How to explain what treasury is to family and friends?

| 09-08-2019 | by Pieter de Kiewit |

Your mortgage, credit card, holiday money and current account have business equivalents. They are managed by corporate treasurers. The title question, or variations, is one I have to answer quite often. Even more around the holidays, when I always meet my relatives. I am tweaking the answer constantly. Connecting private and business is my current strategy. Perhaps you (expert in the field or layman) can let me know if this explanation works for you.

You have a current, savings and perhaps other account. You pay the rent, groceries and a beer. You use a debit or credit card, cash, a cheque, paypal or other channel. You take care only you and the people you trust have access to your money. Corporate treasurers build and maintain a banking infrastructure that allows payments. They think about who is allowed to make payments (often they are), who can authorize (not a payment person), what bank to use and potential other payment channels.

You have a mortgage or personal loan so you could buy a house or pay for groceries when at the end of your paycheque the month did not come to an end yet. Corporate treasurers find funds necessary for their company and have a wider set of products available like bank credit facilities, bonds or new equity.

You feel fluctuations in interest and currencies when you cross the border to another currency country. Your mortgage, current account and credit card come with an interest. Both currencies and interest change over time: financial markets are not stable. Many of us just accept these changes. Corporate treasurers think and manage these risks: they think about the currencies in commercial contracts, about the length & price of various funding products and about mitigating the risks, for instance using derivatives.

Of course the above description is an oversimplification of the position. Treasurers have many other tasks and the complexity in a corporate environment is higher than a standard household situation. Furthermore I want to stress is that treasurers are not bookkeepers or controllers: they do not send or receive invoices and do not write the annual report. They manage actual money flows.

 

 

 

Pieter de Kiewit

Owner Treasurer Search

 

Corporate Treasury have a problem and this is why…

| 23-07-2019 | by Pieter de Kiewit |

Cost savings created by good treasurers easily exceed the sum of salaries of their team. They can help open doors that otherwise stay closed for their business colleagues and they can help avoid risks. Then why do they have this modest seat at the table of CFOs and are they often not considered for succession of her/him? Why are SMEs complaining about the lack of funding opportunities, when treasurers have them available? Why are Basel regulations made by bankers and politicians, where are the corporate treasurers? Why does treasury education not have a more prominent place in education? Why do bankers earn the bigger bucks? Corporate treasury has a PROBLEM!

The non-treasurers (CFOs and business owners) often do not know, so they do not consider this a problem. I think they should, given my introduction. The treasurers I meet often experience the problem: they want to be educated, make career progression, be involved in business and have better salaries. Why do controllers or non-financials not encounter this issue, or at least in a lesser degree?

Based upon my many interview notes and the first results of the dataset of the Treasurer Test I have a first hypothesis (there will be more): the personality of people working in treasury. A Big5 personality assessment has been done in a treasury population of 100. What I see is that treasurers, on average, are easily as driven as the general population. That should be a proper foundation. Where they score substantially different is in two aspects:

  1. They do not make contact quickly
  2. They are not focused on convincing other people.

The two obvious solutions are bringing people with a different personality into the treasury field and stimulating the current population to speak up. As recruiters we hope to contribute by bringing (for example) bankers into corporate treasury. Bankers often show a different personality profile. Furthermore I think we should not try to change the personality of the current population, but skills training will most definitely help.

Do you see the problem and want to step up? I hope so.

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Does your payment land in the correct currency account?

| 16-07-2019 | by Pieter de Kiewit |

Recently I received signals from a treasurer working in a mid-sized company about payments in various currencies landing on the wrong account. In a payment of USD 1 million, this could lead to extra cost of about USD 9,000! This results in extra cost and should be avoided…

In most SMEs in Europe a payment from US clients will be transferred in US dollars and lands in EURO’s. Banks facilitate this process and their fees consist of two parts:

  1. a transaction fee that is often a fixed fee or maximized percentage of the amount transferred
  2. a price to make Euro’s out of US dollars, following a conversion rate (the price you pay for buying dollars is different from the sell price, the difference is called “the spread”).

If you receive payments in US dollars regularly, you can consider opening a US dollar bank account. Therefore, you will avoid constant payment of the conversion rate. This is most relevant when you also make payments from this account. All big banks offer bank accounts in various currencies as a paid service.

Let’s take a deeper dive into the signals that I received: A foreign client made a payment in dollars with his dollar account. He transferred the dollars to the Euro account of my contact. This was all documented. Nevertheless, the bank charged transaction and conversion fees. Luckily this was discovered by my contact. After informing the bank about this issue, the bank repaired it all.

There could be various reasons why this happened. We all know that the global IT landscape in traditional banks consists of many different systems of a different age. A network problem could be a possible issue. The likelihood of this happening again is high, so be aware! Also, although we do not like this, it could be that this payment was handled manually. A mistake is easily made, hopefully not too frequent. It would be the worst case scenario when banks manipulate payments in order to claim fees. Let’s assume this is not the case.

The point I want to make: check if payments land on the proper currency account or it will cost you!

Any of you encountered misrouted payments?

PS From my own experience: in your ebanking environment, the default currency is not necessarily the currency the account is in. My GBP account had EURO as default currency…

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Be careful what you wish for in crowdfunding

| 02-07-2019 | by Pieter de Kiewit |

Over the last decade bankers have taken over from civil servants and public transport employees as the ones to complain about. Yours truly is also guilty and I still meet bankers who do not like to talk about their profession because they are annoyed about the bashing. Nobody is perfect but haven’t we all been too harsh on bankers?

This question popped up last week when I read about crowdfunding developments. This relatively new form of funding is growing quickly. I see at least three obvious reasons for this. First, regular banks are reluctant to fund SMEs. Regulatory requirements, ROI and risk profiles of their potential clients are some reasons for that. Second, there is a lot of liquidity in the market and it is hard to make proper investments. Third and last, various platforms, with easy accessible IT solutions, facilitate investors finding those who need funds. Why my plea to go easier on the bankers?

With crowdfunding platforms building a track record, issues are becoming very visible. There are two very prominent problems. Many SMEs using crowdfunding facilitate the payment of extremely high interests, the term loan sharks already came up. The other prominent problem is that the credit risk process in crowdfunding is often very weak. This results in the funding of unstable businesses and weak plans, ending up with funders empty-handed.

I am a small business owner, the chamber of commerce sells my address to whoever pays. On a very regular basis I receive mail informing me how much I can borrow. Crowdfunding is not regulated like banks are. Process and expectation management is being done quite aggressively by platforms and I understand problems are becoming obvious as the market matures. I invite you to read input from Lex van Teeffelen and others:

RTL Z/ANP: Failliet door crowdfunding: ‘Hoge rentes nekken ondernemers’
Lex van Teefelen: Dalend rendement crowdfunding 2019 / Flitskrediet: meer vloek dan zegen! 

This brings me back to where I started with: were we right in bashing bankers? Their processes are more sound, their communication is done with more restraint. There were extremes, mistakes were made and greed was obvious. I think most bankers tried and try to do an honest and professional job. Let’s keep each other informed, educated and ask before we judge. Hopefully we will get better in doing a proper funding job.

 

 

 

Pieter de Kiewit
Owner Treasurer Search

 

New generation treasurer studies at the Vrije Universiteit

| 13-06-2019 | by Pieter de Kiewit |

 

Research in our candidate files, filled with treasury experts and managers, shows that only a small fraction of the population completed a job specific education. Over time I see the level of impact and complexity of corporate treasury rising and an increase in treasury students. As a member of the so-called Curatorium (management board) of the post graduate program “Treasury Management & Corporate Finance”, I consider it my task to let you know about this education. A task I am of course happy to pick up.

 

 

You can get a first overview on the partner page of the Vrije Universiteit on our site and their own Treasury Management and Corporate Finance program page. In the next months we will post blogs with profiles of Register Treasurer (RT) graduates with their motives, experiences and career paths. This will give you better insight in the type of treasurers that are “RT material”. Furthermore we will invite graduates to share thesis and other research summaries that will give you a sample of the level of what you can expect.

Originally the program was in Dutch and aimed at a relatively narrow candidates working in a corporate environment. An important change is that the program now is in English. The student population is a mixture of consultants, bankers, interim managers and experts working in corporate and non-profit environments. As the value of the student peer group has huge impact on the program, this diversity brings a lot extra.

Our continued information flow will hopefully help aspiring students and their managers making a sound decision. The program is not for everybody, we hope to see you soon and find out if you have what it takes.

PS The next information session is at June 26, 2019.


Read stories from graduates who participated the Register Treasurer (RT) program. How does their treasury career look like now?

 

 

 

Pieter de Kiewit
Owner Treasurer Search

 

What does the hiring manager know about treasury?

| 23-05-2019 | by Pieter de Kiewit |

Among corporate treasurers IPOs are always the icing on the cake and I have followed Adyen going public. Very interesting is that besides the obvious reasons like increased investments, money for the founders and employees dealing with their stock options, the strategic partners and clients play a role. Clients like eBay and Uber apparently work better together with a listed Adyen. Food for thought….

What does the hiring manager know about treasury?

At least half of our recruitment assignments starts with a message from our client like this: “we have this treasurer, I do not understand what he does but he is leaving. Can you help?”. Of course music to our ears, happy to help. In recruitment for permanent positions HR is involved, very often they also contribute in interim assignments. HR not knowing in detail about treasury is understandable. Especially when the candidate we search does not report into a senior treasurer but, for instance, a CFO, we also encounter a lack of knowledge in treasury with the hiring manager. Is this a problem and if so, how can this be solved?

You might have seen we contribute in the build-up of the Treasurer Test. One of the groups of people we asked to do the test are “financials, not being treasurers”. Their measurered lack of knowledge and interest in the field is obvious. This is of course not a surprise. Treasurers are, amongst others, responsible for funding, payments, management of currency and interest risk. Important enough for the continuation of the existence of an organisation. How can we prevent this important job lands with the wrong person? Some ideas:

  • A track record as shown in a cv is of course a first obvious. A candidate might be too positive about accomplishments, this can be screened by checking references. Screening CVs without knowledge about treasury might be daunting. Simply key word comparison will not work;
  • Worldwide there are only a few universities that pay attention to corporate treasury. Measuring knowledge through academic qualifications is smart (Register Treasurer, CTP, ACT are the most obvious). Currently less then 20% of the corporate treasury population holds such a degree;
  • The aforementioned Treasurer Test will be launched shortly presents skill level and personality and compares with peers;
  • Including knowledgeable experts in the recruitment process will help. We of course are available. Alternatively involving a specialized treasury consultant in the screening process might also work.

I hope you will be able to find the right next treasury team member, secure business continuity and feel confident with your recruitment decision with the above list. We are available to brainstorm and support.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Four education programs for ambitious treasurers

| 18-3-2019 | by  Pieter de Kiewit |

One of our regular meeting topics is how to improve the skills of the corporate treasury population. Research for the Treasurer Test (https://www.treasuryxl.com/news-articles/treasurer-test-report-is-ready/) shows that only 20% of all treasurers completed a dedicated treasury education. I am happy I was invited to join the “Curatorium” of the Register Treasurer program of the Vrije Universiteit so I can further contribute (https://www.linkedin.com/in/pieterdekiewit/). For all people screening the (international and Dutch) treasury education market, I would like to share my thoughts about what I think are the most relevant programs, in order of investment and value:

  1. Recently the Hogeschool Utrecht started with a post bachelor program treasury management. In my opinion, with this program, they target an audience that just started working in treasury as well as a group of financials that only occasionally deals with the profession like (group) controllers, entrepreneurs, CFOs, auditors and others. It’s a great introduction program, the investment in time and money is overseeable. What I like is the fact they teach class in groups, so you can also learn from your peers. Teachers combine academic and practical experience https://www.treasuryxl.com/news-articles/hogeschool-utrecht-start-post-hbo-cursus-treasury-management/
  2. The Certified Treasury Professional (CTP) program from the US is starting to get traction in Europe too. The reviews I get from treasurers who completed the program are a bit mixed, I believe  it offers good value for money and the title behind your name is appreciated by the labour market. I did not yet hear if the difference between corporate treasury in the US and Europe has an impact on the program. Studying and the final tests are done online so you do need discipline  to complete this program.
  3. The treasury training programs of the ACT are best known in (and outside) Europe and appreciated by hiring managers. There are various modules, all together the program is more comprehensive than the one of the CTP. You also have to study and do tests online and the titles behind your name are a plus.
  4. The most comprehensive and thorough program I know is the one taught at the Vrije Universiteit in Amsterdam: https://www.treasuryxl.com/community/companies/vrije-universiteit-amsterdam/. The post academic degree Treasury Management and Corporate Finance already exists over 20 years. In time and money, this program requires serious investment and brings the RT title behind your name. In my opinion there are two prominent differences, when compared to the previous programs. First, classes are taught at the university to stable groups. This creates a thorough exchange of thoughts and groups of alumni that know how to find each other for many years. Second, not only there is more knowledge transferred, also students are expected to digest and build upon this knowledge in an academic way.

I hope you can benefit from this overview and I do appreciate reactions. I want to wrap up with a consideration that perhaps deserves an extra blog. The above mentioned institutes have a variety of goals that partly overlap. I wonder if the profit and sales focus of some of them are in conflict with a focus on high quality education. What do you think?

Pieter de Kiewit

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Management of Large Treasury Teams

| 11-2-2019 | by  Pieter de Kiewit |

Last month I was contacted by one of our clients -we found many staff members for them- about the organisation of the treasury team. The team has over 10 employees and recently has undergone extensive changes. We both know there is not one way to set up a team and after a short brainstorm, we decided it might be a good idea to gather her peers for a round table meeting. What can we learn from each other?

Last Friday a small group of treasury people managers, each of their teams has 10 members or more, gathered for a two hour meeting. The expected topics were team structure, hierarchy, job titles and the profile of the ideal treasury team member. Our hypothesis was that there are certain standards most of us can apply to optimize our treasury teams.
After a brief introduction it became quickly clear there were more than enough topics, two hours was not enough. And the aforementioned standards might exist but this meeting did not result in making them very clear. This in line with a previous blog I wrote about the shape and size of treasury teams. The following observations dominated the meeting:

  • The size and structure of a treasury team depends on questions about the company like: is it a HQ treasury or treasury hub?, what is the geographical footprint of the company?, what is the primary process of the company?, what is the maturity of the company as a whole and the willingness to invest in support functions?
  • Technology has an increasing impact on corporate treasury. Cloud and other solutions enable outsourcing, although the following remarkable statement was made: “if you can outsource it,  you can automate it”. One of the participants told exciting initiatives using robotics;
  • Substantial time was spent on HR aspects like how to deal with Millenials, age versus IT literacy, hiring the ambitious and unstable candidate versus the stable non-ambitious one and how do you screen to hire the proper candidate (see also our blog about the Treasurer Test).

The variety of topics, the different points of view and approaches applied by treasury managers is inspiring. As was the energy and enthusiasm of all participants. Together with them I will decide how we will proceed. Let me know if you want to join this initiative!

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Wat is corporate treasury?

| 20-12-2018 | by  Pieter de Kiewit |

Uw hypotheek, creditcard, vakantiegeld en lopende rekening hebben equivalenten voor bedrijven, ze worden beheerd door corporate treasurers. De titelvraag, of variaties, is er een die ik nogal vaak moet beantwoorden, vaker nog rond de feestdagen wanneer ik mijn familie ontmoet. Er is nooit één pasklaar antwoord, in mijn huidige strategie verbind ik privé met een zakelijke view. Misschien kunt u (expert in het veld of de leek) me laten weten of deze verklaring voor u werkt.

U hebt op het moment een betaalrekening, spaarrekening en misschien nog een andere rekening. Je betaalt de huur, boodschappen en een biertje. U gebruikt een bankpas of creditcard, contant geld, een cheque, PayPal of betaalt misschien op een andere manier. U zorgt ervoor dat alleen u en de mensen die u vertrouwt toegang hebben tot uw geld.

Corporate treasurers bouwen en onderhouden een bankinfrastructuur die betalingen mogelijk maakt. Ze denken na over wie betalingen mag doen (vaak zijn zij dat), wie kan autoriseren (geen persoon die de betalingen uitvoert zijnde niet de cash manager), welke bank te gebruiken en potentiële andere betaalkanalen.

Je hebt een hypotheek of een persoonlijke lening zodat je een huis kunt kopen of kunt betalen voor boodschappen, terwijl aan het einde van je looncheque de maand nog niet ten einde is. Corporate treasurers vinden fundingsoplossingen/financieringsoplossingen voor hun bedrijf, zij hebben een breder pakket producten beschikbaar zoals kredietfaciliteiten, obligaties of nieuwe aandelen.

Je voelt fluctuaties in rente en valuta wanneer je de grens overgaat naar een ander valutaland, Uw hypotheek komt met rente, op uw betaalrekening en creditcard wordt met valuta marges gewerkt. Zowel valuta’s als rente zijn variabel, financiële markten zijn niet stabiel. Velen van ons accepteren deze veranderingen gewoon. Corporate treasurers denken na over deze risico’s en beheren ze: ze denken na over de valuta’s in commerciële contracten, over de duur en prijs van verschillende financieringsproducten en over het beheersen/beheren van de risico’s, bijvoorbeeld met behulp van derivaten.

Natuurlijk is de bovenstaande beschrijving een te eenvoudige beschrijving van de situatie. Treasurers hebben veel andere taken en de complexiteit is veel groter dan een standaard huishoudelijke situatie. Verder wil ik benadrukken dat treasurers geen boekhouders of controllers zijn: ze verzenden of ontvangen geen facturen en schrijven het jaarverslag niet. Ze beheren de feitelijke risico’s en geldstromen.

Ik hoop dat je dit jaar je familie beter kunt informeren over de baan. Geniet van de vakantie!

Pieter de Kiewit

 

 

Pieter de Kiewit

Owner of Treasurer Search

 

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