Especially in times of rising interest rates, it is important for finance managers to keep track of ongoing financing arrangements and, in particular, those approaching maturity. Following the prolonged period of low interest rates, awareness of this issue has declined in many companies. At the same time, the COVID-19 crisis may have reduced earnings, while the number of banking relationships may have been reduced to a minimum in order to cut costs. These circumstances limit the scope for decision-making regarding refinancing, which, particularly under time pressure, can result in unnecessarily high financing costs.
Such situations can be avoided by maintaining liquidity and financial planning with an appropriate lead time:
Sufficient lead time based on complete information not only helps identify additional financing requirements at an early stage, but may also allow further alternatives to be considered, for example by obtaining competing offers.
The same applies to cash and capital investments, where early enquiries can also lead to improved returns.
A particular advantage of Trinity TMS is that financing and investment opportunities can also be offered to the company’s own entities through the in-house bank. Local users communicate their requirements to central treasury and generally receive better terms than those available from external counterparties. Central financial management retains a complete overview of all receivables and liabilities, can apply market-based interest rates, arrange external refinancing and temporarily invest surplus funds.
Trinity TMS generates interest and repayment schedules for all credit facilities and loans. Variable-rate loans are valued on the basis of automatically imported interest rates, with the option to include valuation adjustments such as CVA and DVA, which supplement market price risk by incorporating counterparty default risk. In the case of syndicated financing arrangements, the Treasury Management System supports the management of the individual participations within the syndicate.
All cash flows arising from financial transactions are immediately reflected in the daily cash position without the need for duplicate data entry and are available for a wide range of analyses. Loan agreements can be attached to the financial transaction as documents or generated directly from the system, for example as master agreements for intercompany loans. Loans can be assigned to any number of portfolios, while ESG criteria and other classifications can be recorded and analysed individually.
Payment transactions, interest, accruals and valuations can be transferred to financial accounting for automatic posting via the account assignment module.
