GDPR: From compliance headache to business opportunity

|24-07-2018 | Reuters | treasuryXL |

The Information Commissioner’s Office has described the new GDPR laws as “the biggest change to data protection law for a generation”. Businesses will face a maximum fine of up to £17 million or 4% of global turnover, if they breach the EU rules. These are critical, but turbulent times for businesses across Europe. However, if organisations of all sizes play their cards right, GDPR can be transformed from a compliance nightmare, into a business advantage.

Competitive advantage

“General Data Protection Regulation is generally seen in a fairly negative light, particularly by organisations. But I think there is a huge opportunity to differentiate services based on trust. The consumer gains from interaction with any institution,” according to Managing Director and Data Protection Officer at Barclays, Jon Rees. He adds: “Our recent research has shown that the number one concern – across many different demographics and usages – is security of customer information, and how it’s being used. There’s a competitive advantage to be had by applying GDPR in a positive way.”

Consistency by design

As a ‘complex corporate’ itself, Barclays has seen another major benefit of GDPR, and that’s the obligatory enforcement of good practice and consistency by design across organisations, in terms of the harmonising of data systems. While it’s still early days, transparency is fast-becoming the buzzword of GDPR’s inaugural year.

Consumer confusion

There are, predictably, some areas of confusion that are emerging, especially for consumers – in part accelerated by miscommunication. People are confused about what their individual rights are when it comes to personal data and consent, and right to deletion. Some are interpreting consent as: ‘unless I’ve given a firm my approval, it has no right to use my data’. While this is not correct, the lack of understanding is unsurprising, given the complexities of GDPR and it being in its infancy. However, this is where businesses can once again shine. Those that are helpful, and offer clear communication with their consumers on GDPR, will come out on top as trustworthy brands that always put the customer first. A more consumer-centric approach is, after all, at the heart of GDPR.

Visit the website of Reuters to read the full article.

 

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Heeft u een bankkosten strategie?

|23-07-2018 | by  Pieter de Kiewit |

Als niet-benoemd ambassadeur van het corporate treasury vak wil ik een lans breken voor de bewustwording over bankkosten. In mijn beleving wordt hier te weinig aandacht aan gegeven met onder andere als consequentie grote risico’s, te hoge kosten en onnodige afhankelijkheid van de huisbank. Een les die we, denk ik, allemaal wel hebben geleerd intussen is dat we niet moeten kopen wat we niet begrijpen. Laat me een paar voorbeelden geven.

Sinds de Vestia bom barstte is er veel gebeurd rond het thema derivaten. Niet alleen grote organisaties bleken deze bankproducten te hebben afgenomen. Soms werden ze aangeschaft omdat er klakkeloos werd geluisterd naar een bankier (die werd beloond voor het zoveel mogelijk verkopen). Soms omdat er werd verwacht dat de rente zou stijgen, terwijl hij verder daalde, met grote kosten tot gevolg. Soms goed doordacht en volledig terecht. Deskundigen met enig begrip van het Uniform Herstel Kader verdienen nu een goede boterham met de reparatie van de derivaten chaos.

Tot op heden kopen veel ondernemingen hun vreemde valuta bij hun huisbank zonder te vragen naar transactiekosten en het verschil tussen aan- en verkoopkoers. Men gaat ervan uit dat de bankier de oprechte adviseur is en negeert dat hij wordt beloond op marge omzet. Intussen zijn er diverse partijen die betere koersen bieden, wat mijns inziens niet direct betekent dat ze de betere partij zijn.

Het laatste voorbeeld dat ik wil benoemen is dat iedereen begrijpt dat een piano vervoeren geld kost maar dat men niet beseft dat een betaling doen, oftewel geld vervoeren, ook met een prijs komt. Mogelijk wordt dit veroorzaakt omdat retail banken in Nederland van oudsher geen kosten aan hun klanten berekenden voor het aanhouden van een rekening courant, terwijl dit in het buitenland wel de standaard is.

Hoe hiermee om te gaan? Vanzelfsprekend kan ik hier niet uitputtend over zijn. Een goed begin is nadenken welke financiële producten uw organisatie afneemt: financiering, cash management en risk oplossingen. Heeft u ze daadwerkelijk nodig, wat kosten ze en waarom worden ze afgenomen bij een specifieke partij. En let wel, kosten overwegingen hoeven niet de dominante te zijn. Gemak, expertise en, ook al klinkt het onzakelijk, het goede gevoel zijn ook belangrijk. Boerenverstand is een goed startpunt en van daaruit kan overwogen worden expertise in te kopen. Dat kan zeer laagdrempelig (zie de Flex Treasurer) tot en met zeer hoogwaardige consultants. Sommigen bieden hun diensten no-cure, no-pay aan.

Ik nodig u uit om kritisch te zijn en stel mijn netwerk graag tot uw beschikking.

 

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Brexit – Cash Pools geplaatst in Londen

| 19-7-2018 | Kasja Reinders | treasuryXL

Iedereen hoor je erover maar wat komt er nou eigenlijk bij kijken en welke scenario’s hebben we? Veel internationale bedrijven denken na over wat ze moeten gaan doen als ze hun Cash Pool hebben in Engeland. Hier rijzen een aantal vragen:

 

Harde Brexit

Dan ligt het voor de hand om de bankrekeningen van non UK-entiteiten die in de UK worden aangehouden over te plaatsen naar Nederland of een ander Europees land.

Dit heeft veel impact;

  • Nieuwe Masteraccounts moeten geopend worden
  • Nieuwe bankrekeningen voor de affiliates moeten worden geopend
  • Sweep documentatie moet geregeld worden
  • De nieuwe rekeningnummers communiceren naar de klanten en/of leveranciers.
  • Briefpapier aanpassen
  • Interfaces naar de desbetreffende TMS/ERP Systemen en GL Ledgers
  • Interne policies moeten worden aangepast

Soft Brexit

Het is niet duidelijk wat de consequenties zijn. Als bedrijf kun je besluiten om de Master Accounts te verplaatsen en de bestaande lokale bankrekeningen te laten sweepen naar deze Nederlandse Master Accounts.

Later kan het bedrijf de lokale bankrekeningen overplaatsen naar Nederland en dan kunnen de klanten en/of leveranciers geïnformeerd worden. Briefpapier laten aanpassen, interfaces in de desbetreffende TMS/ERP systemen implementeren en GL Ledgers, etc.

In deze situatie heb je als bedrijf gewoon meer tijd om de zaken goed te regelen.

Geen Brexit

Als de Brexit niet doorgaat zul je je als bedrijf moeten afvragen of je toch je Cash Pools in Engeland houdt of veranderd naar Nederland met inachtneming wat er veranderd moet worden en welke impact dit heeft op resources, kosten, etc.

Timing:

Belangrijk is dat je als bedrijf nu al een plan gaat maken wat je eventueel voor 29 Maart 2019 geregeld moet hebben.

 

Kasja ReindersKasja Reinders – Treasury/Cash Manager

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Event: TOMORROW’S EUROPE: Uncertainty and unprecedented opportunity

| 17-07-2018 | Reuters | treasuryXL |

Join this dynamic discussion where a panel of economic, geopolitical and business experts will explore what ‘Tomorrow’s Europe’ may look like.

Europe is at a crossroads. It faces many challenges – from globalisation and geopolitics, to the impact of new technologies and trade agreements. But change also brings great opportunities for the brave and adaptable. Above all, innovation, entrepreneurship and investment will be the foundations of future prosperity. And businesses – as the main creators of jobs and growth – have a pivotal role in determining what ‘Tomorrow’s Europe’ will become.

Our expert panel will discuss

  • What will drive economic growth?
  • What are the geopolitical factors that lie ahead?
  • Which businesses and markets will bring investment to the region?
  • What will propel innovation and competition?
  • How new regulations and a post-Brexit trade landscape will shape the decades to come

All this, and much more, up for debate at the Axica, Berlin on 19 September 2018.

Agenda

6:30 pm: Arrive and sign in
7:00 pm: Welcome and introductions
7:10 pm: Panel discussion
8:00 pm: Audience Q&A
8:30 pm: Networking drinks reception

Meet the Speakers

(Additional panellists to be announced shortly)

Özlem Bedre-Defolie

Associate Professor of Economics, ESMT

Özlem Bedre-Defolie is an associate professor (with tenure) of economics at ESMT Berlin. Her research has been published in leading Economics, Marketing and Industrial Organization journals, including American Economic Review, Journal of Economic Theory, American Economic Journal: Microeconomics, Marketing Science, International Journal of Industrial Organization.

Ferdinand Fichtner

Head of Department, DIW Berlin

Dr. Ferdinand Fichtner is Head of the Forecasting and Economic Policy Department at DIW Berlin. He holds a Ph.D. from the University of Cologne and wrote his dissertation thesis about the effects of monetary integration on economic welfare. He is one of the leading German experts on macroeconomic policy, with frequent appearances on national and international media and close connections with German and European policy makers.

Josef Janning

Head of European Council on Foreign Relations, Berlin Office

Josef Janning joined the European Council on Foreign Relations in April 2014 as Senior Policy Fellow in the Berlin Office. Josef has published widely on European Affairs, International Relations, EU foreign and security policy, German foreign and European policy as well as global affairs. On these issues he also is a frequent commentator with German and international media.

Panel Moderator: Vanessa Cuddeford

Vanessa Cuddeford is a journalist and presenter with 15 years’ experience. She anchors and reports for the BBC and Reuters, regularly presenting news, arts and business programmes for international broadcasters.

This event is for:

Business leaders / senior executives / entrepreneurs

For more information or if you want to register for the event visit the events website.

 

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The link between financial performance and working capital metrics

| 10-07-2018 | Theo Paardekooper | treasuryXL

Managing working capital is an important task for treasurers in order to reduce the financial risk of a company and to improve the financial stability. In various studies the costs and benefits of working capital have been claimed.

According to Blinder and Maccini (1991), supply costs and price fluctuations can be reduced by larger inventories and this can prevent loss of business due to scarcity of products. However, there are also effects of investment in working capital, which may lead to a negative impact on firm value. Firstly, keeping stock available imposes costs such as warehouse rent, insurance and security expenses, which tend to rise as the level of inventory increases (Kim & Chung, 1990). Secondly, larger investments in working capital, involves opportunity costs and financing costs (Kieschnick, Laplante, & Moussawi (2013) and this will increase credit risk. Summarizing, working capital management affects the perational performance of the company and external circumstances can influence working capital management accordingly. The corporate treasurer is the key person to create working capital policies and initiate managerial focus on this topic. In order to define the added value of a treasurer in the perspective of working capital management the main question is:

Is there a link between the financial performance of a company and its working capital metrics?

This question can be mathematically rephrased as

Where the working capital metrics are defined in the Cash Conversion Cycle (CCC)

Several studies conclude that a faster rise in the cost of higher investment in working capital relative to the holding of more inventories and or granting trade credit to customers may lead to a decrease in corporate profitability (Deloof 2003) and Shin and Soenen (1998) find in a comprehensive study a strong negative relationship between working capital metrics and corporate profitability for US corporates. Most studies focuses on the linear relationship between financial performance and working capital metrics, however a non-linear relationship between financial performance and working capital metrics is at stake. On top of the non-linear relationship industry specific effects might play an important role. After investigating the statistics of a database containing the financial information of 39.052 non-US listed corporates in a time period between 2010 and 2017 2 samples of scatter charts below give a view on the data

  • The results indicate that in 50% of the industries a relationship between financial performance and working capital metrics is confirmed, and this relationship is non- linear. A certain optimum for financial performance is at stake.

  • The cash conversion cycle is industry driven as we see a wide range of different cash conversion cycles over various industries.
  • Working capital management can improve the financial performance, however based on the data, we see a lot of different results in the working capital metric compared to financial performance. This can indicate there is room for more focus on working capital management

 

Theo Paardekooper

Independent treasury specialist

 

Wat zijn de mogelijkheden van een Flex Treasurer binnen het MKB?

09-07-2018 | treasuryXL |

Laagdrempelige en hoogwaardige expertise van ZZP’ers uit de treasury wereld voor kleine en middelgrote organisaties die geen treasurer of cash manager in dienst hebben.

WAT IS EEN FLEX TREASURER?

U bent de eigenaar van of werkt in een kleine of middelgrote organisatie die geen treasurer of cash manager in dienst heeft. U denkt waarschijnlijk dat er binnen uw organisatie geen plaats is voor een dergelijke functie. Maar, oordeel niet te snel: ook het MKB heeft behoefte aan professionals als het gaat om treasury en cash management. Toch gaat het aannemen van iemand vaak een stap te ver.

Welke mogelijkheden zijn er?

treasuryXL en Treasurer Search hebben de handen ineengeslagen om laagdrempelige en hoogwaardige expertise van ZZP’ers uit de treasury wereld te koppelen aan kleine en middelgrote ondernemingen die geen treasurer of cash manager in dienst hebben.

We willen met deze dienstverlening geen substituut worden voor de grote treasury consultancy organisaties maar we bieden graag ondersteuning bij vraagstukken die nu onbeantwoord blijven. U kunt de vraag aan ons stellen en wij zullen u vrijblijvend in contact brengen met de juiste deskundige. Leidt dit tot een samenwerking, dan kan dit op urenbasis, als lump sum of in een abonnementsvorm ingevuld worden.

Beschikbare diensten

Wij kennen Flex Treasurers uit verschillende vakgebieden: risk, bankrelaties & technologie, regulations, non-profit, financiering, trade finance, cash management, SME & overige gebieden.

Meer informatie kunt u terugvinden op onze website. Hier kunt u bijvoorbeeld een overzicht van de diensten vinden die we aanbieden in samenwerking met de Flex Treasurers zoals bijvoorbeeld een treasury  quickscan en een treasury coach.

 

Highlighted partner: Treasurer Search

| 3-7-2018 | treasuryXL |

Over the last two years treasuryXL built a community with and for corporate treasurers and all interested in the profession. Starting from the Netherlands our network expands into surrounding countries and we cooperate with more and more partner organizations. In the summer months we will present the most prominent ones.


Treasurer Search

In 2009 Pieter de Kiewit founded Treasurer Search after an international career of 15 years in consultancy and management of two prominent recruitment companies. In the first he learned about executive search of, amongst others, group treasurers of listed firms. In the second he was responsible for building a number of international subsidiaries of the Dutch market leader in the mid segment recruitment market. The German the most prominent one. Approaching 40, he decided to continue as entrepreneur.

Treasurer Search finds candidates for interim assignments and permanent positions. From graduate level to group treasurer of a listed firm. Clients are headquarters of large corporates, international treasury hubs, treasury consultants, non-profit organizations and some companies in financial services. In the Netherlands and increasingly international: recent recruitment has been done in Belgium, Luxembourg, Germany and Switzerland. Job types include cash & treasury operations management, risk, corporate & project finance, treasury IT and treasury control.

By now, Team Treasurer Search holds 6 members, 3 of them recruitment consultant. With their niche market approach they invest in thorough job content expertise and a very warm network. Over 90% of the placed candidates already had a meeting with Treasurer Search before the assignment was landed where he or she started in. The team is stable, something the recruitment industry is not known for.

Having a keen interest in what’s happening in treasury and knowing not each contact with a candidate and client can be about job openings, Treasurer Search takes a proactive network role. Most often as a courtesy Treasurer Search connects people with expertise with those seeking treasury knowledge. For this team members are in constant contact with educators, professional bodies and other suppliers of treasury solutions. All this makes Treasurer Search an obvious partner of treasuryXL.

For more information check out:

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Best read articles of all time – This is why corporate treasury is great – The laymen introduction to corporate treasury

| 26-06-2018 | by Pieter de Kiewit |

My father was a civil engineer and would have liked one of his kids to follow in his footsteps. Regretfully for him we all went in different directions, me landing an engineering degree of the wrong type. What I did like to learn from my first business management professor was about creating bridges between various functional areas. That is what I have been doing as a recruiter for almost 25 years, the last 8 solely in corporate treasury. Why treasury?

All organisations, even the small ones, can benefit from good treasury. Only the bigger ones hired permanent experts. The main three areas, perhaps oversimplified, they focus on are:

  1. Money logistics: opening and closing bank accounts, doing (bulk) payments, forecast money coming in and going out;
  2. Managing (treasury) risk: understand and manage the implications of interest or currency fluctuations. If your manufacturing costs are in Euro and you sell in Dollars and the price of the Dollar drops, what to do? What to do if you have excess cash on your current account;
  3. Funding: where do you get your money for new or current business? Bank loans, equity, mortgage, leasing?

This does not sound sexy, does it? But do understand that during the crisis treasurers found solutions for companies how to survive. They found funding to pay salaries, helped sales finding creative funding solutions to make complex transactions achievable, helped prevent companies going belly-up due to currency exposures, forced banks to offer better solutions at a more acceptable price.

Treasurers manage huge amounts of money and operate very close to the CFO. They are involved in mergers & acquisitions, reorganisations and international expansion. They act in small numbers but have huge impact if they would stop doing their work. And the job type evolves continuously. Creating new treasury bridges to traditional job types like accounting, tax, sales helps all doing a better job. The academic world is showing increasing interest. In the Netherlands the post graduate education at the Vrije Universiteit is becoming more prominent in the treasury community. Corporate treasury is very dynamic!

What I love doing is helping CFO’s, HR, internal recruitment and senior treasury managers with their staffing questions. What qualifications and personality type matches best with your current and future business situation. If you only hire one treasurer per year, what do you need to know to choose the best candidate? I hope now you can understand my passion for creating bridges in treasury and recruitment.

I look forward to your thoughts to the above and further contact,

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Best read articles of all time – Corporate Governance – It is all about the rules

| 20-06-2018 | treasuryXL |

Corporate governance is the rules and processes by which a company is controlled and directed. It is a balancing mechanism between different stakeholders – directors, shareholders, management, government, external financiers etc. The treasury function performs highly skilled and complex tasks to ensure continued and harmonious execution of all cash related functions. At the same time, there is much interaction with both internal and external stakeholders. The corporate governance within the treasury function should always be performed in accordance with predetermined and approved metrics as laid out in Treasury statutes. This means undertaking operations that are consistent with the governance within the corporation.

Corporate governance helps to define the strategies of a company, and highlight how these strategies will be implemented throughout the policies, procedures and working processes. Normally, Treasury statutes are drawn up by treasury and management – detailing the accepted methodology to perform the approved tasks – whilst responsibility and approval is granted by the directors. Once agreed upon, the statutes have to be observed by staff carrying out their duties and responsibilities.

As the treasury function is highly complex – both in financial products as well as regulatory frameworks – both directors and management need to fully comprehend the functionality as well as the implications of different financial products and services. The onus lies on the treasury department to ensure that other stakeholders not only have enough knowledge about the products, but also awareness and understanding of the relevant risks. This is vital to ensure that the right decisions are made at the highest strategic level.

Directors and management need to understand:

  • Financial risks undertaken whilst running the business on a day-to-day basis
    Operational controls to protect the business from fraud
    Risks inherent in approved financial instruments
    Strategies used to identify and mitigate financial risk
    How risk is measured and reported
    Potential exposure as a result of the agreed policy
    Acceptance that not all risks can be qualified and quantified
    The influence of external factors – market risk, counterparty risk, interest rate risk etc.

Proactive role of the Treasury

  • Accurate valuation of financial products used – if you cannot value it, you should not be using it
    Quick recording of all transactions
    Ensuring with controllers that all financial products are correctly input for accounting purposes
    Implementation and management of agreed Treasury policies
    Determining if bank covenants are being maintained
    Ensure compliance with all external regulatory frameworks
    Collaborating with auditors – both internal and external

Policy is influenced by strategy and objectives. The role of Treasury is to help to fulfil those objectives. Treasury has a dual function – it both mitigates risk as well as being the source of risk. Treasury enters into financial transactions on behalf of the business in order to mitigate risks; however, something like an unauthorised trade could subject the business to financial loss.

It is essential that directors and management understand both the risks that treasury manage, together with the potential risks that those transactions can create.

Blockchain for trade finance: A network business

| 19-06-2018 | Carlo de Meijer | TreasuryXL

Trade finance has become one of the top focus issues for blockchain technology use. The number of pilots and other trials that are looking into the opportunities of blockchain technology for trade finance and supply chain have dramatically increased in 2017 and intensified this year. The sheer complexity of trade finance is thereby reflected in the variety of potential solutions. Different parts of the ‘trade finance supply chain’ had their own blockchain initiative. A large number of these pilots however stopped or failed being too narrow in their set-up. These were mainly focused on certain – and limited – aspects of the trade finance chain.

The various parties who are involved in the trade finance and supply chain business however are increasingly becoming aware that stand-alone solutions are not the answer to the various challenges in the trade finance industry. The success of using blockchain in trade finance purposes stands or falls with networks effects and if it is adopted widely. They are increasingly convinced that as well as developing a platform and blockchain solution, a network must be in place that covers all the parties in the trade finance chain so that the full transaction can be completed on the blockchain.

As a result we have seen the upcoming of blockchain trade finance networks with exotic names like Batavia, Marco Polo, We.Trade and more are expected to follow. In this blog I want to go somewhat deeper in these various offerings.

Trade finance: a complex process

Trade finance is a complex process. Various parties from exporters, importers, banks, truckers, shippers, custom agents and regulators all require checks and verifications at various points along the chain. Each interlocking part of the chain depends on successful completion of the previous phase and on reliable information.

Banks thereby play a large role in the trade finance chain, notably in the supply of letters of credit and other financing mechanism. Letters of credit are the most widely used way of financing between importers and exporters, helping guarantee trade transactions. At the moment buyers and suppliers use a letter of credit typically concluded by physically transferring paper documents to underpin transactions. This process however creates a long paper trail and it may take between five and ten days to exchange documentation.

A network business

Trade finance is a network business. It is an activity that often involves multiple counterparties in various and far-away parts of the world. Creating a blockchain trade finance ecosystem that combines all the different stages of trade from production to end-delivery is a must. For blockchain trade finance platforms to work in an optimal way this means on-boarding other banks, regulators, customs and all parts of the trade cycle. This asks for the setting up of blockchain-enabled trade finance platforms or networks with common standards enabling interoperability.

“Of course we are closely monitoring initiatives among all the other consortia that we know about developing trade finance on blockchain and we are mindful of ensuring inter-operability where we can”. Hubert Benoot, Head of Trade KBC and chairman of We.Trade

Read the full article of our expert Carlo de Meijer on LinkedIn

 

Carlo de Meijer

Economist and researcher