
ficient benefit from a treasury workstation to offset its substantial cost. For more
information about treasury workstations, contact any of the following workstation