What is a Cash Conversion Cycle?

24-08-2022 | treasuryXL | CashAnalytics | LinkedIn |

Did you know that on treasuryXL you can find information on all relevant treasury topics? One of the concepts you can find information on is the Cash Conversion Cycle.  A business’s cash conversion cycle (CCC) is a measurement of how much time it takes to turn a cash investment in the business into a cash return in the form of sales. CashAnalytics can tell you all about how to calculate your CCC, what makes a good/bad CCC and how to shorten your CCC.

Original source



Find out:

  • How to Calculate Your Cash Conversion Cycle

  • What Is a Good Cash Conversion Cycle?

  • How to Shorten Your Cash Conversion Cycle (Sustainably)

  • Sustainable CCC Improvements Require Reliable Real-Time Data


Read what Cash Conversion Cycle is all about


 

When Should You Start a Hedge Program?

23-08-2022 | treasuryXL | GTreasury | LinkedIn |

A popular Chinese proverb says “the best time to plant a tree was 20 years ago. The second-best time is now.” This is equally true in the world of hedging.

Source: Hedge Trackers, a GTreasury Company

We’ve seen volatility in currency markets, with the EUR falling 9 percent between Labor Day and Thanksgiving. We’ve seen volatility in commodities, with some commodity prices doubling and tripling and oil prices approaching 10-year highs. And short-term interest rates may quadruple in a year.

Companies that have well-run hedge programs have time to prepare and adjust to these forces. But what if you’ve been waiting for “the best time” or “the right time” to hedge?

Two years ago, we were surprised with a global pandemic – when everything settles down, will it be a good time to start a hedge program? Before we even have a chance to assimilate that, we are now faced with war in Europe. Sanctions, which will almost certainly be followed by more sanctions and more volatility, and which will be followed by what? Are you feeling like you’ve missed the opportunity to start hedging?

It’s never too late to set up a hedge program.

Now, just like last week, last year, and five years ago, the steps are the same.

  • Determine what your objective is. As our own Helen Kane says, “I believe that most hedge programs should take a deep breath, step back and determine what is really the objective…. Are they trying to protect margins? Are they trying to lock in budgeted earnings? Are they smoothing the year-over-year impact of currency into their financials?”
  • Once you know your objective, identify and quantify your exposuresInvestigate the start of the exposure (often not easy to identify) and its end. The answers will be different depending on your hedge objective, and that’s why it’s critical to get that objective determined first. It is expected that you would have different objectives for different exposures.
  • You’re ready to start working on your policy, detailing what exposures will be managed with what strategies/derivatives over what time frame. You may want to consider some flexibility in the policy to systematically take advantage (or not), with clear guidelines generational rate movements – allowing more or less (but not zero) hedging in those times when rates hit 5- or 10-year highs or lows. This provides a framework to contemplate those things that we thought were so rare that we wouldn’t see them in our lifetime. Remember those days?
  • There are other documents that will be necessary. If not addressed directly in your policy, you’ll want a guideline for accounting and an appropriate control structure. You’ll also need to make sure that inception documentation supporting any special hedge accounting is compliant.
  • You’ll need to set up a process for collecting exposures at different stages (anticipated, recognized, impacting earnings, settled).
  • Make sure that you have a good working relationship and legal framework (ISDA) with your counterparties and that you set up a good process for trading and competitive bidding.
  • Of course, trade management and special hedge accounting should not be left to spreadsheets. We’d be happy to introduce you to CapellaFX, which not only is a trade repository but also accumulates your exposure data (existing and anticipated), applies hedge decisions, designates and documents exposures, drives your hedge accounting and provides effectiveness tests. Most importantly, it is user-friendly for both Treasury and Accounting and doesn’t require a derivative specialist to use or implement.

Conclusion

Does all of this seem daunting? It doesn’t have to be. Hedge Trackers can help you with every step. We have the people and the systems to assist your team, or you can offload some or all of the process to us.

Returning to our original question on the best time to plant the tree – or start a hedging program. If you haven’t already done so, recall that the next best time to start is right now.


Harmonisation of FRTB data compliance requirements by local jurisdictions is crucial

09-08-2022 | treasuryXL | Refinitiv | LinkedIn |

 

Banks face uncertainty over changing responsibilities under the Fundamental Review of the Trading Book (FRTB), but potential jurisdictional divergence on new requirements for data vendors could add greater complexity to the roll-out of these new rules.

Read more

Cash & Treasury Management: Join The World’s Leading Experts in Copenhagen

04-08-2022 | cashandtreasury.dk | treasuryXL | LinkedIn

 

Featuring Chairman of the event, Pieter de Kiewit – Owner of Treasurer Search

 

Be a part of the exclusive Cash & Treasury Management Conference on the 1st of September 2022, which will be held in the extraordinary luxury settings at Hotel d’Angleterre in Copenhagen.

Get updated, expand your network, and get inspiration for optimizing your work within the Cash & Treasury Management community.

 

 

The international program consists of selected and experienced speakers that have proven success within a certain area of Cash & Treasury as e.g., ESG, digitalization and Cash Management. The conference brings together a selected group of high-level senior treasurers from global organizations. Learn from your international peers and join the exclusive network. The event ensures you a full day of new knowledge and inspiration made for high level Treasurers. You get in-depth with the latest trends, valuable content from recognized speakers and extensive networking opportunities.

Among others, these topics have been selected for this year’s conference:

  • Sustainability financing – experiences one year down the road
  • Proprietary data driven cash flow forecasting model
  • How we integrated Nets Group Treasury in to Nexi Group treasury
  • Experiences from a massive hacking attack
  • A career within Novo Nordisk treasury
  • Macroeconomic trends and predictions

 

As part of TreasuryXL’s network we offer treasurers 25 % discount.

Sign up now and join us 1 September – Remember to use the code when signing up: TreasuryXL25

 

 

Read the program and learn more about participation and sponsorship opportunities: cashandtreasury.dk

 

 

 

 

Treasurers Get Strategic About Hedging Programs as Interest Rates Keep Rising

02-08-2022 | treasuryXL | GTreasury | LinkedIn |

The current interest rate landscape (read: rates going up for the foreseeable future) is spurring treasurers and the office of the CFO to implement rate hedging strategies at a faster clip. For many organizations, hedge programs are a new initiative—and it can take some understanding to know what they do and what to look for from companies that offer them.


Farah Lotia, the Director of Interest Rate and Quantitative Analytics at Hedge Trackers (a GTreasury company), discusses what interest rate hedge programs are, the ROI benefit they deliver treasures, how to get started with them, and why there has never been a more advantageous time to implement them.

The State of Treasury in 2022: Research Summary

28-07-2022 | treasuryXL | TIS | LinkedIn |

This blog gives you insights into the state of the treasury function in 2022 and a short list of recommended action items for better management of modern-day treasury operations

Source



About TIS’ Global Research

The insights highlighted in this article are based on a comprehensive set of studies conducted by TIS and our affiliates between Q1 2017 – Q2 2022. During this period, TIS held one-on-one interviews with hundreds of treasury experts and also released a suite of digital surveys that gathered feedback from thousands of financial practitioners regarding technology, staffing, and general operations.

Over the course of our research, TIS partnered closely with a niche team of industry experts, thought leaders, and consultants to interpret the findings. Historical treasury data was also obtained from the Association of Financial Professionals (AFP) and the consulting firm Strategic Treasurer to provide context regarding the evolution of treasury technologies and practices over time. Together, the expertise of our consortium and the extensive feedback collected from industry practitioners has provided us with unparalleled insights into the state of the treasury function in 2022.

While this article serves to highlight the summary findings and recommended action items from our studies, readers that would like more data and information are encouraged to download our full whitepaper for extended coverage.

 

 

Research We Relied Upon

The below surveys, polls, and interviews represent the full suite of research that TIS relied upon to complete our study. Links to the associated research conducted by our affiliates are provided as applicable.

  1. 2017 Strategic Treasurer Technology Use Survey. View Full Results Here
  2. 2020 AFP Strategic Role of Treasury Survey. View Full Results Here
  3. 2020 TIS Rapid Research: Remote Work Capabilities Poll
  4. 2022 TIS Rapid Research: Treasury & Payment Systems Usage Poll
  5. 2022 TIS & Treasury Priorities & Opportunities Survey. View Full Results Here
  6. 100+ One-on-One Interviews with Active Treasury Practitioners Between 2017-2022

 

Key Findings & Highlights

This section provides a brief overview of the key points obtained through our research. For more information on any point of interest, please refer to the full whitepaper.

1. Treasury’s Responsibility List is Constantly Growing: The treasury function has never been more critical to the success of an organization, and this is being recognized internally by key stakeholders. However, treasury practitioners are now being handed additional responsibilities as executives and other departments realize the value they can provide, and nearly 80% of U.S. treasury teams saw their “net” list of responsibilities increase in 2022 vs 2021.

 

 

2. Stakeholders View Treasury as Equally Strategic & Operational: Over 50% of financial practitioners believe the treasury function holds key strategic value, which represents a significant shift from the traditional viewpoint of treasury being mostly an operational function. This shifting perspective is shared widely amongst internal stakeholders like accounting and AP. Today, treasury’s strategic influence is impacting areas like technology adoption, working capital management, bank connectivity, payment processing, and financial reporting.

3. A Saturated Technology Market is Confusing for Treasury: The growing importance of the treasury function and widespread digitalization of global financial operations has resulted in an abundance of Fintech and bank-led software products entering the market. While this has helped foster innovation, data also shows that many treasurers have become confused by the breadth of categories and service offerings in the market, which has led to greater indecision and headache during RFPs and implementations.

 

 

4. The Line Between “Treasury Expert” and “Tech Expert” is Blurring: As the treasury function continues shifting away from paper-based and manual workflows to digitally automated processes and software tools, treasury personnel are finding that their technological proficiency has a significant impact on their ability to perform their core financial responsibilities. This is leading many practitioners to seek out technology-based learning courses in tandem with their more traditional financial education.

5. Fraud & Security Concerns Remain a Critical Issue: In today’s remote and digitally-operated business landscape, tech-savvy criminals are presented with even more opportunities for infiltrating a company’s systems and processes. This is leading to a noted increase in fraudulent attempts across a variety of areas, and treasury teams are continuing to invest heavily in both technology and training to protect themselves.

6. Successful Treasury Teams Collaborate with Other Stakeholders: Research found that many of the most successful treasury teams are proactively working cross-collaboratively with other internal stakeholders and departments like accounting, AP, and IT to accomplish their objectives. These teams are also frequently partnering with external consultants, solution vendors, and bank personnel to ensure alignment and cohesion across all their various systems and operational workflows.

 

Recommended Action Items for Treasury

Based on the findings from our research and interviews, TIS experts have compiled a short list of recommended action items that treasury teams should consider as they seek to better manage their operations in 2022 and beyond. They are as follows:

1. Embrace the Opportunity to Provide Greater Strategic Input: As CFOs and other departments increasingly rely on treasury for reliable data and insights, practitioners should embrace the opportunity to expand their strategic influence internally. In the long run, this ability to provide value in new ways across the organization will benefit treasury when it comes to securing new budget and staffing approvals. However, in order to provide the most visibility and control over their operations without overloading their small teams, treasury must become highly adept at leveraging technology to eliminate manual workflows and repetitive tasks.

2. Becoming Proficient with Technology Should be Non-Negotiable: As technology continues to play a massive role in treasury, it’s crucial for practitioners to familiarize themselves with the core tenets of the modern technology landscape. This does not mean simply researching new buzzwords, but instead seeking to understand the unique differentiators that separate various bank and fintech product offerings in the market. Treasury should also not hesitate to seek out the help of specialized consultants or technology experts for help. Ultimately, treasury’s ability to effectively identify the solutions and capabilities that best fit their company’s needs will save significant time, money, and headache during implementations and migrations.

3. Managing Security for Remote Workforces Requires Extra Care: Given the continued prominence of fraud attacks within the treasury and finance environment, there is no room for error when it comes to protecting a company’s systems, workflows, and personnel. To secure their funds and assets, treasurers must implement multifaceted security controls and protocols that extend beyond the “frontlines” and include executives, administrators, and other “back-office” staff. Combining education and awareness with multiple layers of technology is the only way to gain the upper hand against a new era of tech-savvy criminal.

4. Building Strong Relationships with Other Stakeholders is Crucial: Today, most of the financial systems and workflows that exist within a business are closely intertwined. This means that treasury operations have a significant impact on other departments, and vice versa. Given the extent to which treasury workflows are integrated with those of other stakeholders, it’s vital for treasury to communicate and collaborate effectively with these groups. To ensure total alignment and cohesion, treasurers must be proactive in establishing solid relationships with internal IT, accounting, and AP departments as well as external banking and solution vendors.

5. Ongoing Education is Vital for Staying Ahead of the Curve: Treasury and finance teams have made it clear they are intent on furthering their education and professional skillsets. This professional development is not limited to any one area but encompasses a broad array of topics across both technology and finance. In a digital world, many practitioners are relying on remote seminars and webinars, but in-person events and training are still on the list for many teams as well. Moving forward, it’s highly recommended that practitioners who are serious about their careers undergo regular education and training so that they can stay abreast of new industry developments and innovations.

How Can TIS Help?

The TIS team hopes that the findings highlighted in our research are helpful for teams currently evaluating their own treasury structure, technologies, and workflows. For businesses that view these insights and find themselves in need for enhanced payments, cash management, and banking functionality, we would strongly urge you to consider the solution and services provided by TIS.

Today, TIS is streamlining treasury automation through a cloud-based platform that is uniquely designed to help global organizations optimize global payments and liquidity. In essence, the TIS solution is a multi-channel and multi-bank connectivity ecosystem that streamlines the processing of a company’s payments across all their global entities and systems.

Sitting above an enterprise’s technology stack and connecting with all its back-office, banking, and 3rd party solutions, TIS effectively breaks down department and geographic silos to allow 360-degree payments visibility and control. To date, the more than 200 organizations that have integrated TIS with their global ERPs, TMSs, and banking landscape have achieved near-real-time transparency into their payments and liquidity. This has benefited a broad variety of internal stakeholders and has also enabled them to access information through their platform of choice. Data is available either through dashboards or direct downloads but can also be delivered back to the originating systems.

As part of our client-centric service model, we fully commit our own resources to your implementation and manage the configuration of all required system functionalities, back-office integrations, and bank connections on your behalf. Beginning with project kick-off and lasting through testing and go-live, TIS’ all-inclusive approach to customer support means you never have to rely on internal resources to maintain our solution or integrate it with your existing technology stack.

This systematically controlled payments workflow is managed by TIS for both inbound balance information and outbound payments, and data can be delivered from any back-office system via APIs, direct plug-ins, or agents for transmission to banks and 3rd parties. No matter where you operate from, TIS provides global connectivity and provides the real-time data, control, and workflows needed for treasury to automate and control their end-to-end payments and liquidity processes.

For more information, visit our website or request a demo with one of our experts.

 


Zeroing in on 4 Specific Ways Treasurers’ Can Improve Cash Forecasting

21-07-2022 | treasuryXL | GTreasury | LinkedIn |

Particularly with continued financial headwinds, accurate-as-possible cash forecasting and visibility are more critical than ever. But, according to a recent survey of hundreds of global treasurers, the process of generating forecasts has been either “somewhat difficult” or “extremely difficult.”


Jo Stevens, a senior product manager at GTreasury, wrote for Treasury & Risk on four specific best practices around how treasurers can improve cash forecasting and optimize their use of sophisticated forecasting technologies. Jo discusses how to capture more accurate data, how to best process that data with machine learning, how to approach cash visibility, and, crucially, how to continually adapt to meet ongoing forecasting challenges.

The Working Capital Forum Europe | Amsterdam 2022

20-07-2022 | treasuryXL | The Working Capital Forum | LinkedIn |

 

MANAGING WORKING CAPITAL IN CHALLENGING TIMES

 

 

On 1st December 2022, Working Capital Forum Europe brings together leaders in treasury, procurement, and payments to share ideas and techniques for better working capital management across supply chains.

That’s never been so important as in these times of rising interest rates, inflation, and supply chain shocks, when managing working capital is everyone’s concern.

From supply chain finance to accurate cash forecasting, solutions for every component of working capital management will be discussed on stage, demonstrated in our information area, and examined in our workshops at the world’s largest specialist working capital and supply chain finance event.

We’re delighted to return to Amsterdam for this one-day live event, with main stage keynote sessions, panel debates, and breakout workshops and demos.

If you’re interested in optimising working capital in your organisation, you need to join us in Amsterdam for the most productive day you’ve had in years.

Among the topics we will be covering are:

  • Cash forecasting and cash visibility
  • Payables finance
  • Receivables finance
  • Optimising receivables – get paid faster
  • Inventory management and inventory finance
  • Supply chain finance
  • ‘Deep tier’ supply chain finance
  • Funding options for trade and supply chain finance
  • Using working capital tools for ESG objectives
  • Credit insurance
  • Disclosure rules on supplier finance
  • Ratings agencies and their view of working capital solution

USE YOUR COUPON CODE VIA TREASURYXL

  • Banks, fintechs, and other solution providers can get 25% off the cost of a ticket using this TreasuryXL code: TXL2225
  • Corporate Treasurers can apply for a free ticket using this Treasury XL code: TXL22CG

TO REGISTER AND FIND OUT MORE VISIT:  WORKING CAPITAL FORUM EUROPE 

Visit the Working Capital Forum: https://www.workingcapitalforum.com/

Join our events here: https://www.workingcapitalforum.com/events

Enter the Working Capital and Supply Chain Finance 2022 Awards here: https://www.workingcapitalforum.com/awards.html

 

 

5 steps to effective fraud prevention in fintech

14-07-2022 | treasuryXL | Refinitiv | LinkedIn |

 

A recent Refinitiv expert talk looks at the digital banking and fintech arena, unpacking the compliance challenges that dominate the sector and offering advice for a best-practice response.

Read more

GTreasury Launches New Connectivity Suite for Treasurers

12-07-2022 | treasuryXL | GTreasury | LinkedIn |

 

Workflow Brings in Third-Party Banking, Payments, and Financial Data

ClearConnect ensures the fidelity of data essential to treasurers and CFOs

CHICAGO, Ill. – July 12, 2022 – GTreasury, a treasury and risk management platform provider, today announced the launch of ClearConnect. Featuring more than 80 API calls in a dozen key categories, ClearConnect offers the most robust connectivity suite available to treasury teams and the office of the CFO. The solution provides immediate access to the comprehensive data required for confident and actionable treasury insights, and ensures the fidelity and security of that data through purpose-built connections bolstered by GTreasury’s support.

While “API” is becoming a buzzword often associated with data connectivity solutions, the terms are not synonymous. API connections are only as powerful as the underlying workflows that support them. Activating an out-of-the-box API is not an instant panacea for an organization’s data needs. Without the right underlying workflows, APIs not attuned to a business’s specific requirements will drop or fail to capture all the data sets necessary to power effective analytics and data lakes. Given the complexity of treasury and risk management, those missing insights can result in significant consequences for treasury teams and CFOs.

ClearConnect provides both the powerful underlying workflows and the multifaceted purpose-built API-enabled connectivity to ensure that data capture is consistently done correctly and thoroughly—providing all the analytics an organization needs from a particular connection. The solution creates certainty, security, and seamless connections by integrating all data from business systems and financial institutions, and is capable of combining connection types for uniquely complete data sets and data fidelity.

Specifically, ClearConnect creates value for treasury teams and the office of the CFO by delivering:

  • Secure connectivity across the financial value chain
  • Extensions to corporate treasury workflows
  • Access to specialist solutions within the integrated platform
  • Lower bank fee costs through seamless connectivity
  • Access to multiple innovative FinTech products and services

ClearConnect’s market-leading API catalog features over 80 API calls, augmented by host-to-host connectivity wherever needed to bolster capabilities. The solution enables robust functionality across a dozen categories, including payment approval rules, payment workflows, payments and templates, balances and transactions, general ledgers, deal management, bank accounts, bank account management, legal entities, forecasts, operators, and data extracts. ClearConnect’s flexible connectivity architecture uses best-in-class API-enabled connections to ensure fidelity and continuity of customers’ most vital data. Connectivity into Swift, Fides, and others provides a single source of truth and visibility into an organization’s cash and financial risk, and delivers transparent workflows for payments, bank file monitoring, and more.

GTreasury’s always-expanding partnerships with leading global financial institutions and market data partners ensure seamless bank and ERP connectivity, domestic and international transactions, and access to market insights. As client needs change, GTreasury’s active collaborations with product partners further ensure the creation and delivery of modernized products and services, securing ClearConnect’s place as a market-leading solution always aligned with customers’ current data requirements.

From risk management capabilities powered by Moody’s Analytics and KYOS, to market data provided by Refinitiv and Fenics MD, to banking, ERP, investments, and payments partners, ClearConnect now enables customers to wield the full power of the GTreasury ecosystem even more easily and completely.

“ClearConnect doesn’t just offer a significantly greater breadth of connectivity options than anything else available, it also underwrites those capabilities with foundational workflows for data integrity and ease of use,” said Pete Srejovic, Chief Technology Officer at GTreasury. “Investing in API technology only to realize that you are dropping crucial data is a nightmare that has come true for many CFOs and treasury teams. With today’s launch of ClearConnect, we’re proud to offer not only the largest and most powerful API connectivity solution on the market, but one that customers can entrust to deliver absolute data integrity along with the comprehensive and future-proof solutions of the GTreasury ecosystem.”

       


About GTreasury

GTreasury believes there is opportunity in complexity. We connect treasury and finance teams with industry-leading experts, technology solutions and untapped possibility. By simplifying complexity, teams can unleash their organization’s potential to gain strategic advantages and grow. GTreasury helps organizations reach that potential by connecting treasury and digital finance operations through a world-class SaaS treasury and risk management platform and integrated ecosystem where cash, debt, investments, and exposures are seamlessly managed within the office of the CFO. GTreasury delivers intelligent insights, while connecting financial value chains and extending workflows to third-party systems, exchanges, portals, and services. Headquartered in Chicago, with locations serving EMEA (London) and APAC (Sydney and Manila), GTreasury’s global community includes more than 800 customers and 30+ industries reaching 160+ countries worldwide. Visit GTreasury.com