22-08-2023 | Recently we ran a poll to find out what solution treasurers thought was most important to maintain safety and security for financial processes.
27-07-2023 | The results are in, so find out what is considered the key strategy!
05-07-2023 | Recently we delved into a poll to gain further understanding of how far ahead treasurers do forecast. Are you a master of short-term planning, or do you have your eye on the future? The results are in, find out how you compare with your peers and learn from Conor Deegan of CashAnaltyics what can be learned from this.
01-06-2023 | treasuryXL and Nomentia recently discussed the issue of underutilisation of useful trade finance tools by corporate treasury departments in-depth during the recent live session “Trade Finance Trends: Innovations and Disruptions”.
30-03-2023 | Recently we had a live session regarding Interim Treasury and its benefits. We were particularly interested in your opinions on the key benefits of an interim treasurer.
09-02-2023 | The year’s second edition features a discussion on the newest treasuryXL poll results, including a review of treasurer voting patterns and expert perspectives on effective currency management.
A new year, a new edition in which we discuss the latest treasuryXL poll results. It is encouraging that once again many treasurers participated in the vote. We examined the voting patterns of treasurers and gathered the perspectives of experts Jack Gielen and Konstantin Khorev on the topic of APIs in treasury.
Who should “give a push” and work on APIs?
It is commonly understood that APIs are prevalent in today’s digital landscape. However, corporate treasurers can also reap benefits from API technology and its advantages. If you are unsure about the importance of APIs in Treasury or need more information, you should definitely watch the recording of the joint webinar together with Cobase on the future of APIs. It is encouraging that once again many treasurers participated in the vote. The current treasuryXL poll remains open and we encourage you to continue to have your voice heard! You can cast your vote on this link.
Question: Who should “give a push” and work on APIs?
That looks quite straightforward: partners should join forces. Do the treasuryXL experts agree, or what is their view on this?
View of treasuryXL experts
Jack voted for the option that partners should join forces.
“APIs and the benefits are clearly on the map but there is also an understanding that there is still work to be done before those benefits will really be realised”
It is good to see that regarding the results of this poll, the market agrees that the success of corporate APIs and OpenBanking requires cooperation and cannot be dictated by 1 party. This means Treasurers clearly understand the complexity of the playing field. At the moment, although there are many initiatives by individual parties, there is a need to create a good partnership where the whole eco-system works together
The main benefits that APIs could realise if banks and companies were to work together are:
- Better integration of banking services into customers’ own internal systems,
- Easier connection to new banks and expansion of banking services
- Better and more real-time data that can be converted into actionable information
These benefits translate into being able to use the systems the treasurer has chosen more efficiently and better, more up-to-date insight into status, exposures and required actions.
Recently, Cobase set up the webinar “The Future of APIs” in collaboration with treasuryXL to discuss this topic. I was particularly impressed by the level of knowledge Treasurers have gained over the past year which was also reflected in the questions. APIs and the benefits are clearly on the map but there is also an understanding that there is still work to be done before those benefits will really be realised. Ultimately, the priority with the end customer, the treasurer, will determine how quickly other market players act.
Konstantin voted for the option that partners should join forces.
“By working together, we can achieve a more efficient and effective treasury management system.”
I agree with the majority view that the implementation of APIs in the treasury field should be a collaborative effort. Banks will play a key role in implementing these changes, but it is also crucial for corporates and TMS providers to set and specify the requirements. This ensures that the solutions being implemented align with the unique needs and goals of each individual corporate, and TMS providers can develop the tools and services necessary to support these needs. By working together, we can achieve a more efficient and effective treasury management system.
Recently, my latest article on this topic was published on treasuryXL. In it, I try to make it plain that APIs are a nice and easy solution, although they come with some limitations and challenges. At the same time, I believe that the future of bank connectivity lies in API technology. What do you think?
As 2023 is approaching, we explored what Treasurers are particularly looking forward to in treasury for next year. What will be the Treasury Trend of 2023? Are treasurers curious to know what is going to happen in the area of Market and FX Risk Management, or just what the developments are going to be in e-commerce related to Treasury? Or will the understanding of APIs in Treasury be the story of 2023, or the role of Treasury within companies? We sought it out!
What will be the Treasury Trend of 2023?
As 2023 is approaching, we explored what treasurers are particularly looking forward to in treasury for next year. What will become the trends in treasury management next year?Are treasurers curious to know what is going to happen in the area of Market and FX Risk Management, or just what the developments are going to be in Ecommerce related to Treasury? Or will the understanding of APIs in Treasury be the story of 2023, or the role of Treasury within companies? We sought it out! This topic was also the subject of discussion during the last webinar together with Nomentia, you can find the recording here.
Question: What are you particularly interested in that will develop in 2023 in treasury?
We see that Market and FX Risk Management stands out a little, and that there is less focus on trends in e-commerce and Treasury. What do those within treasuryXL say about this, and what are they looking forward to for next year?
View of treasuryXL experts
Huub is especially interested in the developments in APIs for Treasury for in 2023.
“My personal interest is in the focus on APIs, which is good, as APIs offer new functionalities and convenience for treasurers”
With the current political and economic turmoil, it makes sense that market risk is back on the agenda. Interest rates are rising and emerging markets are becoming riskier. My personal interest is in the focus on APIs, which is good, as APIs offer new functionalities and convenience for treasurers. However, it is a jungle because everyone promises APIs, but few deliver on them, and the few that do make them have no standards.
We also see APIs that are ‘disguised’ file connections. This makes sense, because an API means linking two applications and this can be done through authentication, security and then exchange of a file. We see this a lot with Payment Service Providers. Getting reporting files for matching purposes, for example.
The webinar the other day was interesting because Niki and I represent two different areas of treasury that are important to Patrick, a very experienced treasurer, namely market risk and technology. Together with Pieter as moderator, it was fun to hear the different perspectives and experiences!
Kim is especially interested in the developments of Market and FX Risk Management for in 2023.
” Important question for the treasurer will remain what to do about this.”
I chose for Market and FX Risk Management. I think especially with inflation and higher interest rates, this is going to have an impact on the treasurer’s work within the treasury department.
This is obviously all going to play through on companies’ costs, and pressure on selling prices will also increase. Important question for the treasurer will remain what to do about this.
How this will affect the treasury market compared to the current year remains to be seen. That is what we are going to witness at Treasurer Search.
treasuryXL is the community platform for everyone with a treasury question or answer! A common question asked by treasurers is what Factoring means in Trade Finance. In today’s article Ask the treasuryXL Expert, Wim Kok defines factoring in trade finance for us.
Question: “What is Factoring in Trade Finance?”
Answer provided by Wim
What is Factoring in Trade Finance?
Well, there is a pretty good definition included in the Standard Definitions for Techniques of Supply Chain Finance, prepared by the Global Supply Chain Finance Forum and published by the ICC in 2016. It is currently being updated, but the definition is still alright.
There they give the definition of factoring in trade finance as: Factoring is a form of Receivables Purchase, in which sellers of goods and services sell their receivables (represented by outstanding invoices) at a discount to a finance provider (commonly known as the ‘factor’). A key differentiator of Factoring is that typically the finance provider becomes responsible for managing the debtor portfolio and collecting the payment of the underlying receivables.
Would you add anything to this definition?
There are a number of things I would add to this to explain the terminology and make it more clear:
- The term “factoring” is sometimes used as an umbrella term for all forms of invoice financing, including confidential invoice discounting. Strictly speaking, “factoring” refers to both debt management and debt purchase.
- In the UK, factoring is usually communicated to the debtor, as the collection procedures are carried out by the funding provider (the “factor”).
- Non-public factoring is usually more popular than full factoring. In this case, the customer retains control over the collection of the receivable.
- In some markets, disclosure is required by law. Some even require the debt to be formally acknowledged before purchase.
- In the UK, the standard practice is for the factor to purchase all debt – known as “whole turnover” – even if not all debt is eligible for financing. This gives the factor leeway to absorb any dilution or non-payment of individual invoices. Banks also take secondary security in the form of an “all-asset debenture”. This is registered at Companies House and notifies other potential lenders that debts have been transferred.
- A subtle but important point is that a debt assignment can serve two purposes: it can mean that the debt has been bought or that the debt has been taken as security for a loan.
- Many Fintechs offer single invoice/selected invoice/selected debtor solutions, but these are inherently riskier than whole turnover solutions. Large bank providers are generally reluctant to follow suit.
- Factoring can be done with or without recourse. Even arrangements without recourse include provisions allowing the factor to require the customer to buy back the invoice under certain conditions (e.g. contractual dispute).
- Factoring can possibly be “wrapped” in credit insurance.
- In the UK, major finance providers tend to operate an “availability model” in factoring rather than funding individual invoices. The “availability” changes in real time as new eligible debts are purchased (within agreed counterparty limits etc) and existing debts are settled, defaulted or become ineligible. The customer can then draw down to “availability” at any time. This is similar to a “borrowing base” approach, albeit with frequent increases and decreases within the day. This model, combined with the “whole turnover” mandate, provides the factor with a secure source of repayment even if some invoices remain unpaid.
I trust this will be helpful and give more insight into this subject.
Do you also have a question for one of the treasuryXL experts? Feel free to leave your question on our treasuryXL Panel. The panel members are willing to answer your question, free of charge, with no commitment.
The fifth edition in which we discuss the latest poll, is available for your reading. We show how treasurers voted to express their opinions on a current issue, and several of our treasury experts will talk about their perspectives.
How important is it for you that someone has a well-known Treasury degree?
There are plenty of education and training courses in treasury, with the aim of obtaining treasury certificates. We wanted to explore how important you think this is, in the job market or for other things. There was a very good participation in the poll, resulting in a record 113 votes. Thank you everyone for actively participating, and join us in voting for the poll that is currently live and let’s try break the record votes right away!
Question: How important is it for you that someone has a well-known Treasury degree? On the job market or for other things?
How do treasures think of a treasury degree?
We see a considerable spread of votes. A large proportion of treasurers value expertise more than a degree. On the other hand, a large proportion considers a treasury degree minimally of high importance. Some of our treasuryXL experts from different backgrounds explained their views on the subject.
View of treasuryXL experts
Konstantin voted for the option that a treasury degree is a guarantee of quality.
” Specific, treasury-focused education certainly makes sense.”
From the perspective of a recruitment manager who has conducted a number of interviews, I find that a standard academic programme does not focus enough on the topics relevant to the treasury function.
For example, I note that too many candidates for treasury positions find it difficult to understand or don’t know FX forward pricing (relationship between interest rate differential, spot and forward pricing), or don’t understand the difference/relationship between net income and cash flows, etc.
And, of course, these are only general topics; other topics – like cash pooling or hedge accounting are just not part of the regular curriculum. Therefore, specific, treasury-focused education certainly makes sense.
Arnoud voted for the option that a treasury degree is just one of the key aspects.
” There are also elements that you can never learn from a book”
A treasury degree is a great start to a career in treasury. But after having interviewed many candidates in my life, I am also convinced that practice is also a very good learning opportunity. There are also elements that you can never learn from a book. You must have done that. But a treasury degree is a nice theoretical framework to start with.
In treasury you have to think in terms of cash flows and risks. In addition, you still need some understanding of financing, how to price it in relation to the risk that the bank runs on your company.
I don’t have a treasury degree myself, but I am completely self-made man. After 25 years in dealing rooms of banks and then 9 years as a treasury consultant, I think I have seen all facets of the profession.
François voted for the option that a treasury degree is a guarantee of quality.
” It is key to ensure that both the candidates and the current treasury staff keep their treasury knowledge updated”
Within Finance, Treasury is a fast-moving activity, which requires in addition to the soft skills a lot of technical skills and competencies. We are in the war for talent, and we experience more and more staff rotation. Hence it is key to ensure that both the candidates and the current treasury staff keep their treasury knowledge updated.
Several programs have been developed, the most well known being the ACT Certificate in Treasury Fundamentals. In the Netherlands NIVE also organizes the QCM (Qualified Cash manager) and QT (Qualified Treasurer) training. In Luxembourg, ATEL organizes with the House of Training the Certificate in International Treasury Management and Corporate Finance, with a Fundamentals version and an Advanced version.
Some treasury associations partnering with universities to provide treasury certification. In France, the AFTE has teamed up with the university of Paris Sorbonne, the university of Rennes and the University of Lille to develop a full master program in Treasury Management.
We also have in the Netherlands the Vrije Universiteit Amsterdam who organizes the postgraduate Executive Treasury Management & Corporate Finance program combining two finance disciplines which largely overlap and are inextricably connected: Treasury Management and Corporate Finance. It has now been running for more than 20 years.
Beside this we have a lot of other treasury trainings organized by organizations such as Van Groningen, Finsiders Academy, Orchard Finance, etc. However, they do not offer a certification.
In an ever more sophisticating environment, and in view of the increased regulations, it is for me key to look at certified trainings to build a solid background in a Treasury Management field. It enables to meet other talented treasurers and teachers. In addition, thanks to the certification, based upon an examination and/or end paper, you can get a additional quality label, which can be very useful in your career.
In this respect, I wish to share my personal experience in a completely different area. I am currently looking for Board Mandates and realized that there also a certification can be useful. Hence I have started the Guberna programme to become a Guberna Certified Director.
In the event that due to circumstances, you cannot follow certified trainings, you can also get a certification thanks to the Treasurer Test developed by treasuryXL.