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Treasury dashboards as an integral part of the reporting operation

Treasury dashboards as part of the reporting operation

What's behind it?


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The all-pervasive digital transformation of our world is leading to optimisation and automation of many treasury processes too. These naturally include the treasury reporting function, and not only change its visual presentation and functionality, but its analysis capabilities too. So-called management dashboards based on modern business intelligence (BI) solutions are increasingly being used for reporting in other areas, such as controlling. In contrast with static printed reports, dashboards can be used interactively at the management level too. What this means for treasury in particular is discussed in detail in this article.

The starting point

In most treasury departments, management reports are still being disseminated in printed form or by email with a PDF attachment. Such a reporting system makes it more difficult for the report creator(s) and the recipient(s) to interact with each other. Queries generally get addressed to the creator of the report. This usually involves a great deal of work and consequently longer turnaround times until the posed question is answered. This not only takes time, but in critical situations can lead to measurable costs being incurred: It's only possible to make appropriate, timely decisions relating to market and internal developments if the necessary reporting data can be interpreted quickly and without error.

Treasury departments regularly deal with such questions as:

  • Where does the liquidity change in the forecast for the previous month come from?
  • Why is our US dollar exposure higher this year?
  • What is the background to the posted interest income?

Clarifying any questions that arise often requires dialogue between management and the report creator e.g. the middle office, and frequently needs a subsequent analysis to be performed in the source system. Half a day can quickly go by before even simple questions are resolved.

This can all be understood when one considers that in the past, the technical environment was not able to support such features and optimising these processes was not an economically viable proposition. But times have changed.

What opportunities do BI-based dashboard solutions offer?

A management dashboard not only allows information from a standard reporting system to be displayed, but follow-up questions to be interactively addressed and an overview of the most important information to be provided. From there, the user can drill down by mouse to get more detail. An aggregated net financial position across all companies can be broken down according to individual regions or even entities, to give just one example. As a result, many questions can be answered much more quickly and intuitively at the management level. Questions that cannot be answered via the dashboard can at least then be posed in a much more explicit and qualified manner and subsequently answered more efficiently.

The underlying BI system enables data from the treasury management system to be linked to ERP data using an automated process in order to calculate performance indicators, for example. Data transfer and validation is largely taken care of by the software, which leaves far more time for the qualitative interpretation of the data.

The use of a dashboard in treasury can be limited to those departments where calculated and aggregated financial indicators and key performance indicators (KPIs) are part of the reporting function, i.e. primarily the middle office. On the other hand, it is not really suited for use in compliance reporting, for instance, where the emphasis is less on the multidimensional analysis of dependencies across several layers of data, but rather on ensuring the completeness/accuracy of all necessary records and/or checks that have been performed and publishing them in a format prescribed by an (internal/external) third party, e.g. as with EMIR reporting.

The numerous graphical and dynamic visualisation possibilities offered by modern reporting tools are generally helpful wherever financial indicators and KPIs are reported. They are especially revealing when they can be juxtaposed with other variables or even allow flexible scenarios to be examined. In this way, the expected available liquidity can be determined dependent on various operational scenarios, such as higher cash inflow from sales and thus higher outflows in the form of payments to suppliers and input tax. Depending on how comprehensive the underlying data model is, it is even possible for the management to conduct sensitivity analyses in the risk management area. The aspect of the underlying data model that makes it a success is simultaneously its limiting factor, something that will be examined more closely in the next section.

The quality of the data model is crucial to the usefulness of a dashboard

The creation process in traditional reporting usually involves one or more data validation steps. The use of a dashboard relies on the provided data being usable at any given point in time. This has substantial implications for the required quality of the entire data model, including all linked data sources. It also sets high standards with respect to the robustness of the master data processes and the hygiene of the transactional treasury management system.

Confidence in the dashboard data is a key factor in the survival of this tool. If, for example, the displayed liquidity balance is not correct due to the master data not being up to date, there is a danger that manually validated standard reports will quickly be reverted to.

What are the limitations of a BI-based dashboard solution?

The modern design and dynamic handling of a management dashboard makes it very appealing at first. The questions treasury has to deal with are often the same, but only within a certain time period. Sometimes liquidity is the topic of the moment, sometimes interest risk, then counterpart risk etc. A dashboard solution lets the user analyse the data along pre-defined paths. It's easy to re-design the dashboards using the existing performance indicators and dimensions. Adding new performance indicators or dimensions to the database usually involves an appreciable effort, though. Correspondingly, a solution is limited in its area of application if the underlying data model is not flexibly designed, meaning the reporting front end can only be configured to handle new queries with considerable effort and perhaps only with IT skills.

BI solutions can reduce the manual input required to extract, validate and supply data. Dashboards can offer users the possibility of analysing existing data very quickly and intuitively. How the data is then interpreted is down to the user, of course. Highly complex questions such as "what will Brexit mean for our FX exposure" cannot be readily answered via a dashboard. The qualitative interpretation of the data should still be performed by experts from the competent department. Thanks to automated management reporting processes, the use of BI-based dashboards means there's more time to deal with these sorts of issues, though.

The fact that the potential offered by such systems is not yet being exploited everywhere is more often than not because using interactive reporting tools like a management dashboard would require a radical change in the reporting cycles and decision-making routes. Abandoning familiar processes and adopting a new approach is often a challenge. Because the time and place the information is transmitted shifts from the operational level to the management level, as the management accesses the information on the dashboard directly.


Management dashboards offer many benefits for treasury management: Direct, dynamic reporting without time being spent on preparation as the basis for timely and sound decisions. All at a reasonable cost and as an essential condition in an ever more automated process world. It goes without saying that management has to be prepared to undergo a paradigm shift - then again, it's management that's driving the digital transformation, isn't it?

You can discover more about using treasury dashboards by visiting the following link.

Source: KPMG Corporate Treasury News, Edition 76, February 2018
Author: Börries Többens, Senior Manager, Finance Advisory, 

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