Uitgelicht: De medewerker als medeaandeelhouder

| 11-08-2016 | Udo Rademakers, Simon Knappstein |

crowd

 

Deze week verscheen er een opiniestuk in het Financieele Dagblad waarin gesteld wordt dat medewerkersparticipatie een belangrijke bijdrage kan leveren aan de verkleining van de tegenstelling tussen arbeid en kapitaal. Door de medewerker in de rol van medeaandeelhouder te plaatsen zullen de belangen van aandeelhouders, onderneming en medewerkers meer op één lijn komen, aldus de schrijver van het artikel. Wij vroegen experts Udo Rademakers en Simon Knappstein naar hun mening.

 

udorondUdo Rademakers – Treasury Consultant

“Het laten participeren van medewerkers in de onderneming kan zorgen voor enerzijds meer betrokkenheid door de medewerkers en anderzijds bind je ze langer aan de onderneming (wegens clausules dat bij ontslag je participaties vervallen). Door een grotere groep mensen te laten participeren, is de kans op „gemotiveerde“ medewerkers“ die naar hetzelfde doel toe werken groter.

Er zijn de laatste jaren excessen geweest waar het top-management van bedrijven enorme geldsommen hebben ‘gecashed’ en de „normale medewerker“ met lege handen is blijven staan (of zelfs de baan verloren heeft). Het verschil in macht, maar door de participatiestructuur in dit soort gevallen, ook een duidelijk verschil in doelstelling, maakt de financiële kloof tussen arm en rijk alleen maar groter en is vanuit mijn optiek lastig te verdedigen.

Door participaties als een salaris component te integreren, maak je de medewerkers meer “entrepreneurs” en uiteraard zijn er mensen die liever kiezen voor vastigheid. Afhankelijk van de doelstelling van het bedrijf en de strategie, zou je hierdoor verschillende typen mensen aan je bedrijf kunnen binden.”

 

simonknappsteinrondSimon Knappstein – Owner of FX Prospect

“Het artikel stelt dat medewerkersparticipatie (personeelsaandelen) de tegenstelling tussen arbeid en kapitaal bij door private equity gefinancierde bedrijven kan verkleinen. Dat lijkt me theoretisch misschien mogelijk, maar praktisch gezien een onrealistisch idee.

Bij beursgenoteerde ondernemingen met personeelsaandelen- en optieplannen is de zeggenschap van het personeel op die manier de facto ook nul. Ik verwacht niet dat zoiets bij private equity opeens anders zal zijn. Om het extreem te stellen, het beetje koerswinst op je personeelsaandeel gaat niet compenseren voor het verlies van je baan wanneer door overmatige schuldfinanciering het bedrijf moet gaan reorganiseren.”

Zal medewerkersparticipatie de tegenstelling tussen arbeid en kapitaal bij , door private equity gefinancierde, bedrijven verkleinen? Laat ons jouw mening weten en laat hieronder een reactie achter.

treasuryXL: summer holiday reading material

| 10-08-2016 | treasuryXL |

Time flies, it is August already. And, for most people, August means holiday time and taking time to read. Have you got your summer holiday reading list sorted yet? The perfect moment to provide you with some summer holiday reading material. These are the top 5 best read articles of treasuryXL from the start. Have a great summer!

 

1 | How can Cash Management influence the Cash Conversion Cycle?

| 27-06-2016 | Olivier Werlingshoff |

credit-card-851502_960_720How can the Cash Conversion Cycle (CCC) be optimized? The CCC measures the time the money is tied up in the sales and the production process before it’s converted into a cash in from customers. When translated in a formula this will be the DSO + DIO – DPO (Day’s Sales Outstanding + Day’s Inventory Outstanding – Day’s Payables Outstanding). Read the full article

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2 | Business case – Funding strategy : how Fastned uses Nxchange

| 09-05-2016 | interview with Claire Tange from Fastned |

logoFastnedFastned’s growing and they’re giving investors the chance to directly buy and trade in certificates of shares via Nxchange. We’ve asked Fastned’s CFO Claire Tange to explain this type of financing. Read the full article [separator type=”” size=”small” icon=””]

3 | Treasury ABC – part I

| 08-07-2016 | Jan Doosje |

S059QDGBOGFor many people Treasury is, as they think, something that is not concerning. Because there are many items that could be mentioned and listed here, I chose to mention the items that have effect on our daily lives, even if we are not aware of the existence of the described item. I’ll call it the Treasury ABC for normal citizens. Read the full article

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4 | 8 Career Hurdles in a Transfer from Banking to Corporate Treasury

| 07-07-2016 | Pieter de Kiewit |

careerAn increasing number of bankers come to my recruitment desk wanting to make a transfer to corporate treasury. This transfer can be made successfully but there are a number of things to take into account. Below the 8 career hurdles, I hear most about, in a transfer from banking to corporate treasury. Read the full article

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5 | Foreign bank accounts, how to include them in your cash pool

| 21-06-2016 | Jan Meulendijks |

janmeulendijksSignificant balances on your foreign bank accounts which are really of better use in the country where your operation is? Include them in an automated cash pooling scheme so that all your funds are available in The Netherlands and no more unnecessary interest is paid! Read the full article

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How to cope with the interconnectivity trap?

| 09-08-2016 | Hans de Vries |

Erphansdevries (1)

 

Electronic Banking has been here for more than thirty years now. And it certainly had a big impact on the way the corporates and banks communicate. Nevertheless, ever since the introduction Treasurers have been struggling to incorporate this feature into their IT ERP environment.

This struggle has proven to be a tough one, due to the ever changing internal ERP environment as a result of various versions of the same ERP system or even various ERP systems within the company due to take-overs/ mergers. And of course there was quite some turmoil in the banking industry itself: the introduction of the Euro, then SEPA with all new transaction formats and regulations, meanwhile a banking crisis etc. Moreover, the ever growing demands on security and compliance pose further pressure on the interconnectivity. As a result, it has become more and more difficult to keep all connections in place and up-to-date. Especially since most corporates are forced to spread their cash management business amongst multiple banks from a risk mitigating perspective. On top of that the Treasurer is facing a radically changed attitude towards data processing operations, from management but also business environment perspective. We now live in an internet world that does not allow for slacking reactions and inefficient procedures. Action is reaction and efficient reconciliation processes are the key for survival.

Treasurer gets stuck in the middle

To optimize this situation, the Treasurer usually finds himself squeezed between the limited IT budgets for optimizing the connections with his back office environment on the one end and his banks on the other with their multiple banking solutions. While SEPA was presented as a unifying power to align all European banks, in practice there still appears to be a great variety in approaches per bank. So therefore in practice, the Treasurers dreams of a flawless interconnectivity often proved to become nightmares and he most of the time winds up somewhere in the middle of an endless implementation process.

Is there a way out?

The answer is negative as long as the Treasurer remains dependent on the internal IT departments and the offered bank solutions. However, if the Treasurer wants to actively take control of this situation there are now options available that will provide the Treasurer with all the connections and security/ compliance checks he needs for his day to day cash management operations. Instead of using the internal systems, the Treasurer can have his back-office systems (ERP and TMS) connect to the banks via a bank independent (SaaS) platform that will take care of conversion and validation of the uploaded files, the authorization according to the internal compliance guidelines and the routing towards all corporate banks. At the same time the electronic bank statements will be collected and forwarded to the back-office systems for automatic reconciliation in the ERP (and TMS) environment. Apart from the authorization of the transactions, no manual intervention is needed.

Next week Hans will introduce you to his ‘way out’: the SaaS platform.

Who is our treasury guru?

| 08-08-2016 | Pieter de Kiewit |

At the end of this year Theo van der Nat will retire. He is professor, working for the Amsterdam based Vrije Universiteit, for the (Dutch) Register Treasurer post graduate education and other organisations. If there was ever one, he is/was the guru of the Dutch treasury community. He deserves his “emeritaat” and brings me to the question: “Who is our treasury guru?”.

Other fields of expertise have obvious ones. In recruitment, the other profession I am following, Dr. John Sullivan is quite prominent. He publishes on a regular basis, introduces new topics and is not afraid to be thought provoking. In marketing, guys like Porter and Ansoff dominated, in self-help Covey was king. In line with Sullivan you heard from them on a regular basis, they were innovative and had a scientific connection (PhD or professor).

In corporate treasury in the Netherlands, there are quite a few very knowledgeable experts. Especially the leaders of the two biggest treasury consultancy organisations know a lot and know how to broadcast on a regular basis. It is obvious they like you to hire their organizations, which prevents them from reaching the guru status. If the DACT organizes its Masterclass, I do not see a treasury expert. If Het Financieele Dagblad publishes about Fintech, FX, interest or hedge accounting, I do not recognize the names.

It is my opinion that corporate treasury deserves a more prominent place in business. A comprehensive strategic vision from a recognizable guru with a long term consistent story would help. I do not pretend to have an overview over the market as a whole. So I ask you: who is your candidate treasury guru?

I look forward to your input,

Pieter de Kiewit

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

How to avoid payment fraud?

| 05-08-2016 | Udo Rademakers |

Generally speaking, most of the fraud cases don’t make it into the paper because companies are so embarrassed that they choose to keep the affair quiet instead. In some cases however, amounts are too substantial to hide and corporates (need to) publish. One case has been published some months ago by Accell, a Dutch listed company. This triggers us again and brings us to the question: how can we control / “treasure” corporate cash the best and avoid possible fraud?

Fraud case

January 2016:
Press release Accell: Accell Group confronted with theft in Taiwan

Financieele Dagblad (Dutch newspaper): Fabrikant Accell voor miljoenen bestolen door Taiwanees

Accell had to publish a fraud case: according to the Annual Report “an employee could circumvent and misuse the availability of certain payment facilities by misappropriation of systems, processes and trust”. It led to a possible loss of EUR 4 million.

In my work as Treasury Consultant, I have seen more cases where in- and external fraud (almost) took place. All cases have been settled “internally”, however, the learnings out of it were huge.

How can your company avoid losing cash by fraud, or more generally, also avoid human errors?

Without going into too much detail, avoiding fraud or mistakes is avoidable by defining clear Accounting and Internal Control Systematics and sticking to those rules. A fraud is almost never 100% avoidable, but the aim should be to find a balance between the risk on fraud, possible impact and costs (or keeping procedures still “workable”).

Define a “Static” Supplier Data process

  • Separate the Master Data responsibility from the Finance area (Segregation of Duties) with clear defined restrictions
  • Request supplier for original documents/data, verify and capture them
  • Capturing of data should be done by a limited number of employees and with segregation of duties (4 eyes principle)
  • Data should be protected and only be possible to amend via a standardized process (by limited number of employees)
  • Documentation

Define a Payment process (stand-alone banking system)

  • Create standardized payment templates (and make sure this cannot be amended)
  • Reduce the number of banks / bank accounts (less systems, less procedures, etc.)
  • No ad-hoc payments should be allowed (or only with additional secured processes)
  • Define limits according to authorization matrices (per person, department, per day, etc.)
  • Define clear segregations of duties
  • Documentation
  • Transparency

If HQ prefers having full cash control, one way could be to let payments only be released by the treasury department. Another way is to define certain limits on local level and higher limits at HQ. Still the 4 eyes principle (or 6 eyes) should be in place for accepting payments content-wise.

Define a Payment process (interfaced out of your ERP system)

  • Make sure the interface from the ERP system to Payment system is secured where data cannot be amended while being stored on a server or in the payment system itself)
  • Automate the process, no manual intervention should be required

Control cash outflow by comparing it to your Cash Flow Forecast

(see as well my posting of May 2016)

  • Automated reporting of cash balances (MT940/MT942) to Group Treasury
  • Analyze daily variations and link it to the forecast
  • Link the annual budget to the annual CFFC (and analyze the delta regularly)
  • Review on a weekly or monthly base your cash variations and analyze it

In case of any questions, business cases or other questions, please do not hesitate to contact me.

Udo Rademakers

Udo Rademakers

Treasury consultant

 

Uitgelicht: Financiering binnen de keten

03-08-2016 | Kasja Reinders, Jan de Kroon |

calendarAfgelopen week verscheen op CFO.nl het artikel ‘Financiering binnen de keten’ waarin wordt gesteld dat het Nederlandse bedrijfsleven nog altijd kampt met een te lange betalingstermijn. Gemiddeld duurt het nu 40,7 dagen voor een factuur wordt betaald terwijl hier wettelijk 30 dagen voor staan. Wat zou het betekenen wanneer alle bedrijven zich aan de wettelijke termijn zou houden? Wij vroegen experts Kasja Reinders en Jan de Kroon om een reactie.


kasjarondKasja Reinders – Treasury/Cash manager

Als alle bedrijven zich aan de betaaldatum houden dan zouden de bedrijven ook beter draaien.
Het feit dat men zeker is van wanneer de facturen betaald worden kan op deze manier ook een betere Cash Flow Forecast gemaakt worden. Een goede Cash Flow Forecast is belangrijk om de liquiditeiten te waarborgen en het bedrijf zo optimaal mogelijk te financieren. Door een 6 maands Cash Flow Forecast op te stellen weet het bedrijf waar hij in de toekomst financieel aan toe is. Dit houdt in dat je AR ook veel beter kan gaan inschatten wat tot op heden nog steeds een groot probleem is voor bedrijven om dit getal juist in te schatten.

jandekroonrondJan de Kroon – Owner & Managing Partner of Improfin Groep 

Op zich is het bewondering waard dat grote ondernemingen initiatieven ontplooien om kleinere toeleveranciers in een betere werkkapitaal positie te brengen. Logisch is het ook dat andere partijen hier wel een rol bij willen spelen. Het vrijspelen van 2,5 miljard euro in vijf jaar lijkt daarbij een mooi streven. Toch is enige relativering gewenst.

Als 26 grote spelers samen aan de gang gaan met die 2,5 miljard dan kan dat m.i zelfs in een jaar. Grofweg betekent dat immers circa 100 miljoen per jaar. De ‘grote’ jongens kunnen dat lenen tegen een fractie van hetgeen de gemiddelde MKB-ondernemer aan rente betaalt. Laat staan wat het sommetje is als veel meer grote partijen er aan mee zouden werken.

Een tegenwerping kan zijn dat het administratief te complex is om sneller te kunnen ‘inlopen’.

Gelet op de purchase to pay-processen en de automatisering die je bij grote ondernemingen mag verwachten, is ook dat niet echt de beperkende factor. Zeker met ERP systemen, E-invoicing, FSSC’s en goed werkende interne supply chains, moet het makkelijk veel sneller kunnen dan die 40 dagen. Op dit punt; prachtige en gewaardeerde intentie. Maar het kan strakker.

Een relativering past ook bij de aanwending door het MKB dat plots ruimer in de jas komt te zitten. Op de eerste plaats is dat de veronderstelling dat de MKB-ondernemer ermee gaat investeren. Gelet op de economische vooruitzichten is dat nog maar de vraag. Groter is de kans dat de huisbank constateert dat de eerder verstrekte werkkapitaalfinanciering wat aan de ruime kant is. Om twee redenen zal er sprake zijn van een inperking van de limiet. Op de eerste plaats het streven van banken naar een kortere balans; immers gedreven door kapitaaleisen van de toezichthouder. Op de tweede plaats betekent een kleinere debiteurenpositie ook een relatief kleinere zekerheidspositie en daarmee een ander kredietrisico. Daardoor zal de prijs een hogere worden als limieten in stand blijven.

Overall dus een prima initiatief dat in veel supply chains tot voordelen zal kunnen leiden door een betere cash conversion cycle en het reduceren van ‘float’. De doelstellingen en de aanpak mogen wat mij betreft concreter en realistischer. Of een creditcardmaatschappij daar een rol in heeft is voor mij dan nog even de vraag.

 

USD/TRY, where to after the failed coup?

02-08-2016 | Simon Knappstein |

TRY

 

In my July consensus FX forecasts report USD/TRY was expected to rise to 3.11 in 12 months’ time. These forecasts were given prior to the attempted coup. 

 

 

USD TRY

Now, two weeks further, the domestic situation in Turkey is clearly stabilising and it is a fine moment to take a look at the opinions of ING and Rabo on the outlook for USD/TRY. Rabo is currently expecting that USD/TRY will move to 2.90 in 1 year and ING is looking for USD/TRY to rise to 3.35 in 1 year’s time.

Rabo holds a relatively constructive view on the Lira based on a fairly strong economic growth and a high carry that tempts investors looking for yield. At the same time it sees the fact that Moody’s may downgrade Turkey’s credit rating to below investment grade as a clear risk. Such a downgrade, based on the post-coup political situation of increased concentrated political powers in the hands of President Erdogan that might lack the necessary rule of law and checks and balances, might trigger another wave of capital outflows from Turkish bonds and weaken the TRY significantly.
ING focuses on the easing cycle and also on the risk of a downgrade, both factors that would clearly keep the TRY under pressure. Furthermore it still sees idiosyncratic risks like the current account deficit, the large currency risk carried by the corporate sector and geopolitical risks all pointing to a weaker TRY.

My take away from this for the near term is that in the current benign market conditions the high carry may be the most important factor supporting the TRY and drive USD/TRY lower. A major risk is that Turkey’s credit rating may be downgraded to junk, maybe already within the next couple of days, which would seriously weaken the TYR.

Simon Knappstein - editor treasuryXL

Simon Knappstein

Owner of FX Prospect

 

The impact of negative interest rates

01-08-2016 | Lionel Pavey |

rating

 

Articles in the press state that large commercial banks are considering charging their corporate clients negative interest rates on credit balances on their bank accounts. This presents us with certain problems – how will clients react?

Withdraw money – known as stuffing money under the mattress. This would present huge security issues on where the money could be safely kept, potential theft etc. Holding cash would give a return equal to zero, which would be greater than depositing it at a bank.

Hoarding – by withdrawing money from the banking system, banks themselves would have less money to lend and would force them to reduce their balance sheets. Conversely the idea would be that people would spend more money rather than save and, therefore, boost the economy. Would it work? We are seeing negative yields on high quality government bonds, for a variety of reasons, yet it appears that negative rates have not boosted spending or investment. The loosening of monetary policy does not appear to have removed market fears.

Disintermediation – banks fulfill a role as intermediar/middleman in the supply chain of finance. If money is withdrawn from the banking system it would be even harder for banks to provide finance to lenders. How could lenders then obtain the funding they require? Virtual marketplaces could be envisaged but there are so many security and safeguard issues that would need to be addressed before this could take place. Most companies can not borrow from capital markets – they rely on banks to provide their funding. Reductions in government bond yields to below zero do not lead to more funding being given to companies.

Worst case scenarios – companies will invest in technologies that are capital intensive leading, eventually, to a fall in the demand for labour. Pensioners who are dependent on interest income will be forced to reduce their consumption leading to a fall in demand. With safe yields being negative the search for yield could lead investors into riskier assets than they would normally consider.

A stamp on physical cash – this is an idea more than 100 years old proposed by Gesell to stop hoarding of cash. Bank notes would need to receive a stamp every month to be considered valid cash. These stamps would have to be purchased (a form of negative interest) and their purpose would be to erode the principle that money is a store of value and could be better used by being actively invested in the economy.

This all sounds very pessimistic, but there are potential gains from negative interest rates for companies.

It would encourage companies to pay their creditors more quickly and, in the process, receive discounts on their purchases outstanding if they pay early. Furthermore it would enable companies to truly examine their whole supply chain across all departments within a company and create a better understanding of the workflow processes concerning cash receipts and disbursements.

For those who like a more rogue approach, you could actually overpay your creditors and ask for a credit note. Now your creditor is funding your negative interest rate and if true economic theory principles are maintained – a fall in prices should follow negative interest rates – then, not only you would have handed over your negative interest rate exposure but you would also benefit from falling prices in the future on the outstanding credit notes with your creditors allowing you to make a relative saving on the future purchase price.

It is clear that steering interest rates will not sort out the economy – other steps outside of monetary policy will have to be taken to restore faith in the economy. But which steps will that be?

 

Lionel Pavey

 

 

Lionel Pavey

Cash Management and Treasury Specialist

 

Treasury ABC Part III

| 29-07-2016 | Jan Doosje |

S059QDGBOG

 

For many people Treasury is, as they think, something that is not concerning. Because there are many items that could be mentioned and listed here, I chose to mention the items that have effect on our daily lives, even if we are not aware of the existence of the described item. Last week I published the second part of the treasury ABC which I’ll call the Treasury ABC for normal citizens. 

 

K is for Key Performance Indicators

Similar for almost all type of branches also implementing Key Performance Indicators can be very helpful for goal setting and monitoring your Treasury performance. E.g. a Treasury Key Performance Indicator can be the achieved return on investment, the percentage of invested capital in AAA obligations, the maximum percentage allowed investment in options or the days you can finance your running business compared with your liquidity. Of course, many more examples can be given.

L is for Loan

You can give a loan or receive a loan depending your need for cash/investment means or your “overliquidity”. A loan is the most simple instrument for Treasury purposes and helps you to finance your (temporary) need for cash or, if you are the lucky guy to give the loan, to increase your return on investment (compared to the percentage you get e.g. from banks or national governments). The loan contract defines the sum of money, the interest percentage you have to pay or the counterparty will receive, the repayment schedule and, if applicable, other conditions.

M is for Mortgage

A mortgage is generally spoken involved when you buy a house or another fixed asset (offices, factory, etc.) Not that many people have the financial means to pay for a house at once so a mortgage is then a way to finance the capital needed. It’s not easy to get a mortgage nowadays because there are a lot of regulations and conditions you have to fullfil before you will get the money on a deposit. In far most of mortgages the house you buy will be the security for the bank who provides you with the mortgage. Furthermore, banks will check if you have enough capacity to pay back the mortgage timely, if are a trusted person, the value of the house when you have to sell it unexpectedly when e.g. you become ill or lose your job.

N is for (Treasury) Note rates

A treasury note rate gives you information of the return of investment if you buy notes from a government. The rate depends of course on the time and risk of the note. If you buy a note from the Greek government you will get a higher yield then a note from Germany but the risk if you will lose your money is higher with the Greek note. Furthermore the yield depends on the kind of security (in time) you buy. The yield for long term notes will mostly be higher then a note for a month. So two main ingredients define the yield you will get; risk and the duration.

O is for (Treasury) Officer

In larger organisations you will find one or more treasury officers which are involved in daily operations in Treasury and also in Treasury policy. As Treasury has its own habits and language it’s important to know what you do in the field of Treasury and are aware of the risks. We have seen a lot of organisations gone (almost) bankrupt because they thought they knew what they were doing but it turned out to be, in some cases, exact the other way around. Therefore it is advised to have one or more educated Treasury officers in your organisation.

P is for Pension Fund

For some people the question of the solvency of your pension funds (if you have any) is more relevant than for others. Mostly your own age is an important  “trigger” or awareness around Pension Funds. There are several kinds of Pension Funds e.g. for government employees, employees from a certain branch or a pension fund from a certain private company. Anyway, in all cases, you, as a contributor to the pension fund, want to have certainty to receive a pension when you are entitled to it and that the amount you will get is the same you expected. Nowadays, since the financial crises from 2008, the uncertainty of obtaining your proper pension is bigger because the yields which pension funds achieve are lower than they should be to adhere to long-term achievements.

Q is for Quote

A quote is an offer from a counterparty which they give you when calling them. For instance, if you call the bank and want to buy USD and you ask “Can I get a quote for 1000 USD?” and the answer is “You can buy USD 1000 for € 98.” and you accept it, the deal is done. So take care saying “yes” or “I accept” because you have to buy the USD 1000 for the amount of euros but also the bank has to deliver for that price. A quote is therefore not as “free” as it sounds.

 

Talking to our readers and contributors we have noticed that there are treasury related words with many different understandings. We’ve asked Jan Doosje to kick off a treasury ABC. Of course this is not binding and there are letters which can be connected to several treasury related words We need your input to make a complete treasury ABC. Would you like to contribute to the treasury ABC? Please contact our community manager Stephanie Derkse via [email protected].

Jan Doosje

 

Jan Doosje

Owner of Fimterim Advies & Consultancy