This article is written by Nomentia
Treasurers have a love-hate relationship with guarantees. While they are usually not a big concern as long as there are few, managing hundreds or even thousands of various types of guarantees across different entities, guarantors, beneficiaries, countries, and therefore languages and jurisdictions can be a nightmare, especially without the right tools. Below, we provide insights into what managing guarantees actually means, what the challenges are when doing so and why doing it right equals less time spent and money saved. In the second part of this post, we provide an overview of the capabilities that modern, digital guarantee management solutions offer and their benefits.
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Guarantees facilitate trade by assuring the buyers/project owners (“beneficiaries”) that the guarantor, usually a bank or (credit) insurance company – will uphold a contract in case the seller/contractor (“the applicant” to the guarantee) is unable to do so. They are therefore a vital tool heavily used across sectors as varied as construction, facility management, manufacturing, and retail and across the different stages of a business transaction, from bidding for a project, the delivery of the goods or performance of the services to ensuring pre-agreed services during the warranty period. By committing to paying the agreed amount upon first demand by the buyer, the guarantor (usually a bank or credit insurer) assumes risk. Compensation for this risk is in the form of various guarantee-related fees. Also, guarantors usually only agree to assume a pre-defined amount of risk for any given company in the form of a pre-agreed guarantee facility. Against this background, it is obvious that managing large portfolios can be a challenge. Not only is the timely processing of guarantees from various facilities agreed upon with various banks, but sometimes hundreds, if not thousands, of different types of guarantees can be challenging.
Guarantee management means the management of all guarantees for a company. A guarantee itself is a way of showing a counterparty that you are a secure contracting party. The guarantee is set up with a third party, most often a bank. The bank acts as a mediator and becomes the guarantor as the guarantee transfers the applicant’s creditworthiness to the bank.
Companies that engage in substantial contractual agreements that can impact financial risk need to manage all the related guarantees, provided that a guarantee is issued. As a result, finance and treasury teams typically practice some form of guarantee management, for example, by keeping track of guarantees and status in spreadsheets to gain better control. It’s important to keep track of guarantees in order to move forward with agreements in a timely fashion and to control the costs and risks of agreements.
Another important aspect of trade finance is risk mitigation and settling any conflicts between trading partners. For example, the buyer usually wants to mitigate the payment risk and ensure security if, for some reason, the seller does not provide the agreed-upon goods or services. In contrast, the seller wants to mitigate supply chain risk. By using guarantees, companies minimize the risk in such situations and can move forward with agreements in a more secure manner.
Guarantee management traditionally implies a good amount of paperwork and manual spreadsheets where information about each guarantee is recorded and updated. The management is, in most cases, also decentralized, where every entity or subsidiary has its own ways of dealing with guarantees. As a result, there is much scattered data in various places, and processing guarantees become slow due to inefficiency and lots of required communication. Especially since several stakeholders are involved throughout a guarantee’s lifecycle, both internally and externally.
In practice, that implies that many emails need to be sent back and forth between people, and if various entities need to align on guarantees or a corporation decides to issue guarantees for its subsidiaries, there is no standardized process in place that streamlines the communication, guarantee status, or tasks for all stakeholders. Traditional setups are a nightmare for companies that process tens, hundreds, or thousands of guarantees.
Most companies that are looking to improve their guarantee management processes share the following common goals:
The aforementioned goals are paired with a desired state of guarantee management that is centralized in a digitalized environment. All employees responsible for guarantee management or those with a role in the guarantee lifecycle should be able to log on to that same system, regardless of whether they work for a corporate or a subsidiary. It’s just a matter of user management and ensuring that users have adequate permissions to view and edit the guarantees relevant to their jobs. Communication between colleagues and adjustments to guarantees should only be done in the same system. It should also be able to provide overviews of all guarantees and their statuses, as well as which guarantees require action to move them forward in the process.
On top of that, a guarantee management setup should be designed to be standardized for every bank. Typically, banks issue their own guarantee forms that all require information to be filled out slightly differently depending on which bank you are dealing with. This adds another layer of complexity and additional work to the process. Instead, digitalized tools can be used for creating standardized guarantee forms that can be sent to any bank, regardless of their requirements. By doing so, treasurers can save significant time because all guarantee applications follow the same standard digital format.
An example of the desired state of the guarantee management process looks similar to the illustration below. In brief:
Once a guarantee was issued, you need to deal with the associated fees. This involves breaking guarantee-related charges down into different classes for them to be calculated and allocated accordingly. The easier part is differentiating between issuing and amendment charges and minimum commissions. External charge classes can be used to check that the charges billed by banks and credit insurers are correct. With the help of internal charge classes, group treasury can identify the amounts that need to be forwarded to the relevant subsidiaries. Once automated, this will save the accounts department a considerable amount of work related to booking guarantees and setting up accruals, and it will allow the treasury department to analyze the utilization of guarantee lines directly in the system.
Keep in mind that the desired state works so that all guarantees in different lifecycle stages can be tracked so that you have a complete overview of which guarantees are in what stages. Another important factor in efficiency is streamlining communication processes. Ideally, all communication is done through the same platform. For example, you should be able to comment on specific guarantees, and the relevant users should receive notifications when action is required from them, or when messages concern them.
Some systems, like Nomentia’s, also offer extensive add-ons that tackle guaranteed invoicing. Some of the following invoicing features can help improve the process:
All the steps mentioned above in a desired guarantee management setup can be realized with software. Software also offers many other benefits. These are some of the critical benefits that a solution like Nomentia Trade Finance provides:
To illustrate how optimal processes can benefit companies, here are a few examples of the customers that we have helped with trade finance and guarantee management:
Bertelsmann SE & Co.KGaA, the largest media group in Europe, uses Nomentia Trade Finance to automate issuing invoices for guarantee-related charges and commissions. They also decreased the treasury workload due to the centralized management of data by subsidiaries and automated processes related to data-input reminders. Now, Bertelsmann’s treasury team can also run extensive analyses based on group-wide guarantees.
DNV GL, a provider of technical assurance, advisory, and software in maritime, oil & gas, and other industries, uses Nomentia Trade Finance to centrally track guarantees and manage the end-to-end lifecycle from request to derecognition and everything in between, including associated reporting on the guarantee portfolio and related fees. As part of a project that was started in 2022/2023, DNV is extending the solution to also cover the guarantee-related communication flow with banks using SWIFT MT-messages.
To summarize, companies managing a large portfolio of guarantees that are still relying on legacy processes based on reams of paper and large Excel sheets have a lot to gain from transitioning to a digitalized process. By centrally tracking and managing group-wide guarantees digitally, leveraging smart workflows involving all relevant stakeholders based on optimal processes and stakeholder management, Treasury and finance professionals should look into how they can. Most companies resort to guarantee management software to maximize control and efficiency. In the end, we recommend talking to other companies or one of our guarantee management experts, they can advise you on how to improve your current setup.
By Alexander von Schirmeister,
CEO at Nomentia
A bank portal still works. The ERP still produces data. A spreadsheet still calculates a forecast. A payment approval workflow still moves from one person to the next. Reports still reach the CFO, even if they arrive later than expected. From the outside, treasury appears to function. Inside the process, finance teams know exactly how much effort is required to keep that appearance of control intact.
Modern treasury cannot rely on disconnected systems because the questions it needs to answer are no longer isolated. Cash visibility depends on bank data, account structures, ERP information, payments in progress, forecast inputs, intercompany flows, financing activities, and exposures. Liquidity planning depends on operational data from the business, but also on treasury assumptions, market conditions, working capital movements, and funding plans. Risk management depends on reliable exposure data, but also on trade execution, hedge documentation, limits, reporting, and accounting. If each part of this picture sits in a different place, the treasury team becomes the integration layer.
That integration work rarely surfaces. It lives in copy-and-paste routines, manual file checks, email reminders, reconciliation notes, spreadsheet tabs, and individual memory. It is also where most treasury management challenges quietly begin.
Disconnected systems create time loss because data has to be gathered before it can be analysed. They create duplicated work because teams maintain local trackers even when central tools exist. They weaken cash visibility because the latest view may depend on which bank file has arrived or which entity has responded. They weaken controls because exceptions are harder to identify when workflows are not connected.
The CFO does not usually see the process friction. The CFO sees the answer. If the answer is late, inconsistent, or hard to explain, confidence falls. Senior leadership needs reliable responses to simple but high-stakes questions: How much liquidity is available? Which cash flows are expected? Where is working capital tied up? Are internal payments efficient? Which exposures are material? Are guarantees, hedges, and commitments under control? These questions cannot be answered well when the data behind them has to be rebuilt every time.
The 2026 Nomentia Treasury and Cash Management report highlights that many treasury teams are in a transitional phase. They have moved beyond purely manual treasury, but still rely on multiple systems and partial automation. The pattern is familiar: the organisation has invested in technology, yet treasury still spends too much time reconciling information and validating reports. The issue is not that systems are missing. The issue is that they are not connected enough to support the pace of decision-making.
Disconnected systems are especially risky in three areas.
The first is visibility. If cash positions, transactions, forecasts, and payment statuses are not consolidated, treasury may see parts of the picture but miss the direction of movement. A balance report can show where cash is today, but it does not explain whether the position is temporary, restricted, exposed, or needed elsewhere in the group. Visibility without context can create false comfort.
The second is control. Treasury policies often look clear on paper, but control depends on how processes actually run. Who can approve a payment? Which entities have followed the forecast process? Which exposures have been validated? Which guarantee is close to expiry? Which hedge relationship needs attention? When workflows are disconnected, control becomes dependent on manual follow-up. That may work when volumes are low, but it becomes unreliable as banks, entities, instruments, and reporting expectations increase.
The third is decision speed. In volatile markets, delayed answers are not neutral. A late forecast can affect funding decisions. A delayed exposure view can affect hedge timing. A slow payment status check can affect supplier confidence. A late view of guarantees or credit line usage can affect working capital decisions. Treasury does not need real-time data for every decision, but it does need enough connected information to avoid making decisions with yesterday’s understanding.
A modern treasury management system should not be judged only by feature breadth. The more important question is how well it reduces the gaps between systems, data, workflow, and reporting. A strong setup connects bank information, ERP data, payment processes, cash forecasting, risk workflows, analytics, and audit trails into a reliable operating model. That does not mean every company needs every module at once. It means the architecture should support growth without forcing the team to rebuild its processes every time complexity increases.
Most people researching a TMS today will start with a web search or ask Copilot, Gemini, or ChatGPT. The answer they get back is usually a feature list. That’s not wrong, but it’s incomplete. A good treasury management system helps finance teams centralise cash, payments, forecasting, risk, controls, and reporting so they can make better liquidity and financial risk decisions with trusted data. Features are how it gets there. That’s the distinction worth keeping in mind when evaluating whether your current setup is still fit for purpose.
The path away from disconnected systems does not always require a large replacement project. In many organisations, the better approach is to identify the most painful manual bridges first. Where does treasury re-enter data? Where does the team wait for local input? Where do reports need manual explanation? Where are approvals outside the system? Where is the same number calculated in different ways? These questions show where fragmentation is creating the most business risk.
Connected systems create reliable answers. They reduce the manual work behind cash visibility, improve the quality of cash flow forecasting, and support stronger controls and compliance. They help the CFO understand not only what the numbers are, but what they mean for liquidity, risk, and action. Disconnected systems may still function. But they make treasury work harder than it should, and confident decisions harder than they need to be.
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This article is written by TreasuryCube
In an increasingly complex financial environment, In-House Banks (IHBs) have emerged as a strategic imperative for corporations seeking enhanced cash visibility, optimized liquidity, and streamlined intercompany transactions. Drawing insights from a recent presentation by experts at Citi and seasoned treasurers, let’s explore what makes an IHB not just an option, but a cornerstone of modern treasury management.
An IHB is a centralized internal financial entity that manages cash, investments, foreign exchange exposures, and intercompany lending on behalf of corporate subsidiaries. Acting as a “virtual bank” for the organization, it reduces the volume of external banking transactions and provides critical advantages in cash management, governance, and compliance.
Importantly, an IHB is not a regional treasury center, shared service center, re-invoicing hub, or physical licensed bank. It’s a bespoke solution that integrates deeply with corporate finance operations.
An IHB addresses several core challenges that treasurers face:
Real-world IHB implementations, like those led by Brook Ballard at Oceaneering, showcase the tangible benefits:
Intercompany netting further reduces payment transactions, bank fees, and FX costs by consolidating cross-border intercompany settlements.
While beneficial for many, IHBs are particularly advantageous for:
At TreasuryCube, we recognize that the modern treasury is not just about managing cash, it’s about unlocking strategic value. An effective IHB is a critical tool to help achieve that vision, especially when supported by integrated technology, skilled people, and proactive governance.
Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click the button below.
This article is written by our partner, FIS
The reality of payment fraud has shifted from a question of whether an attack will occur to a growing likelihood of when and how it will occur.
For finance and treasury leaders, the strategies that provided a sense of security a few years ago may be insufficient against a new breed of sophisticated and relentless criminals. A 2024 survey from the Association for Financial Professionals underscored this reality, revealing that a staggering 79% of organizations were victims of payment fraud attacks or attempts.
This is not a distant risk: It’s an active, daily threat that demands a fundamental change in an institution’s defensive posture. The traditional, reactive approach – detecting and responding to fraud after it occurs – is, in many cases, no longer a viable strategy. The time has come to build a proactive defense.
Today’s fraudsters are often not lone actors but organized, well-funded operations that use advanced technology and psychological tactics. They study organizational structures, identify process gaps and exploit the path of least resistance.
Business email compromise remains a dominant method, where criminals impersonate executives or vendors with alarming authenticity to redirect funds. We’re also seeing the rise of AI-powered deep fakes, where a trusted voice on a conference call can be convincingly spoofed to authorize a fraudulent transfer.
These criminals understand that the entire payment lifecycle, from the initial onboarding of a vendor to the final reconciliation, presents a landscape of opportunity. They target the seams in your processes, exploiting the very human desire for efficiency and speed. This “disharmony,” a term coined by a FIS® and Oxford Economics study, captures the friction between the drive for growth and the drag of persistent security threats.
According to the study, 75% of C-suite executives identify fraud as a critical challenge.
How can organizations overcome the evolving threat of fraud? The answer lies in shifting from a fragmented, manual and reactive stance to an integrated, automated and proactive one.
A truly effective defense begins by fortifying the most common entry points. The vendor master file, for instance, is the heart of the payables process and a prime target. A single fraudulent change to a supplier’s bank details can lead to catastrophic losses before anyone realizes an error has occurred.
Overcoming this type of threat typically requires more than just diligence: It often demands a standardized, technology-enforced process. It includes implementing out-of-band verification, such as a phone call to a preverified contact, for any change to payment instructions. It means moving beyond trust and implementing strict, automated validation protocols.
As transaction volumes grow, manual reviews can become an impossible bottleneck, creating the very noise that criminals use to hide their illicit activities. This is where modern solutions like AI-assisted anomaly detection become increasingly indispensable.
Unlike static, rule-based systems that can only catch what they are programmed to look for, AI and machine learning establish a baseline of “normal” payment behavior for each vendor and transaction type. These systems operate in real time, analyzing payments for subtle deviations in amount, frequency or timing that would be difficult for the human eye to detect. When an anomaly is detected, the payment is automatically flagged for investigation before it leaves the organization. This preemptive capability is a game changer.
Organizations can achieve a greater level of control by consolidating their payment flows through a centralized payment hub. Instead of managing disparate security protocols across multiple ERPs and bank portals, a payment hub provides a more unified point of visibility and control.
A payment hub enables the consistent application of security policies, approval workflows and fraud detection analytics across the entire enterprise. It standardizes an institution’s defense, creating a fortress rather than a series of disconnected fences. A payment hub integrated with a third-party account validation service provides another critical layer, confirming that a beneficiary’s name matches their account information before a payment is ever initiated.
Reduce fraud risk and strengthen controls with FIS Payment Hub – Enterprise Edition
The path forward for finance and treasury leaders requires a strategic pivot. It means recognizing that fraud prevention is not merely a compliance checkbox but a strategic enabler of business resilience and growth.
Building a proactive defense involves a holistic approach that integrates advanced technology, standardized processes and a culture of vigilant verification. By embracing AI-driven monitoring, centralizing payment operations and empowering employees with specialized training, you can transform your security posture from reactive to preemptive.
This shift does not just mitigate risk: It builds the confidence and operational integrity necessary to thrive in a complex financial world.
Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click the button below.
