Managing a Corporate Treasury Department · 2018-04-14 · • Becomes a focal point for risk...

Managing a Corporate Treasury Managing a Corporate Treasury DepartmentDepartment

Session 1: Treasury Scope and ObjectivesSession 1: Treasury Scope and Objectives

A Presentation to theA Presentation to theNew York Cash ExchangeNew York Cash Exchange

bybyBruce C. Lynn, CTP Bruce C. Lynn, CTP

June 2, 2017June 2, 2017

6/2/176/2/17 ©© The Financial Executives Consulting Group LLCThe Financial Executives Consulting Group LLC 11

Agenda Agenda –– Part 1Part 1

The traditional role of corporate treasuryThe traditional role of corporate treasury Why treasuryWhy treasury’’s scope needs to changes scope needs to change Key policies and procedures for the modern Key policies and procedures for the modern

treasury functiontreasury function Best practices for the modern global Best practices for the modern global

corporate treasurycorporate treasury Making it happen Making it happen –– how to transition from how to transition from

traditional to modern (Session 2)traditional to modern (Session 2) Q & A, discussionQ & A, discussion


RiskMgt

(Mkt, Credit, Ops)

Cash Accounting(focus on posting, reconciling transactions)

DebtInvestment

Cash Management(focus on balances)

The Traditional TreasuryThe Traditional Treasury• Focused on Processing

• Resources devoted to repetitive tasks

Basic

AdvancedGoals

Cash

Processing

Planning


The Traditional Treasury (2)The Traditional Treasury (2)

28

47

49

51

55

58%

2014

283732Income Generation

634655Capital Structure Support

384239Risk Management Effectiveness

534349Reduced Banking Expenses

665762Liquidity Targets

695763Reduced Borrowing Costs

Sales> 1Bn

Sales < $ 1Bn

2017All

Key Metrics Used Treasury Department Success

Source: AFP 2017 (344 responses) p10, p11, p24 / 2014 p11, p12 (243 responses) Strategic Role of Treasury Surveys

• Metrics are mostly P & L oriented• 51% of Treasuries feel organization NOT using its capabilities*• 36 % Treasuries NOT part of executive committee or “C suite”*


The Traditional Treasury (3)The Traditional Treasury (3)

Source: 2017 AFP Strategic Role of Treasury Survey, p3


The Traditional Corporate Treasury The Traditional Corporate Treasury (5)(5)

Daily cash management operationsDaily cash management operations•• Obtain yesterdayObtain yesterday’’s bank transaction data, identify s bank transaction data, identify

exceptions, update A/R and A/P recordsexceptions, update A/R and A/P records•• Prepare todayPrepare today’’s cash worksheet, identify s cash worksheet, identify

borrowing/investment levels, execute transactionsborrowing/investment levels, execute transactions•• Heavy transaction processing workloadHeavy transaction processing workload

Bank Relationship ManagementBank Relationship Management•• Maintain lists of banks, contacts and accounts Maintain lists of banks, contacts and accounts •• Periodically review / negotiate credit facilitiesPeriodically review / negotiate credit facilities•• Monitor activity / fees via account analysesMonitor activity / fees via account analyses


The Traditional Corporate Treasury (The Traditional Corporate Treasury (66)) International SupportInternational Support

•• Execute FX spot and forward transactionsExecute FX spot and forward transactions•• Assist foreign units to set up pools, netting, etc.Assist foreign units to set up pools, netting, etc.•• Managed as a separate unit within TreasuryManaged as a separate unit within Treasury•• Limited knowledge of tax impacts of treasury activitiesLimited knowledge of tax impacts of treasury activities

Capital MarketsCapital Markets•• Support CFO in negotiations for public debt issuesSupport CFO in negotiations for public debt issues•• Limited knowledge of alternative markets / instrumentsLimited knowledge of alternative markets / instruments•• Intercompany borrowing opportunistic and uncoordinatedIntercompany borrowing opportunistic and uncoordinated

Treasury personnel have limited experienceTreasury personnel have limited experience•• Treasury staff recruited from banking/cash/accounting Treasury staff recruited from banking/cash/accounting

background; mostly domestic, not involved in the businessbackground; mostly domestic, not involved in the business•• Promotion usually internal; Treasury staff have low visibility Promotion usually internal; Treasury staff have low visibility

and rarely move into nonand rarely move into non--financial functionsfinancial functions


The Traditional Corporate Treasury (The Traditional Corporate Treasury (77))

Bottom lineBottom line•• Treasury viewed as a processing (not strategic) Treasury viewed as a processing (not strategic)

unit; costunit; cost--center (not a value adding function)center (not a value adding function)•• Limited planning or policy responsibilitiesLimited planning or policy responsibilities•• Problems are solved rather than preventedProblems are solved rather than prevented•• Highly dependent on spreadsheets, emails and Highly dependent on spreadsheets, emails and

multiple bank systemsmultiple bank systems Treasury systems not priority for corporate IT Treasury systems not priority for corporate IT No integrated views of global cash position or No integrated views of global cash position or

future liquidity needs (i.e. forecast)future liquidity needs (i.e. forecast)•• Low headcount Low headcount -- ““outgunnedoutgunned”” by Controllers or by Controllers or

other financial or operating unitsother financial or operating units


Why Treasury needs to changeWhy Treasury needs to change External factorsExternal factors

•• Competitive nature of business Competitive nature of business –– 24/7 demand for 24/7 demand for ““global global cash visibilitycash visibility”” and liquidity alternatives in the capital and liquidity alternatives in the capital markets (e.g. do I have enough of the markets (e.g. do I have enough of the ““rightright”” credit?)credit?)

•• More interaction with key corporate customers More interaction with key corporate customers –– ““my AR is my AR is your APyour AP””; not all customers are profitable; not all customers are profitable

•• More competitive/complex/unpredictable financial marketsMore competitive/complex/unpredictable financial markets Volatile FX and interest rates, leasing, ARS, credit crunch Volatile FX and interest rates, leasing, ARS, credit crunch

dislocationsdislocations

More complex transactions More complex transactions -- Derivatives expand the scope for Derivatives expand the scope for propro--active management of FX, interest costs, commoditiesactive management of FX, interest costs, commodities

Activist investors Activist investors -- seek seek ““bestbest”” use of cash or give it backuse of cash or give it back

•• Regulatory or accounting changes, e.g. Brexit, Basel III Regulatory or accounting changes, e.g. Brexit, Basel III (liquidity ratios), Rev. recognition, Reg 385 (I/C lending)(liquidity ratios), Rev. recognition, Reg 385 (I/C lending)


Need for Change Need for Change –– External TrendsExternal TrendsFed funds rate will increase if next Fed Chair taller than Janet Yellen


Need for Change Need for Change –– External TrendsExternal Trends

LIBOR now 118BPWhat next when LIBOR goes to

“normal” or 3 - 5X today?



Today: 355BPWhat next when yield goes to “normal” or

> 50% higher than today?



20 May 2017: Euro = $1.12Good news for some?

Oct 2016 = $1.08 (plan rate?)


Why Treasury needs to change Why Treasury needs to change (2)(2) Internal factorsInternal factors

•• International business and the associated FX risks have International business and the associated FX risks have increased and have become more visibleincreased and have become more visible

•• 70+% Senior Management seeks focus on liquidity, risk and 70+% Senior Management seeks focus on liquidity, risk and working capital management (per 2017 AFP survey)working capital management (per 2017 AFP survey)

•• Quality of a companyQuality of a company’’s financial management is increasingly s financial management is increasingly recognized as a key competitive factorrecognized as a key competitive factor

•• Skills from FX hedging programs can be applied to other risk Skills from FX hedging programs can be applied to other risk management issuesmanagement issues

•• Keeping up with the competitionKeeping up with the competition Improving market means acquisition price increases?Improving market means acquisition price increases?

Best use of funds Best use of funds -- CAPEX vs Debt Repay? CAPEX vs Debt Repay?

Cash Cash -- Use it or Use it or ““loselose”” it (i.e. payouts to investors) it (i.e. payouts to investors)


Need for Change Need for Change –– Internal TrendsInternal Trends

More cash to More cash to Investors :Investors :

less less ““left overleft over””??


Snapshot - S & P 500 Non Financial Companies (427 co.)(Selected Results - 12 months ending 3/31/17)

3867

1

88

188

76

201167

622

26 14

161199

4

315

457

312

421

1,136

574

127

550

8 220 18

48

-12

6593

147

7

-26-100

100

300

500

700

900

1,100

1,300

01 -

Bas

ic M

ater

ials

02 -

Cap

ital G

oods

03 -

Con

glom

erat

es04

- C

onsu

mer

Cyc

lica

05 -

Con

sum

er N

on-C

yclic

06 -

Ene

rgy

08 -

Hea

lth C

are

09 -

Ser

vices

10 -

Tec

hnolo

gy

11 -

Tra

nspo

rtatio

12 -

Utili

ties

$ in M

illions

Cash + S/T Inv Q1 Total Debt S/T + L/T Q1 Free Cash Flow 12Months

Need for Change Need for Change –– Internal TrendsInternal TrendsHow much risk (debt / free cash flow) is How much risk (debt / free cash flow) is ““too muchtoo much””??

Varies by Industry:Tech = ok. Services? Utilities?


S & P Non Financial Companies (428 companies)Quarterly Trends as of 3/31/17

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

QTR8 QTR7 QTR6 QTR4 QTR5 QTR3 QTR2 Mar-17

$ in

Billio

ns

0

20

40

60

80

100

120

140

160

Free

Cas

h Fl

ow ($

in B

illio

ns)

Cash & S/T Equiv. Total Debt EBITDA Free Cash Flow

Need for Change Need for Change –– Internal TrendsInternal TrendsTreasury to CFO: How much cash is Treasury to CFO: How much cash is ““enoughenough””??

Cash trend flat; free cash flow trend down. How much cash is enough?

Debt

Cash


Why Treasury needs to change Why Treasury needs to change (4)(4)

Consider this near term scenario :Consider this near term scenario :•• Your competitor has highest cash levels in 5 Your competitor has highest cash levels in 5

years giving them CAPEX, R & D optionsyears giving them CAPEX, R & D options•• Your debt / equity ratios are steady (but that Your debt / equity ratios are steady (but that

““cancan”” kicked down the road is still there)kicked down the road is still there)•• Market forces cannot be controlledMarket forces cannot be controlled

““GuaranteeGuarantee”” of low interest rates has endedof low interest rates has ended•• Bad news : variable rate debt to cost moreBad news : variable rate debt to cost more•• Good news : higher earrings on invested cashGood news : higher earrings on invested cash

No assurances FX rates will remain stableNo assurances FX rates will remain stable Floating NAV or other restrictions for MMFsFloating NAV or other restrictions for MMFs

Is Treasury equipped for this scenario?Is Treasury equipped for this scenario? What will be a What will be a ““successsuccess””??

•• What outcome will define it?What outcome will define it?•• What metric will show it ?What metric will show it ?

6/2/176/2/17 ©© The Financial Executives Consulting Group LLCThe Financial Executives Consulting Group LLC 1818©© The Financial Executives Consulting Group LLCThe Financial Executives Consulting Group LLC 1818


The Role of Treasury TodayThe Role of Treasury TodayTop 10 (of 21)Top 10 (of 21) LeadsLeads SupportsSupports

Borrowing long term (capital funding / sourcing)Borrowing long term (capital funding / sourcing) 79%79% 66

Investing Investing –– long termlong term 6161 1515

Payment Strategy & Execution (in / out)Payment Strategy & Execution (in / out) 6060 2424

Working Capital MgtWorking Capital Mgt 5454 2828

Capital Planning / AllocationCapital Planning / Allocation 5050 3131

Counterparty Risk AnalysisCounterparty Risk Analysis 4949 2424

Internal Financial ConsultantInternal Financial Consultant 4040 3636

Insurance PurchasingInsurance Purchasing 3838 2828

LeasingLeasing 3737 2727

Insurance claims MgtInsurance claims Mgt 3131 3030

Sources: 2017 Strategic Role of Treasury, p7 Sources: 2017 Strategic Role of Treasury, p7

6/2/176/2/17 ©© The Financial Executives Consulting Group LLCThe Financial Executives Consulting Group LLC 1919©© The Financial Executives Consulting Group LLCThe Financial Executives Consulting Group LLC 1919


The Role of Treasury TodayThe Role of Treasury TodayBottom 10 (of 21)Bottom 10 (of 21) LeadsLeads SupportsSupports

Employee BenefitsEmployee Benefits 77 4848

Supply Chain MgtSupply Chain Mgt 1010 4646

Business DevelopmentBusiness Development 1111 5050

Accounting / SEC ComplianceAccounting / SEC Compliance 1515 5050

Business Continuity PlanningBusiness Continuity Planning 1919 4545

Retirement ManagementRetirement Management 2121 4444

Mergers & AcquisitionsMergers & Acquisitions 2222 5050

Assessing Financial TechnologyAssessing Financial Technology 2424 4242

Financial Planning & AnalysisFinancial Planning & Analysis 2727 5353

Enterprise Risk ManagementEnterprise Risk Management 2828 4444

Sources: 2017 Strategic Role of Treasury, p7 Sources: 2017 Strategic Role of Treasury, p7


Summary of the presentationSummary of the presentation

So farSo far•• Where Treasury started fromWhere Treasury started from•• Why Treasury needs to upgrade itselfWhy Treasury needs to upgrade itself

Next Next •• We will develop a vision of the modern We will develop a vision of the modern

corporate treasury and the challenges for corporate treasury and the challenges for Treasury managersTreasury managers

•• Session 2 Session 2 -- wewe’’ll examine how Treasuries ll examine how Treasuries are making the transitionare making the transition


Overview of the Modern Treasury Function (1)Overview of the Modern Treasury Function (1) Treasury should be a strategic unit that adds Treasury should be a strategic unit that adds

significant value to the corporationsignificant value to the corporation•• Routine cash/banking transactions highly automatedRoutine cash/banking transactions highly automated•• Primary workload shifts from transaction processing to Primary workload shifts from transaction processing to

strategic analysis/decision makingstrategic analysis/decision making•• Centralized global approach to funding/banking/FXCentralized global approach to funding/banking/FX•• Major focus is on forecasting and future eventsMajor focus is on forecasting and future events•• Becomes a focal point for risk management expertiseBecomes a focal point for risk management expertise

Treasury is proTreasury is pro--active and visible in the companyactive and visible in the company•• Problem solving resource for global business unitsProblem solving resource for global business units•• Liquidity and debt management now seen as vital issuesLiquidity and debt management now seen as vital issues•• Staff have broader career opportunities as they become Staff have broader career opportunities as they become

knowledgeable about global operations and cash flows knowledgeable about global operations and cash flows


Overview of the Modern Treasury Function (2)Overview of the Modern Treasury Function (2)

Cash Management

Risk Management

Debt Management

Investment Management

FinancialMarkets

&Institutions

Company&

OperatingUnits

• Policies Highly Visible• Interactive Communications• Plan, Actual & Forecast in Sync

• Functions & Systems integrated

• Performance Metrics in Place toDemonstrate Value


7 Key Activities of the Modern Treasury7 Key Activities of the Modern Treasury

1. Global oversight of financial assets/liabilities/risks1. Global oversight of financial assets/liabilities/risks

2. Maintain access to sufficient funding at all times 2. Maintain access to sufficient funding at all times

3. Risk management role expanded beyond FX/IR3. Risk management role expanded beyond FX/IR

4. Internal consulting and information resource for 4. Internal consulting and information resource for corporate management and business unitscorporate management and business units

5. Reduce processing costs and bank charges5. Reduce processing costs and bank charges

6. Prepare and analyze forecasts to enable better 6. Prepare and analyze forecasts to enable better decisions on funding, hedging, pricing, investmentsdecisions on funding, hedging, pricing, investments

7. Actively participate in major company initiatives, 7. Actively participate in major company initiatives, e.g. strategic planning, IT, compliance, M&Ae.g. strategic planning, IT, compliance, M&A


1. Global oversight role 1. Global oversight role (i)(i)

Treasury has policy and oversight Treasury has policy and oversight responsibility for management of all financial responsibility for management of all financial assets, liabilities and riskassets, liabilities and risk•• Transaction execution may be decentralized, but Transaction execution may be decentralized, but

treasury policy and strategy decisions are nottreasury policy and strategy decisions are not

•• Manage treasury by functions, eliminating the Manage treasury by functions, eliminating the traditional domestic vs. international splittraditional domestic vs. international split

•• Treasury must formulate, document, distribute Treasury must formulate, document, distribute and update corporatewide policies/guidelines,and update corporatewide policies/guidelines, liquidity managementliquidity management FX/IR risk managementFX/IR risk management intercompany transactions and loansintercompany transactions and loans bank selection and counterparty riskbank selection and counterparty risk


1. Global oversight role 1. Global oversight role (ii)(ii)

Corporate Treasury has a control and Corporate Treasury has a control and oversight role over treasury activities at oversight role over treasury activities at foreign business units:foreign business units:

•• Bank relationships and account structuresBank relationships and account structures

•• CrossCross--border liquidity management: Cash pooling, border liquidity management: Cash pooling, netting, intercompany loans netting, intercompany loans

•• Foreign exchange risk managementForeign exchange risk management

•• Standardized (electronic) reportingStandardized (electronic) reporting

•• Forecasting: Cashflows, debt, FX exposuresForecasting: Cashflows, debt, FX exposures


1. Global oversight role (iii)1. Global oversight role (iii) Works effectively with other company units:Works effectively with other company units:

•• OperatingOperating Enforces the use of standard market ratesEnforces the use of standard market rates Establish currency of billing rules for intercompany and third Establish currency of billing rules for intercompany and third

party trade transactionsparty trade transactions Forecasts encourage liquidity needs to encourage focus on Forecasts encourage liquidity needs to encourage focus on

future business, not just accounting for activities that have future business, not just accounting for activities that have already happenedalready happened

•• FinancialFinancial Tax Tax -- Optimizes capital structure and after tax cost of fundsOptimizes capital structure and after tax cost of funds Controllers Controllers -- Standardize rules for settlement of intercompany Standardize rules for settlement of intercompany

transactionstransactions

Bottom line Bottom line –– More planning, less processingMore planning, less processing•• Treasury is in the funding businessTreasury is in the funding business•• Resources best spent on future activities to control risk Resources best spent on future activities to control risk


2. Maintain access to funding2. Maintain access to funding Funding has suddenly emerged as a Funding has suddenly emerged as a

challenging issue for many companieschallenging issue for many companies•• Traditional external funding sources now Traditional external funding sources now

unreliable or unreliable or ““priceypricey”” Bank loans, CP, IPO, equity issues, long term bondsBank loans, CP, IPO, equity issues, long term bonds Term loan waivers not routinely grantedTerm loan waivers not routinely granted

•• Risk of shortfalls in sales volume and pricingRisk of shortfalls in sales volume and pricing•• Minimal interest income on surplus cashMinimal interest income on surplus cash•• Counterparty risks now much more importantCounterparty risks now much more important

Need to improve internal liquidity Need to improve internal liquidity management management •• Tighter control of A/R and A/PTighter control of A/R and A/P•• Centralize and utilize surplus cash more Centralize and utilize surplus cash more

quicklyquickly


3. Scope/objectives of risk management3. Scope/objectives of risk management Treasury must make itself the focal point for risk Treasury must make itself the focal point for risk

analysis and management within the corporationanalysis and management within the corporation•• Acquired FX/IR skills give Treasury a firm foundation to Acquired FX/IR skills give Treasury a firm foundation to

manage other market or credit risks e.g. commodities, manage other market or credit risks e.g. commodities, employee option programs, employee option programs, ““enterprise risk managemententerprise risk management””

•• Risk management is a key component of strategic planningRisk management is a key component of strategic planning TreasuryTreasury’’s forwards forward--looking orientation complements looking orientation complements

ControllerController’’s s ““backward lookbackward look”” based on historical GL databased on historical GL data Senior management needs analysis of future P&L impactsSenior management needs analysis of future P&L impacts

Risk analysis and management is a sophisticated Risk analysis and management is a sophisticated functionfunction•• New SEC rule 33New SEC rule 33--9089 (Board must disclose its role in risk) 9089 (Board must disclose its role in risk)

will require more highly educated staff with quantitative will require more highly educated staff with quantitative skillsskills

•• Support will require upgrades and utilization of specialized Support will require upgrades and utilization of specialized softwaresoftware


4. Treasury as an internal consulting resource4. Treasury as an internal consulting resource Treasury can work with business units to:Treasury can work with business units to:

•• Increase P&L by upgrading working capital mgt, Increase P&L by upgrading working capital mgt, applying improved techniques and benchmarksapplying improved techniques and benchmarks

•• Identify market exposures and hedging Identify market exposures and hedging alternatives, and analyze cost/benefit strategies alternatives, and analyze cost/benefit strategies Analyze FX impacts on product pricing strategies, e.g. Analyze FX impacts on product pricing strategies, e.g.

currency of billing, fixed price listscurrency of billing, fixed price lists

Hedge manufacturing costs, e.g. metals, energy, oil, Hedge manufacturing costs, e.g. metals, energy, oil, sugar/cocoa/coffee etc.sugar/cocoa/coffee etc.

•• Analyze customer credit risk and develop better Analyze customer credit risk and develop better customer financing programscustomer financing programs


5. Treasury5. Treasury’’s focus on reducing operating costss focus on reducing operating costs How treasury can do more with lessHow treasury can do more with less

•• External cost controlExternal cost control Rationalize banks and bank account structures Rationalize banks and bank account structures -- companies companies

have too many accounts, which create excessive have too many accounts, which create excessive ““maintenancemaintenance””chargescharges

Replace paper based services with electronic services e.g. EFT, Replace paper based services with electronic services e.g. EFT, check imaging, purchase or T&E cardscheck imaging, purchase or T&E cards

•• Internal cost controlInternal cost control Automate daily bank and cash operations Automate daily bank and cash operations -- e.g. treasury e.g. treasury

workstation as single platform for cash, debt activities across workstation as single platform for cash, debt activities across multiple banksmultiple banks

Move to portals for managing FX or investments reducing need Move to portals for managing FX or investments reducing need to process multiple paper statements, spreadsheets on FX to process multiple paper statements, spreadsheets on FX contracts, etccontracts, etc

Identify new ideas to increase liquidity / reduce riskIdentify new ideas to increase liquidity / reduce risk•• AR collections to increase funds in ?AR collections to increase funds in ?•• AP disbursements to time funds out?AP disbursements to time funds out?•• Intercompany settlements to reduce borrowings, FX needs?Intercompany settlements to reduce borrowings, FX needs?


6. Treasury6. Treasury’’s forwards forward--looking orientationlooking orientation Treasury can add value by facilitating better financial Treasury can add value by facilitating better financial

and business decisionsand business decisions•• Value of the company = NPV of Value of the company = NPV of futurefuture cashflows, so cashflows, so

managing only current transactions is not protecting managing only current transactions is not protecting stockholder valuestockholder value

•• Reliable forecasts enable better liquidity management, e.g. Reliable forecasts enable better liquidity management, e.g. borrow/invest with longer maturitiesborrow/invest with longer maturities Identify and hedge FX exposures earlier, i.e. when they already Identify and hedge FX exposures earlier, i.e. when they already

exist but may not yet be bookedexist but may not yet be booked

Avoid surprises and crises rather than having to manage them Avoid surprises and crises rather than having to manage them after they have occurredafter they have occurred

It is not all numbersIt is not all numbers•• Bank relationshipsBank relationships•• Debt/ covenant complianceDebt/ covenant compliance


7. Treasury as a pro7. Treasury as a pro--active corporate unitactive corporate unit

Treasury needs to interact within the Treasury needs to interact within the company at least as much as with company at least as much as with financial institutionsfinancial institutions•• Works closely with Tax on global capital Works closely with Tax on global capital

structures and cash repatriation strategiesstructures and cash repatriation strategies

•• Internal consulting and support roleInternal consulting and support role

•• Should be an active contributor to major Should be an active contributor to major corporate initiatives, e.g. ERP, M&A, SARBOX corporate initiatives, e.g. ERP, M&A, SARBOX compliance, China strategy, XB factory movescompliance, China strategy, XB factory moves

•• Provides important information to business Provides important information to business units via treasury intranetunits via treasury intranet


Best practices for the modern treasuryBest practices for the modern treasury

Create clear written policies, updated regularlyCreate clear written policies, updated regularly

Define performance measurement criteriaDefine performance measurement criteria•• ““What gets measured gets managedWhat gets measured gets managed””

Normal business concept (e.g. P&L, ROI, stock price)Normal business concept (e.g. P&L, ROI, stock price) Adopt measures of liquidity and risk (rarely attempted in Adopt measures of liquidity and risk (rarely attempted in

corporate treasury today)corporate treasury today)

•• Benchmark treasury vs. peer companiesBenchmark treasury vs. peer companies

Rotate staff between finance and business unitsRotate staff between finance and business units•• Have staff to visit principal business units at least annually, Have staff to visit principal business units at least annually,

especially internationalespecially international

•• Require staff to follow a continuing education programRequire staff to follow a continuing education program


Overview of the Modern Treasury FunctionOverview of the Modern Treasury Function

Cash Management

Risk Management

Debt Management

Investment Management

FinancialMarkets

&Institutions

Company&

OperatingUnits

• Policies Highly Visible• Interactive Communications• Plan, Actual & Forecast in Sync

• Functions & Systems integrated

• Performance Metrics in Place toDemonstrate Value


Making it happen Making it happen Translating the vision into realityTranslating the vision into reality

•• Step 1 Step 1 -- Start with the most importantStart with the most important•• Top 3 from FECGTop 3 from FECG’’s s ““Treasury Issues 2017Treasury Issues 2017”” survey:survey:

2.52.52.52.5Manage Working CapitalManage Working Capital

2.52.5

2.22.2

RatingRating20172017

2.52.5Improve Liquidity (internal + external)Improve Liquidity (internal + external)

2.32.3Improve Cash Forecasting CapabilityImprove Cash Forecasting Capability

Rating Rating 20162016

ActivityActivity(1 to 5 Scale: 1 = high)(1 to 5 Scale: 1 = high)

Managing a Corporate Treasury Department · 2018-04-14 · • Becomes a focal point for risk...

Documents

Transcript of Managing a Corporate Treasury Department · 2018-04-14 · • Becomes a focal point for risk...