Netting: a viable value driver

| 17-12-2018 | BELLIN | treasuryXL |

How to save money and resources with a smart intercompany reconciliation process

The last two decades have seen treasurers graduate from haphazard data collectors to deliberate decision makers. As their empowerment is inextricably linked to the triumph of the internet and the technology it affords, it comes as no surprise that most of them are curious about new developments and eager to partake in them. Yet, the convenience and value of automated intercompany reconciliation is still comparatively underappreciated and overlooked. According to an article published in Financial Management just a few years ago, the vast majority of US companies still reconcile their balance sheet accounts manually and forfeit the countless benefits yielded by a centralized, agreement-driven netting process enabled by today’s technology.

What is Netting?

At its most basic level, netting is the offsetting of payables against receivables between two or more group companies to reduce the amount of net payments and save transaction costs. Originally a mere accounting task – ensuring that the balances of two accounts were matching – intercompany reconciliation has, with the advent of modern technology, transformed into an indispensable cash and FX management tool and thus become an integral part of treasury management.

The netting center — technology with teething troubles

The proverbial missing link to an enhanced netting process was the emergence of cloud-based Treasury Management Systems that afford users global visibility and control and enable the implementation of group-wide process automation. Bilateral netting was replaced by multilateral netting (figure 1) via the introduction of netting centers run by the group treasury. Isolated matching between single subsidiaries became obsolete, as the netting center acts as a reconciliation hub across the entire company: payables are made out by the respective group companies to the netting center, receivables get paid to the eligible subsidiaries by the netting center. Classically, this process was either payable- or receivable-driven. On the surface, this seems simple and efficient, but it’s not: as there is no room for doubt or dispute, it is susceptible to errors and abuse. In the case of payments-driven netting, subsidiaries can compromise the system by accidentally or willfully failing to enter invoices, while in a netting process based on receivables, group companies can enter fictitious agreements to garner illegitimate payments. In a setup like this, the netting center is as effective as it is blind – with guillotine-like precision it carries out what the subsidiaries have entered, without verifying its legitimacy. This creates uncertainty among the group companies and fosters catacombs of shadow bookkeeping at the expense of much-needed visibility.

Netting – it’s all about engagement

Therefore, modern multilateral netting systems should not only perform AP/AR matching but are also dispute management systems, performing – as we call it — agreement-driven netting. It enables payable- and receivable-driven netting, but in an advanced manner, as it encourages engagement and promotes transparency. Via the TMS, AP and AR line item data gets collected and subsequently matched. Disagreements are dealt with in a structured dispute process, the rulebook of which is defined by the company’s management according to the requirements of the group. Disputes between subsidiaries get reviewed by the netting center, which acts like a referee, applying said rules. The key principle and the main advantage of this approach is the engagement it fosters: each party gets their say, no one can be taken advantage of, all transactions are transparent as everything gets recorded and the proper settlement of balances is ensured.

Multilateral Netting as a cash and FX management instrument

The advantages of such a process are obvious: With fixed dates for netting runs, incoming payments can be predicted precisely. The netting center respectively the central treasury enjoys maximum control and visibility of cash movements and can optimize the use of funds within the group. The same holds true for FX hedging: netting enables subsidiaries to transfer the FX risk to the central treasury, where seasoned experts deal with it for the entire group. Consequently, the number of FX trades – and with it the transfer and bank fees – gets significantly reduced, as each subsidiary will only have one cashflow per netting run towards or from the netting center in a fixed currency set beforehand. As the netting center acts as an in-house bank, the group companies don’t make any payments via bank accounts anymore, which saves cost and resources and provides added transparency.

Cost reduction via best practice netting: figures!

Let me provide you with just one example from the plethora of companies, who were able to streamline their operations and encounter significant savings via a TMS-based netting process: the Austrian tool manufacturer Tyrolit, whose Success Story and accompanying video we’ve featured previously as part of our We Love Treasury 2 series. Upon counting all payments via bank accounts between group companies, Tyrolit arrived at the impressive number of 600 per month, most of them international, entailing substantial bank fees as well as float. The fact that many of those transactions were made in foreign currency added significant translation costs to that, which were hard to calculate due to the different margins the banks offered. With the roll-out of an agreement-driven netting process across the group, Tyrolit managed to reduce the number of transactions to a mere 5% of the original amount and ended up saving the whopping sum of about 500,000€ per year on bank fees and translation costs alone.

Netting company-wide: benefits, benefits, benefits

By transforming a company’s entire intra-firm trade, a robust multilateral netting process offers benefits galore, including but not limited to:

  • a company culture that enables dialogue, promotes engagement and fosters transparency and trust
  • facilitated cash and liquidity management via centralized IC reconciliation on fixed dates in fixed currencies
  • fair distribution and optimization of refinancing cost
  • centralized FX hedging aiding the consolidation of an over-complex banking landscape, reducing bank fees and minimizing translation costs
  • overall enhanced efficiency, visibility, security and compliance

By the way: the implementation of netting software is fairly straightforward, software-wise, once you’ve decided that you want to follow through with the process. It’s a one-time technical impact, user-training can be performed very efficiently and hosting as well as outsourcing options are available to overcome capacity shortages. So what are you waiting for?


Dr. Teut Deese
Staff Writer – BELLIN 

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Check out the video: “Netting: How to save resources with smart IC Reconciliation,” in which Martin Bellin gives us an in-depth breakdown of how your company can take full advantage of the associated benefits.

 

YOU CAN BE ONE OF THE LAST PEER GROUP MEMBERS!

| 13-12-2018 | by  Pieter de Kiewit |

“Under 20% of the treasury population completed a formal treasury education. And over 50% of decision makers in the recruitment of treasurers does not know about the discipline.” We are one of the launching partners of the Treasurer Test that can bring an objective measurement that can tackle problems resulting from the described issue. Others are the Vrije Universiteit (Amsterdam), the University of Applied Sciences of Utrecht, software & assessment developers and law experts.

Key element of the test is the comparison with peer groups. These groups are defined by number of years of experience in treasury of its’ members. Our role as launching partner is asking 100 relevant peer group members that will create the benchmark that future testees will be compared with. Peer group members do not pay the €595 the test will cost when ready, but only €1,21. We carefully invited most, but there are still a few places left, especially in the group with under 9 years’ experience. If you are interested, please contact Roy Baaten, the community manager of treasuryXL at [email protected]

When the number of 100 is reached, reports will be sent out and the Treasurer Test is ready for use. We expect a lot. At Treasurer Search we will use the test in our committed searches and many other situations, when relevant. First expectation is to further improve the match making process. Also in choosing education, coaching, outplacement, team formation and salary benchmarking the test can come in handy. Perhaps even showing a CFO about the complexity of the discipline can be done. There is a peer group “no treasury experience”.

We look forward to the analysis that can be made after a bigger group of people completed the test What will we see in the correlation between age, education level, nationality on one hand and treasury skills level on the other? We expect to further contribute in raising the level of corporate treasury and hope you will join us.

For more information about the Treasurer Test please visit the Treasurer Test Blog page.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Training Blockchain voor Financials

| 11-12-2018 | treasuryXL

Op 18 en 19 december 2018 organiseert Alex van Groningen de training Blockchain voor Financials. 

Is blockchain een hype of gaat het de wereld echt drastisch veranderen? Wat is de gigantische impact van blockchain op de toekomst van uw financiële functie? Ontdek in twee dagen wat blockchain is, hoe u het toepast en hoe u ermee begint in uw eigen functie, organisatie of bij uw klanten

Uniek: Ontvang waardevol advies op uw eigen Blockchain Case

Breng uw eigen blockchain-use case in en deze wordt al tijdens de training besproken en beoordeeld op haalbaarheid. Ontvang bruikbare tips en adviezen waarmee u direct na de training verder kunt.

In deze training onthult blockchain-expert Paul Bessems de nieuwe wereld van blockchain en geeft u daarbij vele aanknopingspunten om direct met blockchain aan de slag te gaan binnen uw organisatie of netwerk. Paul Bessems illustreert de theorie met vele voorbeelden uit zijn eigen praktijk waardoor de potentie van blockchain direct duidelijk wordt. Schrijf direct in.

Onderwerpen

  • Wat is Blockchain?
  • Het verhaal achter Bitcoin
  • Blockchain in de praktijk
  • Data Economics
  • Toekomst van Blockchain

Programma

Het volledige programma kunt u hier raadplegen.

Voor wie?

Dit programma is specifiek ontwikkeld voor financials zoals controllers, financieel managers, financieel adviseurs en financieel directeuren die betrokken zijn bij (management) innovaties zoals blockchain en digitalisering.

Bel voor meer informatie of een offerte met Ivo ten Hoorn op 020 639 0008.

Are you a treasurer? Here are 5 tips for a successful career

| 06-12-2018 | TIS | treasuryXL |


Treasurers – the guardians of money – play an important role in all companies. They work to regulate the flow of money by taking a more modern and contemporary approach than ever before. Here we say: Goodbye cash in the closet and hello digital possibilities of the 21st century!

At the same time, however, there is a heavy burden of responsibility on you because if you miscalculate something you will quickly be out of a job and the company will be out of business too. To make sure that doesn’t happen and that your career as a treasurer goes from strength to strength, we have compiled five tips to keep you on the safe side.

1. From controller to treasurer

The switch from money management and the associated creation of a treasury department is becoming increasingly common. In summary, here is a brief overview of what you can do to improve your work as a treasurer:

For example, the choice of bank partners should be carefully considered. By investing time in this, you can save fees later. Likewise, liquidity equalization should be reviewed. Cash pooling makes efficient cash distribution, in Europe or globally as well, easier as central financial management offsets excess liquidity or liquidity shortages. The treasury management system used should also be tailored to the needs of the company and its customers. If these have perhaps changed in recent years, an adaptation could be useful. In general, it is important to be able to ensure transparency for customers and within the company at all times in order to strengthen customer confidence and provide employees with all the information they need.

In the absence of transparency and an unclear view of banking activities, you can use the TIS Bank Account Manager. This is because TIS facilitates reduced bank account management to a single SaaS solution, allowing you to control all account details. For treasurers TIS is therefore worth its weight in gold.

2. From overview to perspective

Having optimized the technical and general structures that help treasurers make their lives easier, it is important to understand the state of the business. A complete overview is therefore priceless! To improve something, you must first know what there is to improve. Which is why a general check of the state of affairs is essential.

Then carry out a financial check: You need to find out about the resources that are available and which could be exhausted in any given case. In addition, you should know about the liquidity of the company – where are there still bottlenecks or where could they develop?

Caution! Because that is quickly neglected: Even within your team, you should know and keep track of the sequence of operating processes. This allows you to quickly identify internal vulnerabilities before you start looking for them externally.

Keep this overview up-to-date and expand it to include news and changes. This allows you to detect possible risks for your company at an early stage and reduce or even prevent negative effects. The overview also helps you to assess the support you need from other departments. They will certainly be happy if they do not have to spontaneously provide first aid for the issue but know in good time to integrate this request into their work. This will help you to ensure timely processing and thus, in the long term, to achieve your own goals.

Recognizing the need for action enables you to respond in good time. If you recognize a chance for long-term improvement, the necessary steps should be implemented soon. However, if the possibility of a short-term improvement is recognized, steps must be taken immediately.

As you can see: This overview helps you to no longer miss any room for improvement.

3. Only optimized reporting is also good reporting

Correct and detailed reporting on all current and future projects can play a major role in the success of the treasury department. It goes without saying that some projects work very well without a meticulous protocol, which also takes up a lot of time. However, at some point you may come across an error that cannot be traced back and could trigger a domino-like chain reaction – or maybe not, you don’t know. But would you not rather invest a little more work to be on the safe side? For this reason, optimize the laborious reporting process and fill it with details, so that if a problem arises later, you can directly identify and fix the source.

4. A planned approach to success

If you have a clear view of the current situation of the company, think about future successes and goals. To do this, you should create an accurate roadmap listing all projects, tasks, customers, etc. After you know what you want to achieve in the future and what your goals are, record them as well. Divide your goals into long-term, medium-term or short-term achievements and prioritize them. Look for a way to reach the goals from the current situation. The previously provided overview will help you immensely in evaluating the implementation options!

If a goal does not seem possible at the moment, shift it to a later date, but do not forget it. However, if you have found a way, get down to planning or directly to implementation.

5. Silence is silver, talking is golden

Even if the opposite opinion prevails in everyday life, as a treasurer you should maintain good communication lines with all stakeholders. Hold regular meetings with your team. This helps you to always keep an eye on the current status of projects. Introduce project completion reports and align your expectations with those of your colleagues. It is important to keep to your timetable and that objectives to be achieved are accessible at all times. You should not only keep your close colleagues updated, but also those stakeholders in other departments. This will allow you to obtain approval for the funds you need in future projects. Good internal communication is therefore important, what’s more, contact with external partners and customers is also crucial for successful cooperation. Here in particular you need to identify and fix problems quickly to prevent things from getting worse.

Unfortunately, as is often the case in life, there is no guide to guaranteed success. However, with these five tips, you are on the right path. It is important that you do not lose sight of your actual tasks during all the coordination work. Create an (imaginary) list of tasks to complete. It should strike a balance between your actual tasks, such as financial planning, hedging financial risks or maintaining contact with banks and capital markets and the coordination you have to provide. Usually one goes with the other, but neither should gain the upper hand alone. Stay focused!

You can read the full article on the website of Treasury Intelligence Solutions GmbH.

 

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COBASE: MULTIBANKING MADE SIMPLE

| 04-12-2018 | Cobase | treasuryXL

Companies that hold accounts with different banks face many inefficiencies. They have to use different bank portals to interact with their banks and other financial service providers and often multiple ERP connections have to be maintained. The more banks and accounts a company has, the more complex it gets.

Cobase offers a solution! Cobase is a single point of access to manage all bank accounts a company has at many different banks. Cobase improves cash visibility, control and efficiency. The solution is primarily designed for large corporates.

Functionality
Main features of the platform are a central Payment Hub, Cash Management, Treasury modules and the Robo Assistant. These modules help companies to streamline their payments and reporting, cash pooling, and basic treasury functions.

One user administration
Cobase provides one central user administration. Users and authorisation schemes can be centrally managed for all subsidiaries or departments and only one security token is needed for each user. The workflows can be configured as needed. Users do not have to be set up and maintained at each bank anymore, which saves a lot of effort.

Bank connectivity
Cobase uses direct connections, Open Banking APIs or traditional networks such as SWIFT to integrate with banks. File transformation, data mapping, and connectivity are all covered. Technical complexity is managed by Cobase and kept away from the company.

About Cobase
Majority owned by ING Bank NV, Cobase operates independently under its own brand and under its own management.

For more information about Cobase, please contact CEO Jorge Schafraad, at [email protected] or visit their website.

 


Jorge Schafraad

CEO at Cobase

 

WHAT DO TREASURERS THINK?

| 03-12-2018 | ENIGMA Consulting |

 

Much has been written over the years about the role of treasury. The modern treasurer is strategic, collaborates with the businesses it serves, and is using automation, offshoring and treasury centers of excellence to consolidate and standardize tactical areas. And more and more, seems that the success of the treasury is dependent on how well it adapts to – and operates in – an increasingly virtual environment with many changes across the value chain.


In order to follow the latest trends and developments in the corporate treasury landscape, Enigma Consulting and the Rabobank have developed the Treasury Barometer. We believe in an independent barometer for and by Treasurers, and have, therefore, created an Editor Panel, consisting of Corporate Treasurers that monitor the quality and relevance of the Treasury Barometer.

The Treasury Barometer 2018 is based on a survey held in mid-2018 and presents the key results of the 5th  Treasury Barometer. This report presents the latest trends and developments and provides a unique and representative understanding of the Dutch corporate treasury landscape.

This year’s edition included some changes with the objective to improve the reader’s experience.

One change was to shift to an online publication of the Treasury Barometer as we believe that readers prefer a digital copy above a paper one.

And to improve the online reading “experience”, the Treasury Barometer 2018 contains many infographics to present the results in a more concentrated and visually attractive way.

Furthermore, we preselected the three themes of this year’s Treasury Barometer, so that we could provide the treasurers a more interesting survey :

  1. Sustainability
  2. Diversity & Talent development and
  3. Connectivity

Remarkable was that from the moment the Sustainability theme was selected, it seemed that many treasurers decided to start with “green” financing, as the list of this year’s “green” issuers got longer and longer: Gunvor, VolkerWessels, Heerema, Fugro, Schiphol, The Dutch State, Renewi, Macquarie, to name just a few.

One of the early discussions during the editor staff meetings was about whether treasurer is an attractive job, directly leading to questions around Diversity and Talent Development.
The 2018 edition gives you some answers, although we also observed that the survey is primarily answered by men and the three interviews are with male only, despite the effort to get interviews with female treasurers.

We were also interested to understand how treasurers prepare themselves for technical innovations. The majority of treasurers responded that they do not have a technology roadmap, although the technology innovations and value chain changes are developing rapidly. Whether this is caused by the fact that most treasurers see themselves as “follower” instead of “early adapters” or that the technology developments are simply too overwhelming is hard to say.

The full report is available for download at: www.treasurybarometer.nl

 

 

ENIGMA Consulting

 

 

Cash flow prognoses zijn van vitaal belang in corporate treasury

| 29-11-2018 | Cashforce | treasuryXL |

De lancering, eerder deze week, van het nieuwe liquiditeitsbeheerportaal van HSBC, moet begin volgend jaar worden gevolgd door een nieuw Cash Flow Forecasting-platform, dat laat zien hoe liquiditeitsbeheer en kasstroomvoorspellingen met elkaar verweven zijn. Er is een groeiend aanbod van leveranciers die zich op dit gebied concentreren, waaronder onze partner Cashforce.

Cashforce maakt verbinding met alle gegevensbronnen die het geld beïnvloeden, om een ​​zeer nauwkeurige cash forecast te bouwen. Slimme algoritmen worden toegepast om nog meer nauwkeurigheid te bieden en zullen
pro-actieve optimalisatie acties tonen. ”

Het belang van kasstroomprognoses neemt steeds verder toe. Bruce Lynn, Managing Partner bij The FECG LLC, is bezig met de laatste fase van zijn onderzoek onder 200 bedrijven wereldwijd en hun gebruik van cash flow forecasting en werkkapitaal management. Hij is van mening dat het belang van cash flow forecasting toeneemt omdat er sinds 10 jaar weer sprake is van een stijgend renteklimaat. Hij vindt dat:

  • De ‘beste’ bedrijven dit belang zullen erkennen en trachten de inherente variaties te verkleinen die zullen optreden omdat de toekomst onzeker is.
  • Ze zullen moeten investeren om “zichtbaarheid” te verkrijgen over hun “stromen” (werk, contanten, boekhouding, informatie). Investeringen zullen niet alleen veranderingen op treasury afdelingen, maar ook operationele afdelingen met zich meebrengen waar de grotere cashflows plaatsvindt.
  • De “slimmere” bedrijven zullen hun personeel naast de bestaande beloningen ook belonen voor het genereren van meer en stabielere kasstromen
  • Probleem (zoals onderzoek lijkt aan te geven): gebrek aan informatie op operationeel niveau; relatieve onbelangrijkheid van kasstromen versus winst. Hoge afhankelijkheid van de technologie van 1980 (dat wil zeggen spreadsheets)
  • De overige bedrijven zullen hun kapitaalkosten zien stijgen naarmate ze overgefinancierd raken of te weinig investeren. Het risico zal vooral hoog zijn voor bedrijven die vreemd vermogen gebruiken om het verwachte rendement van het eigen vermogen te verhogen.

Binnenkort zal er een survey uitgebracht worden waarvan de resultaten hier gedeeld zullen worden.


Cashforce – Cash forecasting & Smart Treasury

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Reminder: Masterclass Cash Management

| 27-11-2018 | treasuryXL

Op 6 december 2018 organiseert Alex van Groningen een masterclass Cash Management. Hoe spoort u verborgen cash op en hoe speelt u het vrij? Richt een effectief cash management systeem in en optimaliseer het bedrijfsresultaat, het werkkapitaal en de liquiditeitspositie.

 

Hoe spoort u verborgen cash op en hoe speelt u het vrij?

Cash management expert Eva Borstlap onthult aan de hand van diverse actuele casussen (o.a. Blokker) maatregelen die met beperkte actie een groot positief effect op zowel de effectiviteit, het rendement als de liquiditeit van de organisatie hebben.

Onderwerpen

  • De essentie van cash management: wat is het wel en wat is het niet
  • De relevantie van een gezonde focus op cash
  • Financiële besturing; samenhang tussen de operationele-, investerings- en financieringsactiviteiten en hoe deze te meten (oa EVA/NPV, futures en SWAPS)
  • De essentie van werkkapitaal en waarom pure sturing op werkkapitaal niet zinvol is
  • Theorie vs praktijk; waarom is de praktijk weerbarstig (Blokker casus)?
  • De directe relatie tussen cash management met de operationele processen en de verborgen cash die in elke organisatie aanwezig is

Voor wie?

Dit programma is specifiek ontwikkeld voor (assistent) financial- en business controllers, financieel managers en andere financiële professionals die nieuwsgierig zijn hoe zij zelf een concrete bijdrage kunnen leveren aan het genereren van extra cash.

Programma

09:30 – 10:00 uur | Introductie

  • Introductie en verwachtingen deelnemers
  • Waarom de focus op cash essentieel is
  • Een wandeling door een Jaarrekening; relatie tussen resultaat en cash

10:00 – 11:00 uur | De essentie van Treasury

  • Groepsopdracht rondom het thema ‘resultaat en cash’
  • Theorie: De essentie van Treasury en de relatie met de operationele de bedrijfsprocessen
  • Welke rol kan/moet een financial hierin spelen?

11:00 – 11:15 uur | Koffie en thee pauze

11:15 – 12:30 uur | Financiële besturing: theorie en praktijk

  • Theorie: wat is de financiële besturing van een organisatie (operationele-, investerings- en financieringsactiviteiten)
  • Welke parameters en risico management zijn relevant (oa de werking van Futures, NPV, EVA, Swaps)
  • Theorie vs praktijk; waarom de theorie niet altijd werkt (case ABNAMRO)

12:30 – 13:00 uur | Lunch

13:00 – 15:00 uur | Verborgen cash in het werkkapitaal

  • De essentie van werkkapitaal; waarom het vooral geen ‘finance feestje’ is
  • Methoden om werkkapitaal eenvoudig en snel te kunnen beoordelen
  • Inzoomen op de verborgen cash in de operationele bedrijfsprocessen
  • Waar zit de cash ‘verstopt’?

15:00 – 15:15 uur | Koffie en thee pauze

15:15 – 16:00 uur | Opsporen van verborgen geld & Blokker

  • “Het opsporen en vrijspelen van verborgen cash” in de eigen praktijk
  • Introductie Blokker; Wat is er aan de hand; een wandeling door het Jaarverslag

16:00 – 16:45 uur | ’Hunt for cash programma’ Blokker (Case)

  • Interactief spel om te ervaren voor welke dillema’s een bedrijf als Blokker staat en waarbij de theorie en alle genoemde ervaringen in de praktijk worden gebracht

16:45 – 17:00 uur | Samenvatting, evaluatie en afsluiting

Bel voor meer informatie of een offerte met Ivo ten Hoorn op 020 639 0008.

Corporate Trade Finance Products: What is Factoring and Forfaiting

| 26 -11-2018 | by Nijay Gupta | treasuryXL |


In view of Credit & Geo-political Risk worldwide, the Corporates & Financers (mainly Bankers & Financial Institutions) are offering plenty of products to Sellers & buyers to enable them to do Trade.  The most sought after product  now a days is Factoring & Forfaiting for Domestic & International Trade.

What is Factoring & Forfaiting (Post shipment Finance)

Factoring: A sort of Financial arrangement between the Seller & Intermediary Bank, to sell its Accounts Recievable rights in favour of the Factor (intermediary bank) to collect/discount the proceeds of the bills/Invoices. A business will sometimes factor its receivable assets to meet its present and immediate  cash needs.

This may involve discounting of bill by the Factor Intermediary . Generally the discounting is done upto between 80 to 90% of the invoice value on Recourse basis. The factor charges, Collection, Administration, Management , Credit Protection & Financing (if done) cost to the Seller/exporter.  Generally, the Factor insist for Seller to have this arrangement for all their sales, which is generally not liked by the sellers/exporters, those are keen to give business only for the troubled countries/buyers with Geo-political & other problems. The Factor helps seller collection of Invoice proceeds thru all legal means through their world-wide branches/subsidiaries or correspondent banks network.

Forfaiting:  Forfaiting is a factoring/discounting arrangement used in Domestic/International Trade Finance by Sellers/Exporters who wish to sell their receivables  to a forfaiter (intermediary Bank, Financial Institution or a Finance Company) on without recourse basis.

This can be for short-term (1 month) to Long-term (10 years) Bills with or without LC on Without Recourse basis.  The Forfaiter collect its discounting fee upfront for the entire period and it is the best arrangement for the exporter and intermediary Forfaiter.  Its win-win for both, as exporters get the bill proceeds upfront (as all risks are passed on to the Forfaiter) on without recourse basis and gives good income upfront to the Forafaiter. Paying upfront interest to the Forfaiter is permissible  by RBI under FEMA 1999.

Many Foreign Banks in India are offering these products on aggressive basis, even to the exporters does not have account relationship with them, in order to earn comission, fee & Interest on Factoring & Forfaiting business for their buyer customers LC or without LC, in other countries. Interest Rates are at MCLR or Libor relates rates of interest with lower mark-up.  Infact, sometimes, its cheaper for the exporter to get Finance under these schemes cheaper than normal Interest rate charged by Banks to exporters under Pre-shipment or Post-shipment Finance schemes.

 

Nijay Gupta

Founder & CEO NK GUPTA Consulting

 

 

Treasurer Test, you can be one of the last peer group members!

| 22-11-2018 | by  Pieter de Kiewit |

“Under 20% of the treasury population completed a formal treasury education. And over 50% of decision makers in the recruitment of treasurers does not know about the discipline.” We are one of the launching partners of the Treasurer Test that can bring an objective measurement that can tackle problems resulting from the described issue. Others are the Vrije Universiteit (Amsterdam), the University of Applied Sciences of Utrecht, software & assessment developers and law experts.

Key element of the test is the comparison with peer groups. These groups are defined by number of years of experience in treasury of its’ members. Our role as launching partner is asking 100 relevant peer group members that will create the benchmark that future testees will be compared with. Peer group members do not pay the €595 the test will cost when ready, but only €1. We carefully invited most, but there are still a few places left, especially in the group with under 9 years’ experience. If you are interested, please contact Roy Baaten, the community manager of treasuryXL at [email protected]

When the number of 100 is reached, reports will be sent out and the Treasurer Test is ready for use. We expect a lot. At Treasurer Search we will use the test in our committed searches and many other situations, when relevant. First expectation is to further improve the match making process. Also in choosing education, coaching, outplacement, team formation and salary benchmarking the test can come in handy. Perhaps even showing a CFO about the complexity of the discipline can be done. There is a peer group “no treasury experience”.

We look forward to the analysis that can be made after a bigger group of people completed the test What will we see in the correlation between age, education level, nationality on one hand and treasury skills level on the other? We expect to further contribute in raising the level of corporate treasury and hope you will join us.

 

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search