Live Discussion Session | More reliable cash forecasting in a fraction of the time

13-04-2022 | treasuryXL | CashAnalytics | LinkedIn |

 

TreasuryXL is partnering with CashAnalytics to discuss how much time, effort, and money you can save by adopting a data-driven approach to cash forecasting.

Date & time: April 28, 2021 at 3 pm CET/ 2 pm GMT | Duration 45 minutes

Join our expert panelists as they present battle-tested methods for increasing the reliability of your data, breaking free from tedious forecasting processes, and freeing up more of your time for analysis.

If your team spends more than a few hours each week creating forecasts, this is an event you won’t want to miss.

Click on the banner for registration.

Meet the speakers

Conor Deegan

CFO and Co-Founder
CashAnalytics

Pieter de Kiewit

Owner
Treasurer Search

Ron Wessels

Group Treasurer

Join Us to Learn How Cash Flow Automation…

  • Cuts your manual workload and reporting timelines by over 90%
  • Provides detailed insight into transaction-level data across all your entities
  • Frees you from Excel-based processes that are riddled with human errors

Your free eBook, What is Treasury?

13-04-2022 | treasuryXL | LinkedIn |

 

Receive your eBook What is Treasury? after subscribing to the free treasuryXL weekly newsletter.

The world of Treasury is a complex topic. Many people will think about pirates and big see ships that sank deep into the bottom of the ocean including their ‘treasure’. A mystery treasure map will lead the finder to a treasure worth a lot of money. In some way Treasury and Treasure have similarities, it is about money and other valuables.

Are you having a hard time how to explain what treasury is to family, friends and colleagues? Or are you interested to learn more about the World of Treasury?

 

Subscribe and Download

treasuryXL created a 41 pages eBook for the corporate treasurers and the world of finance addict.

This eBook is designed to answer layman questions about the function of Treasury. treasuryXL bundled the most important information for you and created an easy to read and understand articles about the main subjects within the World of Treasury:

This ebook will answer your questions about Treasury topics.

treasuryXL explains the purpose of each Treasury function; what specialists do, examples of activities, FAQs, and a summary.

This ebook is based on the most relevant best practices that Treasury experts provided over the last years. On the website of treasuryXL you can explore additional information on the latest in Corporate Treasury.

 

HAVE FUN READING!

 

 

Kendra Keydeniers

Director, Community & Partners at treasuryXL

 

 

 

 

TIS Global Payments Peak

12-04-2022 | treasuryXL | TIS | LinkedIn |

TIS invites you to this virtual event. Get to know the product roadmap for 2022, the TIS Enterprise Payment Optimization story and much more.


TIS invites you to join us for our annual event, Global Payments Peak, on April 28th at 2:30 PM CET.

 

Enjoy an afternoon full of information and networking on our event app as we reflect on our vision and product roadmap for 2022. Get the opportunity to hear from our customers how they use our solution to build defences against payment fraud.

  • Register today and find out about our vision and product roadmap for 2022.
  • Hear news from TIS, engage in sessions with existing TIS customers as well as industry experts.
  • Learn what Enterprise Payment Optimization is and how TIS can help your company to optimize its payment processes.

We will reveal an agenda in due course. Stay tuned for more information

Ready to get started? Register now.

EuroFinance International Treasury Management returns to Vienna | 21-23 September 2022

08-04-2022 | Eurofinance | treasuryXL |

 

Featuring keynote speakers, Guy Verhofstadt and Göran Carstedt…

The 31st annual EuroFinance International Treasury Management 2022 will return this September with more than 2,000 attendees, 150 speakers, 100 sponsors and exhibitors.

 

 

For the first in-person event in three years, EuroFinance International Treasury Management keynote speakers will include Guy Verhofstadt, member of the European Parliament and Göran Carstedt, former corporate executive of Volvo and IKEA.

The full line-up brings more than 150 global corporate treasury leaders, financial institutions, technology providers and thought-leaders together to discuss the theme “Treasury in transition”, across 12 stages at Vienna’s Messe Wien Exhibition Congress Center from September 21st-23rd 2022.

Guy Verhofstadt is a Member of the European Parliament and co-chair of the Conference on the Future of Europe. He served as prime minister of Belgium from 1999 until 2008 and also made a name for himself as Brexit coordinator and as a passionate champion of more European integration. He will give the opening keynote on day 1.

Dr Göran Carstedt is the former head of IKEA North America and IKEA Retail Europe and former head of VOLVO France and Volvo Sweden. Having run some of the world’s leading companies, Dr Carstedt is also the former senior director of President Clinton’s Climate Change Initiative. He will give the opening keynote presentation on day 2 on how climate change is changing business.

Corporate treasury leaders from some of the world’s top multinationals – including TechnipFMC, Citrix Systems, Kongsberg Automotive, Autoneum, Equinor, Heinz, Medtronic, John Lewis – have also been confirmed.

 

“We look forward to seeing people connecting and collaborating face-to-face once again in Vienna. It’s great to see live events bouncing back across the world and from the response we have had so far,  it’s clear that our community of speakers, banks and technology providers are eager to meet in-person after 2 years of virtual meetings.” says Asif Chaudhury, Managing Director of EuroFinance.

 

Irreversibly changed after the events of the past few years, this year’s theme will explore the “new” treasury; a highly digital and automated function tasked with meeting strategic goals and changing remits against a backdrop of multiple issues from climate change to high inflation. Treasurers will share their experience in practical case studies and technical discovery labs and celebrate the innovations that will drive change.

EuroFinance’s growing list of sponsors and exhibitors for the event includes  J.P. Morgan Chase, Standard Chartered, Citi, Bank of America, BNP Paribas,, Fitch Group, HSBC, Santander Corporate & Investment Banking, Visa, Société Générale, ION, TIS, Remote Technology, B2C2, American Express, Bayerische Landesbank, UniCredit, PrimeRevenue, Northern Trust Asset Management, Credit Agricole, Zanders, ICD, Pictet Asset Management, Raiffeisen Bank, BlackRock, Legal and General, Tietoevry, Amundi, CMSpi, Nomentia, Aviva Investors Global Services, CashAnalytics, Treasury Systems, CoCoNet, Exalog, Traxpay, SisID, Finastra.

For more information and to register, visit: https://www.eurofinance.com/international

About EuroFinance

EuroFinance, part of The Economist Group, is a leading global provider of treasury, cash management and risk events, research and training. With over 30 years of experience, our mission is to bring together the brightest minds and most influential voices in treasury. Through in-depth research with 1,000 corporate treasury professionals every year, we have a unique insight into the trends and developments within the profession and an unrivalled global viewpoint.

Contacts

Marianne Ford
Senior Marketing Manager
EuroFinance

Economist Impact
[email protected]

 

 

Insurance within Treasury

07-04-2022 | treasuryXL | ComplexCountries | LinkedIn |

After many years of weak markets and low insurance premiums, many companies have probably been buying more cover than they may really need. A market where premiums are rising is causing companies to re-evaluate their approach. This re-evaluation involves many complex questions around risk appetite, collaboration with other functions (Legal, HR, Logistics, Manufacturing, IT), the use of brokers, tax, and others. This gives the treasurer the opportunity to really demonstrate his or her value to the business.

This report was compiled by Monie Lindsey. based on a Treasury Peer Call chaired by Damian Glendinning.

Source

Chair’s Overview

The strategic treasurer. The risk manager for the company. Where better for the treasurer to get out of the traditional disciplines of simply managing liquidity and bank accounts, than in managing insurance? Risk management meets budget and operational constraints, and it is a very financial discipline.

This call was initiated by a member who is struggling with increasing premiums as the market hardens, and wanted to know whether other treasurers who are responsible for insurance are taking the same measures, i.e., reducing the purchase of cover and increasing deductibles. The quick answer to that question is yes, in response to significant premium increases, many members are taking another look at the levels of cover. The other question was whether there are additional, more creative ideas.

This triggered a wide-ranging discussion:

  • Should insurance be in treasury? The consensus – not surprisingly – was yes, but responsibility often lies with, or is shared with, legal and HR.
  • How useful are captives? One member finds them useful to accelerate the tax deduction for losses. Others find them useful for centralising risk and losses away from the operating units – this can depend on the company’s management system. Others are wary of the cost and complexity of a captive.
  • Should you use brokers? If so, how effective are RFPs between brokers? One member made savings by changing brokers following an RFP. One member does some negotiating directly with the insurers – but this can be heavy lifting.
  • What is the correct balance between self-insurance and buying risk? There does not seem to be a scientific answer.
  • The classical approach to solving this question is to benchmark versus what other companies are buying – but this does not confirm that this is the correct level for your company.
  • Part of the equation is determining the level of risk and earnings volatility a company is prepared to accept.
  • A company will have different levels of risk retention for different lines of risk
  • Some risks can become very difficult to insure: one participant is having big issues with theft of cargo in the port of Los Angeles, with the activity of organised crime. This is a frequent issue in Latin America.
  • Several participants felt one of the benefits of buying insurance was access to expert advice on risk management, leading to better protected facilities, e.g., better fire prevention, and enhanced anti-theft measures.
  • The use of captives to self-insure HR benefits was raised. This is possible, and can be done easily for some benefits. However, it is an area which is heavily regulated, with many mandatory state run schemes, especially in Europe.
  • On the other hand, travel insurance can often be combined with useful services, such as emergency assistance.
  • There was a discussion about cyber insurance: one participant had experienced a hack, and found that the insurance company provided outstanding assistance in managing the situation before it got out of control. Others were less sure the risk was significant enough to justify the expense.
  • Changes to the business often bring changes to the insurance cover required.

Bottom line: After many years of weak markets and low insurance premiums, many companies have probably been buying more cover than they may really need. A market where premiums are rising is causing companies to re-evaluate their approach.

This re-evaluation involves many complex questions around risk appetite, collaboration with other functions (Legal, HR, Logistics, Manufacturing, IT), the use of brokers, tax, and others. This gives the treasurer the opportunity to really demonstrate his or her value to the business.

Please get in touch to sign up for free updates, request a sample report, or find out about our services. Enquire

Treasury RFP’s digitization

06-04-2022 | treasuryXL | Treasury Delta | LinkedIn | The optimal, objective, and transparent selection of treasury supplier solutions and/or banking services, observing procurement principles and guidelines, remains a complicated challenge for all treasurers. It is extremely time-consuming and cost-ineffective. This article highlights a niche fintech solution developed by Treasury Delta to successfully digitize the […]

Read more

The top challenges that will affect your FX risk strategy in 2022

04-04-2022 | treasuryXL | Kantox | LinkedIn |

“The year of predictable unpredictability”, as The Economist calls it. But what challenges lay in store for risk managers in 2022 when it comes to their FX risk strategy?

Credits: Kantox
Source

 

1. Shifting interest rate differentials across currencies

Let’s start with the first of our challenges that will affect your FX risk strategy in 2022, namely shifting interest rate differentials across currencies. This is the result of central banks reacting to inflation and inflation expectations. This will, in all likelihood, lead to increasing differences between FX rates with different value dates—also known as forward points. Central banks from a wide range of countries have adjusted their short-term interest rates in 2021, and more are set to act in 2022: Chile, Brazil, Czech Republic, UK, Hungary, Poland, NZ, South Africa, and South Korea among others.

Is your company well-prepared to manage those shifts? Is it well-prepared to take advantage of favourable forward points? In the event of ‘favourable’ forward points, for example, when a company sells and hedges in a currency that trades at a forward premium, pricing with the forward rate would allow that company to price more competitively—without endangering its profit margins.

As Toni Rami, Kantox’s Co-founder and Chief Growth Officer says, “most companies fail to take advantage of this opportunity, either because they lack the technology to do it, or because they are not aware of it, or because of both”.

Is it well prepared to protect itself from unfavourable forward points? This is shaping up to be a key concern in 2022. It would be the case, for example, of a company that sells (and hedges) in a currency or in currencies that trade at a forward discount, like a Europe- or a US-based firm that sells, for example, in Brazil.

This company could protect itself by setting boundaries around its FX pricing rate by means of automated and dynamically updated profit-taking and stop-loss orders in order to delay as much as possible the execution of the hedges. Failure to have this mechanism in place will mean:

(a) unnecessary financial losses due to the cost of carry (a key point in 2022 given recent developments in central bank policies)

(b) too much capital tied up in terms of collateral/margin requirements

(c) not enough time at your disposal in order to fine-tune and improve your forecasts (FX surveys consistently show that CFOs and treasurers would like to have more time at their disposal to fine-tune and improve their forecasts)

2. Ongoing pressure on profit margins

Turning to the second challenge, is the ongoing pressure on profit margins. There is a clear need for better, more dynamic pricing systems, as McKinsey surveys consistently show. Does your company have a proper system to price with FX rates? On the face of it, this looks like a simple proposition. It’s not. It requires a system to fetch the appropriate FX rate with criteria in terms of:

(a) sourcing the FX rate;

(b) communicating that FX rate to commercial teams

(c) updating that rate according to time-based or data-driven criteria.

And it also requires a system to create the FX-pricing rules that your business needs. Failure to have these systems in place will likely result in not being able to properly set the pricing markups —per client segment and per currency pair— that your commercial strategy requires and not being able to adequately use the forward rate for pricing purposes.

Take, again, the case of unfavourable forward points, namely a firm that sells and hedges in a currency that trades at a forward discount, or that buys and hedges in a currency that trades at a forward premium. With the proper pricing rules in place, the firm needs to price with the forward rate. That would allow it to avoid unnecessary financial losses on the carry. In 2022, with several EM central banks preparing to further raise short-term interest rates, this is likely to be a critically important element in any FXRM strategy.

3. The uncertain FX markets outlook

Finally, the uncertain FX markets outlook is a reminder of the importance of having a solid FX risk management strategy in place in 2022. According to Citi’s latest Treasury Diagnostics survey, 79% of risk managers have exposure to non-G10 currencies, in many cases unhedged because of costs, liquidity and regulations; 60% of treasurers expect a new client base in emerging markets to be the largest driver of FX-denominated sales growth. Yet 57% of CFOs say they suffered lower earnings in the past two years due to significant unhedged FX risk (worldwide), rising to 77% in EMEA. America: 61%, Asia: 43% (HSBC survey).

This requires automated hedging programs and/or combinations of automated hedging programs. Failure to have these programs in place in 2022 is likely to mean: (a) a high variability in performance, whether it is measured in cash-flow terms or in terms of accounting results; (b) failure to adequately protect and enhance operating profit margins; (c) the possibility that your customer’s FX could turn into your own credit risk if excessive currency volatility forces them to wait for a better exchange rate to settle their bills.

Worried about your FX risk health? Take our free assessment and get a personalised insights report in minutes. 

The 6 main benefits of adopting an in-house bank

30-03-2022 | treasuryXL | Nomentia | LinkedIn |

An in-house bank is a group or a legal entity that provides banking services to different business units within the organization. The in-house bank replicates the services that are typically provided by banks. The in-house bank offers solutions for payments, liquidity management and cash visibility, payments on behalf (POBO), collections on behalf (COBO), FX requests, funding, and working capital to business units.

Source

When organizations are looking for a way to improve cash flow processes, cash visibility, and reduce bank fees, the in-house bank can be a great alternative compared to working with countless banks internationally.

While the in-house bank is not an option in every country due to regulations, when it’s possible to use it, it will decrease the company’s vulnerability to regulatory changes as these could negatively impact business operations. Organizations are not only protecting themselves against regulatory changes of countries, but also against changes on the bank’s side for example when it comes to updating new payment file format standards.

What are the top 6 benefits of an in-house bank?

 

Among the many benefits of implementing an in-house bank, centralized control, improved liquidity management, reduced banking fees, automated bookkeeping, globally harmonized payment processes and full visibility into subsidiary balances are perhaps the most important ones that organizations can realize.

 

1. Centralized control

 

Centralized control by the group is by far the biggest benefit of adopting an in-house bank to help with topics such as global payment processes, financing, investments, corporate-wide FX risk exposures, and hedging.

An in-house bank is especially favorable for companies with large amounts of cash or when there’s a constant need to move money between subsidiaries and the group. While the group gains a bigger control, business units and subsidiaries will have their own sub-accounts within the in-house banks. The balance limits are set and reviewed centrally based on the organization’s treasury policy by the group.

The group will be able to minimize global payments that include foreign exchange or cross-border payment fees as all the transactions can be conducted centrally instead of going through local payment processing third parties. With an in-house bank, there’s clearer visibility into the overall net positions per currency to manage and it’s possible to hedge FX risk at the group level for currency protection and fewer hedging transactions.

Also, subsidiaries do not necessarily need to go to banks for loans, but instead, the loan can be funded by the organization. Lending money to the subsidiaries can be significantly cheaper than paying high-interest rates to a third party like a bank or a creditor. Centralizing the internal financing to the in-house bank provides an easy way to document the processes for compliance as well as the process becomes more simple as all the applications will go through the group.

With a centralized in-house bank, treasury will have greater control over all the treasury processes, and this could significantly improve the liquidity position of the company.

 

2. Improved liquidity management 

 

Through the in-house bank, liquidity can be centrally managed and the group can decide whether external funding is required based on the cash position. With centralized reporting, the group does not only have better real-time visibility into the available cash, but decision-making becomes faster as the result of the available information. This is also beneficial for subsidiaries and business units as they will be able to receive funds a lot faster as a result of the automated cash pooling. This also ensures that there is adequate liquidity when and where it is needed instead of having excess amounts of cash on the accounts of subsidiaries that do not necessarily need the money at that point.

Of course, from time to time, organizations still need external funding for investments, but then it’s also easier to qualify for funding with better terms as a group than as a stand-alone subsidiary.

 

3. Reduced banking costs & fewer banking partners

 

Getting started with an in-house bank will mean that the external banking cost will be reduced to the minimum so it’s a lot more cost-effective than using external banks globally. It’s also possible to save on bank transaction fees since the internal transactions do not need to go through external banking partners.

Centralizing the banking relationship management to group treasury can also increase negotiating power, so the enterprise can get better prices and improved services.

 

4. Automated reconciliation and improved month-end process activities

 

In-house bank users can auto-reconcile incoming payments and collections for higher efficiency. In a similar manner, inter-company cash flows can be also executed and posted. Balance reconciliation and reporting can be automated by fetching all account statements from the banks and allocating the transactions to the subsidiary’s in-house bank accounts. The rules of allocation can be set on a bank, company, or even an account level.

 

5.    Harmonized payment processes for all internal, external, and on-behalf-of payments

 

Using an in-house bank can remove the need for a separate netting solution. Instead, with an in-house bank, you can create the exact same process both for internal and external payments. When the internal payments remain internal and they do not require receivable-driven netting, you gain benefits such as always up-to-date bank account statements and fully automated reconciliation of internal transactions.

Subsidiaries also benefit from the harmonized payment processes. They won’t lose value dates and the month-end closing can be automated.

Payments-on-behalf-of (POBO) minimize the reliance on external bank accounts by subsidiaries. With POBO, subsidiaries continue to process payments in the same way as before while using the debtor’s in-house bank account number.

With Collections-on-behalf-of (COBO), it’s possible to define allocation rules based on transaction details to allocate cash to in-house bank accounts. With virtual bank accounts offered by external banks, it is easy to set up an automated COBO process.

 

6. Full visibility on subsidiary balances

 

Without a centralized control that an in-house bank offers, the group treasury has often had the challenge of the lack of visibility into the cash balances of the subsidiaries. With an in-house bank, it’s possible to manage multiple cash pools to gain full visibility on subsidiary balances.

It is more beneficial to pool all cash and credit balances instead of having cash lying idle on the accounts of the subsidiaries. Business units may run net credit or debit balances in the subaccounts and either earn or pay interest on the net debit/credit balances.

When the group needs to borrow money to the business units, they can set their own interest rates that can even vary based on the subsidiary’s size and profile.

 

Should you implement an in-house bank?

 

There’s no simple answer to this question. It should be a strategic decision and should be aligned with your organization’s roadmap.

To identify whether the in-house bank is the right solution for you, carefully evaluate your current processes: what is working and what could be improved? Could some of the above-mentioned benefits make your operations more profitable by controlling the organization’s cash centrally?

Of course, you may already have a good solution for example for liquidity or bank fee management, but if you have business units and subsidiaries globally and you are going to invest heavily in development, you deal with local taxation, transfer pricing, you may want to consider the option of implementing an in-house bank in the near future.

Before you make a decision, you should also be aware of the regulations of all the countries you are operating in, whether POBO & COBO are allowed in those countries, and what paperwork you need to move forward with an in-house bank.

Implementing an in-house bank is a significant undertaking as it will require buy-in from many departments, however, in the long-term, you will be able to build better processes, improve visibility, and save money.

 

 

SAP Integration with the SAP Add-on

24-03-2022 | treasuryXL | TIS | LinkedIn |

Outsource the technical challenge of bank connectivity to a payments expert.

Benefits of integrating TIS with our certified SAP Add-on

For many SAP clients, bank connectivity is a technical challenge. Find out, how integrating SAP with TIS can help you:

  • Replace fragmented data streams with a unified interface for all payments
  • Significantly improve your bank communication
  • Ease the technical integration of an in-house bank with TIS and SAP Advanced Payment Management (APM)

 

The SAP Add-on is available for all systems (SAP ByDesign, ECC6.0, S/4HANA on-premise, public cloud and private cloud).

Download the free Fact Sheet

 

When Is the Right Time to Move to APIs?

23-03-2022 | treasuryXL | Kyriba | LinkedIn |

By Andrew Deichler, Content Manager, Strategic Marketing

Application programming interfaces (APIs) have the potential to revolutionize the treasury and finance function. But when is the time to move to APIs, and when is file transfer protocol (FTP) still sufficient?

Let’s explore the use cases for APIs and when it is appropriate to begin using them. We’ll also look at areas where FTP is still sufficient.

Source

API Use Cases

Largely viewed as conduits for faster bank connections, APIs allow systems to exchange data faster. Unlike FTP, APIs do not require any kind of file download to transmit information; users have instant access to the data they need.

Major ERP providers are working with API developers to embed APIs into their workflows so users don’t need to take any action outside the ERP. For example, Kyriba is working with SAP, Oracle, Microsoft Dynamics and others on API connectors. And Kyriba users can also integrate APIs into their ERPs on their own with our plug-and-play solutions.

APIs have nearly limitless potential. They can facilitate an open ecosystem that enables third-party developers to build applications on top of the API provider’s platform. Through such a platform, corporate treasury and finance departments can expedite the flow of data. Kyriba’s Open API hub, launched in 2021, is an online marketplace of real-time connections to apps, data, and new products and services that inject data-driven decision-making into every financial operation.

APIs offer treasury and finance many capabilities that they haven’t had before, such as the power to “un-batch” payments. Rather than relying on batch processes that transmit at several pre-determined times each day, APIs allow payments to be initiated from treasury management systems and ERP systems as needed—even in real time. In fact, real-time payments require the use of an API because payments can’t be transmitted instantly if a file needs to be downloaded.

Furthermore, APIs can also un-batch reporting, allowing organizations to manage cash continuously and in real-time. Just like batch payments, batch reporting is constrained to set times each day. APIs allow treasury and finance teams to receive intraday liquidity updates as needed, improving the ability to position, reconcile and invest cash. And immediate visibility into cash also allows companies to vastly improve forecasting.

FTP Isn’t Going Anywhere Just Yet

All that said, FTP isn’t dying out just yet. Banks and technology solutions providers that are managing open platforms are not replacing legacy formats with APIs; rather, they are offering them as a complement to these formats.

Furthermore, the rollout has been slow; most banks are not using APIs in live production yet. And the ones that do mostly offer them for certain real-time services—meaning that multiple connectivity options are needed to fully support a treasury and finance team.

But even if you have full API capabilities, they may not be appropriate for every type of data transfer yet. Generally speaking, FTP is better for large bulk transfers of data, while APIs are preferable for smaller, more specific transfer needs. And even though APIs can virtually eliminate the need for batching, some organizations may not see a need to end the practice—and they’ll need FTP to do that.

Lastly, FTP has been around for many years, making it compatible with legacy systems. Unlike API connections, which require that systems on both ends support the technology, FTP only requires that the appropriate file format be used. So, FTP won’t require any major conversions for your software. In other words, if the status quo is working for your organization, you may not see the need to make any changes right now.

API and SFTP Capabilities

In many ways, APIs bring key advantages over a file-based approach, such as an immediate response from banks and the ability to receive new data and notifications in real-time. But for the time being, flat-file technology is still very much in use.

Fortunately, Kyriba users don’t have to choose one or the other. Kyriba connects to 600 global banks on behalf of our nearly 2,500 clients using a variety of connection protocols, including APIs and FTP. So regardless of whether your bank and ERP are set up for APIs or not, Kyriba can ensure that you’ll have the right connectivity for your organization.

For more information on APIs, view our API Whitepaper, Fact Sheet and Infographic.