Global Treasury Americas | Planning the post-pandemic Treasury

| 12-05-2021 | Eurofinance | treasuryXL |

The leading virtual event defining today’s corporate treasury agenda

For the past year, treasurers have sweated the core stuff: securing short-term liquidity and longer-term credit; enhancing risk monitoring and hedging processes; and dealing with the implications of remote working. But in the complex and uncertain transition to a new ‘normal’, finance functions will have to resume the search for growth. Can treasury help identify where growth is most likely to come from and which parts of the business are most threatened by digital disruption? And can they do better – can they help build the business strategies needed to prosper as we emerge into the next phase of the pandemic.

This event will explore the practical steps treasurers can take to make enterprise and treasury digitalization a reality and look at varied case studies of transformation in the treasury. The event will look in-depth at new technologies in action as well as more strategic concepts including the sustainability agenda. We look at how treasury can make a difference. Finally, we look at what it takes to transform treasury wherever you are in your journey in order to increase efficiencies, protect the business and make a difference to the bottom-line.

Global Treasury Americas: Planning the post-pandemic treasury

2 days of actionable insights, plus real world case studies tackling the key issues facing treasurers in the region. Topics include:

  • The Great Bounce-back
  • Practical steps on the path to automated Treasury
  • Why sustainability matters for Treasury
  • Name that threat: What’s next
  • Building a true cash culture
  • Payments evolution – the Treasurer’s view

What makes Global Treasury Americas your must-attend event of the year?

  • Understand the practical steps towards making enterprise and treasury digitalization a reality
  • Gain actionable solutions and best practices from varied real-world case studies
  • Network with an unrivalled audience of 800+ senior treasury professionals across the Americas
  • Benchmark your operations against the regions most forward-thinking treasury teams
  • Explore how to support business growth whilst balancing the traditional role of treasury

June 9-10 | Virtual

Register Now

 

 

Webinar – Letters of Credit

| 16-02-2021 | Evofenedex

In this Webinar held by Evofenedex, we will learn more about Letter of Credits. The Webinar is in Dutch. Be sure to subscribe!

Een Letter of Credit (L/C) is een veelgebruikte betalingsvorm bij internationale handel. Een L/C wordt bijvoorbeeld regelmatig ingezet bij het zakendoen met het Midden- en Verre Oosten. Als je voor het eerst met een L/C wordt geconfronteerd, is het verstandig een zekere basiskennis te hebben. Na het volgen van dit webinar heb je kennis gemaakt met de L/C en weet je wat daarbij komt kijken.

  • Locatie: Online
  • Datum: 16 Februari 2021
  • Tijdstip: 10:00 – 10:45

WEBINAR – BASISKENNIS LETTERS OF CREDIT BIJ IMPORT EN EXPORT

  • Voor wie? Iedereen die niet of beperkt met L/C’s heeft gewerkt en hier meer over wil weten, zowel vanuit een import- als exportrol.
  • Doel: Deelnemers de basiskennis geven om succesvol met een L/C te kunnen werken. Na het volgen van dit webinar weet je wat een L/C is, welke partijen erbij betrokken zijn en ben je op de hoogte van de tips en tricks bij het gebruik ervan.

Programma

Onderwerp: basiskennis Letters of Credit
Tijd: 10.00-10.45 uur
Spreker: Hans Noordzij, trade finance specialist en docent bij evofenedex
Moderator: Wiemela Mangroo, projectleider bij evofenedex

In dit webinar komen de volgende onderwerpen aan de orde:

  • wat is een L/C en welke partijen zijn betrokken
  • voor- en nadelen van het werken met een L/C
  • documenten bij een L/C
  • aandachtspunten, tips en tricks bij het gebruik van een L/C

MELD AAN

 

Cash Management review – Fitting like a glove

| 18-01-2021 | Bas Meijer |

Can you remember when your current Cash Management structure has been set up? Probably at a point in time when there was a refinance, additional funding need or when a new treasurer came on board. The world is changing, your clients and their behavior are changing, therefore probably your Cash Management environment needs changing.

Unfortunately these changes are not automatically translated and implemented into your Cash Management setup. And as not every bank is the same, some banks cannot provide the Cash Management setup your corporate needs.

Reflecting the Cash Management needs every 3-5 years is a good habit. Solutions are evolving, banks are changing their focus & pricing can be renegotiated. But the most important goal is that the Cash Management setup should fit your corporate like a glove, not too big, an certainly not too small.

TreasuryXL has multiple experienced Treasures with up-to-date knowledge and experience, who can help your organisation to achieve these  goals. Maybe your corporate is ready to take the next step, or your Cash Management infra structure is outdated. Is there need for automation, independent banking portal, TMS or market data provider?

From experience this review brings a contribution to the bottom line. But not only in money, also in speed and accuracy. With new tooling your current choices can be reviewed in time, which helps you to make the next steps down the road. The Treasury Department is never static, and should always adapt to the changing environment. Make sure that your Treasury function, how big or small, fits like a glove to the needs of the corporate!

 

Bas Meijer

Treasury Specialist

 

 

 

 

 

Interim Treasurer: Cost or revenue?

| 15-12-2020 | Bas Meijer |

Temporary staff in general is looked at as ‘too expensive’ . When turnover is showing headwind, or management is under pressure by internal- or external stakeholders, cost saving is the first instrument management uses.

Agreements with expensive temporary staff is ended and fixed employees are asked to go the extra mile. This is not the case for all financial expertise.

The interim Treasurer is a good example. In the past 20 years I have experienced that interim Treasurers are able to create value to the company, and add contribution to your bottom line. In some assignments this was 1-2% of the turnover.

In general the interim treasurer should be able to have a rate of return of 3-6 months, based on a 1 year assignment. The revenue will not be limited to this 1 year assignment, but last much longer. I have experienced a much shorter period, up to 4-6 weeks.

Are you interested in cost saving, and attribution to your bottom line? Do not just let your expertise walk out of the door, but hire an interim treasurer for an analyses on the potential cost saving for your organisation. You’ll be surprised what an added value an interim treasurer can bring to your organisation.

 

Bas Meijer

Treasury Specialist

 

 

 

 

 

To Hedge or not to hedge – The Natural hedge myth

| 30-11-2020 | Bas Meijer |

Corporate firms have the primary objective to be profitable. From a Treasury perspective, the main goal is to increase cash and add value. Nowadays, an increasing amount of Corporate firms engage in international business. Therefore these firms can be exposed to unrelated business exposure, such as interest rates, FX and commodities pricing depending on the business model pursued.

How do you deal with potential orders with these kind of exposure? I have seen companies going bankrupt because they did not (fully) hedge their potential orders and applied the wrong instruments.

Exposure differentiation

In order to hedge, the distinction must be made between the type of exposure:

  • A committed exposure: invoices, signed orders
  • An expected exposure: unsigned orders, expected budget

Both types of exposures need different products to be eliminated. Do all exposures need to be hedged? No. Transactional exposures should be fully hedged. Internal loans or hidden equity not always. In general, equity is not hedged. Internal loans depends in the way these are structured. In which currency is the loan granted, what are the cash flows etc. This is tailor made.

Natural Hedge & Holistic Hedges

The Natural hedge myths: there is only a natural hedge if the cash-in and cash-out are in similar currency and at approximately the same time, and applicable to transaction exposure only. This means that there is hardly any natural hedge.

Finally the holistic approach: some providers are selling holistic hedges. In general these are based on statistical studies. Holistic hedge approach adds uncorrelated exposure to the corporates, with the goal to lower the total exposure. In the world of statistics there is always room for error. When using this approach, the corporate firms should be aware of this. Not only the board, but also the auditors. I have seen enormous errors on this approach, resulting in not eliminating the risk but increasing the risk.

Cost of hedging

Is hedging expensive? No. There are many different ways to hedge the exposures, and there are many different providers to do this. Some of these are too expensive. Use a Treasury Specialist to analyse the cost of hedging and come up with alternatives. The Treasury Specialist has a high rate of return and attributes to the bottom for years to come.

More important is to quantify your exposures. The exposures are not limited to the cash flow only, but can also be embedded in your processes. Using a Treasury Specialist will lower your cost of hedging, assures that your organisation hedges the correct exposure with the right instruments, can massively attributes to the bottom line and protect you of becoming tomorrow’s news.

Thanks for reading, comments are welcome!

 

Bas Meijer

Treasury Specialist

 

 

 

 

 

Only 5 days left until the International Treasury Management Virtual Week 2020

| 16-09-2020 | Eurofinance | treasuryXL |

Don’t miss the Treasury Event of the Year! If you haven’t signed up already, here is a reminder to join this great virtual event with incredible speakers and live sessions.

Virtual Event

Now more than ever, we need to learn and engage with other treasury professionals around the world, so that we can navigate and overcome the unprecedented challenges we are facing.

As the current situation unfolds, the role of the corporate treasurer is evolving and becoming more strategic than ever before. The complexities and function of treasury within the business is changing even more rapidly. The question is: What does the future of treasury look like and how will this affect my team? And where can I turn for world-class advice on building resiliency, supporting the business and addressing future challenges?

Look no further than EuroFinance’s International Treasury Management Virtual Week taking place 21-25 September. It will see world-leading treasurers and economists come together to address these issues, deliver big picture global insights and share the essential granular knowledge you and your team need for the path ahead. In the spotlight will be the latest on cash flow forecasting, supply chain finance, tech, liquidity and FX and payments plus much more.

Speakers and Live Sessions

The line-up of speakers is impressive with the likes of Shell, Alibaba Group, HP Inc., eBay, Finnair, Microsoft, Intel Corporation, Schlumberger, Booking Holdings Inc. and Rio Tinto holding centre stage in one of the 75+ live sessions. But don’t worry if you miss a session, they will be available on-demand for you to watch at a time that suits you.

The custom-built virtual conference platform will bring the experience of a live event to life in a virtual world. It offers plenty of opportunities to network and learn from your global peers, plus a smart calendar to build your schedule.

Free Registration

The great news is, the 2020 event comes without a price tag! It is free for corporate treasurers. So, you can get all the world-class expert knowledge and insights you expect from the leading treasury event without the costs of registration, flights, accommodation or even expenses.

What are you waiting for? Set your treasury team up to thrive not just to survive.

Register for free today!

 

EuroFinance International Treasury Management Virtual Week 21-25 September 2020

| 25-08-2020 | Eurofinance | treasuryXL |

The pandemic sent shockwaves through global financial markets and confronted businesses with extreme scenarios.

Virtual Event

Now more than ever, we need to learn and engage with other treasury professionals around the world, so that we can navigate and overcome the unprecedented challenges we are facing.

As the current situation unfolds, the role of the corporate treasurer is evolving and becoming more strategic than ever before. The complexities and function of treasury within the business is changing even more rapidly. The question is: What does the future of treasury look like and how will this affect my team? And where can I turn for world-class advice on building resiliency, supporting the business and addressing future challenges?

Look no further than EuroFinance’s International Treasury Management Virtual Week taking place 21-25 September. It will see world-leading treasurers and economists come together to address these issues, deliver big picture global insights and share the essential granular knowledge you and your team need for the path ahead. In the spotlight will be the latest on cash flow forecasting, supply chain finance, tech, liquidity and FX and payments plus much more.

Speakers and Live Sessions

The line-up of speakers is impressive with the likes of Shell, Alibaba Group, HP Inc., eBay, Finnair, Microsoft, Intel Corporation, Schlumberger, Booking Holdings Inc. and Rio Tinto holding centre stage in one of the 75+ live sessions. But don’t worry if you miss a session, they will be available on-demand for you to watch at a time that suits you.

The custom-built virtual conference platform will bring the experience of a live event to life in a virtual world. It offers plenty of opportunities to network and learn from your global peers, plus a smart calendar to build your schedule.

Free Registration

The great news is, the 2020 event comes without a price tag! It is free for corporate treasurers. So, you can get all the world-class expert knowledge and insights you expect from the leading treasury event without the costs of registration, flights, accommodation or even expenses.

What are you waiting for? Set your treasury team up to thrive not just to survive.

Register for free today!

 

How to simplify Procurement and Finance in the Supply Chain

| 21-04-2020 | Wim Kok | treasuryXL

Accelerated by the Corona pandemic, an unforeseen global crisis affecting us all, digitalisation, transparency, efficiency and real time settlement has moved dramatically up north on the priority scale of all global industries. At least it makes an important move to rethink sustainable business models in the post Corona era.

Secured (cyber proof) Platform connectivity bolstering strategic supply chains will become a very important aspect in the future survival of trading companies globally.

More and more initiatives are seen to phase out the “old school” handling of paper-based settlement. Rain forest of papers are being used to settle payment out of export and import contracts. Its cumbersome processes to settle payments through bank using old payment methodologies like Bills of Exchange, Cash Against Documents and Documentary Letters of Credit. Do not misunderstand my objective, nowadays contract settlements are strongly embedded in society supported by different legislation countries by country. This is also the reason why things are moving so slowly. Institutions like ICC, Swift, Customs & Harbour authorities (to name few) are constantly trying to move the needle in digitising processes. The reality is that the transformation goes to slowly. Maybe when COVID19 is behind us there will be an acceleration after reconsidering existing business models of supply chains dependent from documentary evidence.

In this 15 trillion USD ($) global trade market there is enough space next to the big banks and big corporates, who started to explore already after the 2008 crisis using agile inhouse innovation labs.

Initiatives like Komgo and R3 syndicates already looking at blockchain technology, however still geared toward the larger (commodity) trading community. It is interesting to see that the big Agri trading companies recently started a new initiative Covantis.

After PSD2 introducing Open banking a lot of financial FinTech’s are entering the market not having the burden of an absolute (outdated) big banking system. Big tech giants like google, Facebook and Amazon are looking into their enormous data bases trying to grasp their market share.

TransDocLink is developing a platform based upon the above ideas, capturing as much as possible stakeholders & features. Transdoclink already can make use of the TDeal concept on its platform. Creating in a supplier/buyer relationship full transparency, efficiency and trust in their contracted supply chain. A dashboard gives visibility around the whereabouts of the goods and money (triggered movements are settled through a dedicated wallet). TransDocLink aims to serve the SME market in an open (independent) platform environment.

In 2016 TransDocLink already recognised that the Letter of Credit (and its very paper heavy documentary settlement) is a “dinosaur” in the expensive settlement of payments in the banking industry. The aim was to digitise these processes and offer an alternative on a platform-based initiative. Buyer and Seller create on the platform a trusted lane (supply chain) by matching contracts. The settlement of agreed terms is being executed through an independent trust account instead of the alternative using an expensive settlement via Letter of Credit. The original concept was built around a straight through processing payment engine (exempted by the Dutch Central bank) and further enhancements are being made (escrow-TDeal , working capital, asset based & trade finance modules) to keep up with the quick changing landscape in the FinTech industry.

Curious what TransDocLink can do for your business? Visit transdoclink.com and/or contact me directly for some advice.

 

Wim Kok

International Business Consultant
Trade Finance Specialist

 

 

 

Managing treasury risk: Commodity Risk (Part IV)

| 14-2-2017 | Lionel Pavey |

There are lots of discussions concerning risk, but let us start by trying to define what we mean by risk. In my fourth article I will write about commodity risk, what the strategies around commodities are and how to build a commodity risk framework. More information about my first three articles can be found at the end of today’s article.

Commodity Risk

Commodity risk occurs due to changes in price, quantity, quality and politics with regard to the underlying commodities. This can refer to both the commodity as a whole and an input component of a finished good. Commodity risk usually refers to the risk in a physical product, but also occurs in products like electricity. It can affect producers, suppliers and buyers.

Traditionally, commodity price risk was managed by the purchasing department. Here the emphasis was placed on the price – the lower the price, the better. But price is only one component of commodity risk. Price changes can either be observed directly in the commodity or indirectly when the commodity is an input in the finished product.
Availability, especially of energy, is crucial for any company to be able to undertake operations. Combining commodity risk over both Treasury and Purchasing allows these 2 departments to work closer and build a better understanding of the risks involved. It also allows for a comprehensive view of the whole supply chain within a company. A product like electricity is dependent on the input source of production – gas, petroleum, coal, wind, climate – as well as the price and supply of electricity itself.

There are many factors that can determine commodities prices – supply and demand, production capacity, storage, transport. As such it is not as easy to design the risk management model as it is for financial products.

 General strategies that can be implemented

  1. Acceptance
  2. Avoidance
  3. Contract hedging
  4. Correlated hedging

Acceptance
Acceptance would mean that the risk exposure would be unchanged. The company would then absorb all price increases and attempt to pass the increase on when selling the finished product.

Avoidance
Avoidance and/or minimizing means substituting or decreasing the use of certain input components.

Contract hedging
Contract hedging means using financial products related to the commodity, such as options and futures as well as swapping price agreements.

Correlated hedging
Correlated hedging means examining the exposure of a commodity – the price of crude oil is always quoted in USD – and taking a hedge in the USD as opposed to the crude oil itself. The 2 products are correlated to a certain extent, though not fully.

Commodity risk framework

Commodity price speculation – most contracts are settled by physical delivery – affects the market more than price speculation in currency markets.
To build a commodity risk framework, attention needs to given to the following:

  1. Identify the risks
  2. Measure the exposure
  3. Identify hedging products
  4. Examine the market
  5. Delegate the responsibility factors within the organization
  6. Involve management and the Board of Directors
  7. Perform analytics on identified positions
  8. Consider the accounting issues
  9. Create a team
  10. Are there system requirements needed

Problems can arise because of the following:

  1. Relevant information is dispersed throughout the company
  2. Management may not be aligned to the programme
  3. Quantifying exposure can be difficult
  4. There is no natural hedge for the exposure
  5. Design of reports and KPI’s can be complex

It requires an integrated commitment from diverse departments and management to understand and implement a robust, concise policy – but this should not be a hindrance to running the policy.

Lionel Pavey

 

 

Lionel Pavey

Cash Management and Treasury Specialist 

 

 

More articles of this series:

Managing treasury risk: Risk management

Managing treasury risk: Interest rate risk 

Managing treasury risk: Foreign exchange risk