Effective Finance & Treasury in Africa | Eurofinance

07-02-2023 | Eurofinance | treasuryXL | LinkedIn |

Join senior treasury peers on March 7th in London at EuroFinance’s 10th annual Effective Finance & Treasury in Africa. Understand changing developments and the unique opportunities and challenges of doing business in this dynamic region.

This year’s speaker line-up includes experienced treasurers – all active in African markets – including:

● Edward Collis, Treasurer, Save the Children
● Neiciriany Mata, Head of finance, Angola Cables
● Marta de Teresa, Group treasurer, Maxamcorp
● Chigbo Enenmo, Finance and treasury manager, Nigeria LNG
● Folake Fawibe, Integrated business service lead, Danone, Southern Africa
● Jan Beukes, Group treasurer, MultiChoice Group

They will discuss important topics including cash and FX, payments, liquidity and financing, digital transformation, share success stories and provide practical guidance on how to optimise your treasury operation for growth.

For the full agenda and to register, please visitt this link.

Quote discount code MKTG/TXL10 for an exclusive 10% discount for TreasuryXL readers.

If you have any questions, you can contact the EuroFinance team directly at [email protected]


Registration is open – find out more and register now.



Liquidity Benefits From Dynamic Discounting in Supply Chain Financing

10-05-2021 | treasuryXL | Kyriba |

It might not always be obvious where business can learn lessons from somewhere like yacht racing, particularly in more specialist fields like Supply Chain Finance and Dynamic Discounting. But there are often uncanny parallels from this sport and finance, when both seek to deploy serious sums of money and leading-edge technology to deliver the marginal gains that can mean the difference between winning and losing.

I thought this was particularly evident in the recent America’s Cup yacht racing challenges in New Zealand. Those AC75 mono-hull super yachts that raced around the bays off Auckland often travelled at a logic-defying 40-50 knots, twice as fast as the winds that powered them and seemingly in defiance of both gravity and conventional sailing speed barriers.

Liquidity Made Good

The key to having one AC75 go faster than an almost identical competitor is the ability to analyse masses of data points in real-time to make the required adjustments to sails, rudders, weights and foils in order to attack the optimum route to the finish at maximum speed. It’s a concept called Velocity Made Good, with VMG now the go-to acronym that defines winners in America’s Cup racing. Perfecting VMG was the reason the New Zealand boat successfully beat its global challengers – again.

I was particularly struck by how this VMG-led transformation of yacht racing, now cascading down from the pinnacle of the sport to the club level, is not dissimilar to how a focus on technology-led cash and liquidity management is liberating corporate balance sheets. We could even refer to it as Liquidity Made Good, where, by the way, velocity also matters.

New Level Playing Field

The deployment of more powerful technologies can improve decision-making, release resources from previously opaque silos and supply chains, and deliver new competitive advantage. Historically this was only available to those high-tech firms and financial institutions with deep pockets, just like the owners of America’s Cup yachts, because of the almost prohibitive cost of computing power, data storage and analytics.

But cloud-based software platforms, the blossoming of data analytics, ubiquitous access to near-unlimited data storage and the power of connectivity-as-a-service now ensures, like in yachting, that these benefits filter down from the elite to level the playing field.

Greater Flexibility, Visibility

In particular, the once sleepy backwaters of trade finance are now waking up to new opportunities to maximise cash resources in ways that not only strengthen supplier relationships, but also enhance Corporate Social Responsibility credentials. Early Payment Discounting has been around trade finance for many years. But persistent, ultra-low interest rates and expectations of greater flexibility now demand more creative solutions from Treasurers. Answers to which technology can now help to provide.

Dynamic Discounting

Within the broader field of Supply Chain Finance, firms can now use technology to transform early payment schemes into Dynamic Discounting. These can be deployed as an integral part of wider working capital management, where better visibility can optimise liquidity and improve profitability. It might seem just a simple method of paying invoices earlier, particularly for businesses with surplus cash that can benefit both parties involved. But how it is managed becomes critical to the outcome.

Win-Win Solution

For Dynamic Discounting to succeed, it needs to be sufficiently flexible (dynamic) as to how and when suppliers are paid, with payments made prior to due dates at a discount to original invoice values calculated on a sliding scale. This means that the earlier the buyer pays a supplier, the greater the discount. The discount is therefore “dynamic” in relation to the number of days until the invoice due date and avoids the previous “cliff edge” difference between simply either having a discount or not.

Most importantly, suppliers get continuously paid earlier, which improves their liquidity position and which could then allow them to pay their own suppliers earlier, invest more in their business or alternatively just do more business with the buyer.

Funding Flexibility

For a cash-rich buyer operating in a low interest environment, the benefit is obvious. Rather than leaving liquidity in a low-interest account, it can pay large invoices early to receive additional discounts and strengthen profitability. For instance, if a buyer receives a 2% discount for paying a 90-day-net invoice after 30 days, it can invest the amount for 60 days and receive a return. This is the equivalent of a just over 10% annual return on capital that would far outweigh any loss of interest.

The buyer is fully in control of how this program is run, determining how much funding capital to set aside and adjusting that capital as seasonal liquidity fluctuates. Any seasonal liquidity issues could then also be managed by pairing the dynamic discounting program with a traditional SCF program. This would also allow the flexibility for third-party funding to fill any gaps that emerged due to potential, or periodic, lower cash balances available for the original arrangement.

Besides earning a return on excess cash, Dynamic Discounting can also reduce supply chain risks (in that financially more stable suppliers mean reduced supplier risk) and then strengthen supplier relationships. Conversely, on the supplier side it improves cash flow and provides early payment options, both of which save time, puts cash into accounts sooner and increases liquidity visibility. Benefits everywhere!

CSR Benefits – Risk Free Returns

There’s no such thing as a free lunch, but there are other compensating benefits to offset the initial costs of implementing a modern Dynamic Discounting plan, not least of which can be a significant increase in ROI on otherwise dormant cash without increased risk. After all, you are only effectively paying existing suppliers early, who you have to pay anyway, free of any additional counterparty risk.

And, as I mentioned earlier, today’s much more keenly scrutinised CSR credentials can also be significantly burnished by the support provided to often much-smaller suppliers down the food chain. That can then be more widely communicated directly to CSR scoring tables which, in turn, recognise responsible buyers and suppliers.

So, to get the maximum benefit of the wind in your sails and the best performance from your assets, make sure you use the right technology to strengthen decision making. After that, understanding the challenge, minimising the risks and reaping the mutual rewards of Dynamic Discounting will enable much smoother sailing and help you optimise your liquidity!


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?


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.





Director, Community & Partners at treasuryXL





How to mitigate credit risk

09-02-2023 | treasuryXL | Kantox | LinkedIn |

When managing foreign currencies there is an underlying FX risk that Treasurers may not see, the credit risk. In this week’s episode of CurrencyCast, Agustin Mackinlay explains how to mitigate this risk.

Disclaimer: This information is being shared for informational purposes only and was originally published by Kantox (Source)

Embrace currencies to protect your capital, maintain your cash flow, secure your earnings and access better financing! Let’s find out how to mitigate the consequences of the underlying FX risk, the credit risk.

When working with foreign currencies, CFOs and treasurers have the mission to try to reduce the FX risk as much as they can. But there is an underlying currency risk that they could be missing, credit risk.

In this week’s episode of CurrencyCast, we shared the secrets to mitigating credit risk by embracing currencies. Now, we will explain in detail what are the key actions that involve eliminating this risk.

Understanding credit risk in currency management

There is an underlying currency risk that you are probably not seeing and could eliminate easily just by following a simple rule in your currency management strategy, embracing currencies.

This is the credit risk or, more precisely, the risk in account receivables when customers need to settle their bills in a different currency than their own.

Why embracing currencies is the secret to tackle credit risk

What do we mean by embracing currencies? There are many benefits that treasurers and CFOs can gain from implementing a multi currency approach to their FX strategy.

Some of them include the ability to price more competitively or boost your company’s profit margins just by operating with multiple currencies. But there is one which is helping companies drastically reduce currency risk, by uncovering the underlying credit risk.

We’ll reveal the advantages of taking ownership of the underlying FX risk so that you can expand your business with full confidence.

Uncovering the underlying credit risk 

If you are selling in Emerging Markets like Brazil or Turkey but using only one currency like EUR or USD, you might be tempted to think that you have solved the currency risk problem.

But that’s an illusion: the underlying currency risk is still very much there. By urging customers to use a currency that is foreign to them, you are in effect transferring that risk onto their shoulders.

In the event of a sharp devaluation of the local currency, they might feel inclined to wait for a better exchange before settling their bills. In other words, your customers would speculate in FX markets with your firm’s money.

We’ve seen that phenomenon at play after the pandemic, both in Latin America and Eastern Europe. As a treasurer or CFO, you don’t want to be in that position.

Taking ownership of the underlying FX risk

In order to avoid your client’s FX risk from turning into your own credit risk, the solution is to sell in the currency of your customers while taking care of the underlying FX risk. Needless to say, this presupposes a strong, automated currency cash flow hedging program.

Such programs include: hedging firm sales/purchase orders as they materialise, hedging forecasted exposures for one or more campaign/budget periods, or a combination of these, with tools that provide visibility over the exposure throughout.

Advantages of owning the currency risk

Now you know the importance of seeing there is another added layer to your currency risk that you could be missing. It is time to consider the advantages that would flow from taking full ownership of the underlying currency risk:

  • Capitalprotection. You are protecting your firm’s capital against catastrophic loss while managing reputational risk at the same time
  • Cost of capital. You are reducing the cost of trade credit insurance if you use it, slashing lousy debt reserves and freeing up capital
  • Performance. You are securing company earnings while maintaining cash flow
  • Commercialexpansion. You are in a position to expand sales with confidence, gaining market share and/or targeting new customers

Finding a solution to mitigate the risk efficiently

After uncovering the underlying FX risk, you need a solution to mitigate the credit risk.

A currency management automation solution could be the answer for companies that want to embrace currencies. This type of tool can streamline your currency management strategy and automate your entire FX workflow to reduce FX risk, including the ‘hidden’ credit risk.


As we mentioned before in this episode of CurrencyCast, we live in a multi-currency world where businesses can take advantage of the profit margin-enhancing benefits of selling in many currencies, like monetising existing FX markups or driving high-margin sales to company websites.

Thanks to automation, these advantages far outweigh the perceived inconveniences and costs of managing the underlying FX risk. And, in the current scenario of uncertainty, you get an additional and very attractive bonus: less credit risk in your commercial operations. That’s quite a lot!

2023 Treasury Priorities & Opportunities Survey Results

17-01-2023 | treasuryXL | TIS | LinkedIn |

Now in its 2nd consecutive year, TIS is excited to release the findings from our 2023 Treasury Priorities & Opportunities Survey. Having run throughout the course of Q3-Q4 2022, our research again captured responses from hundreds of U.S. finance and treasury practitioners operating at companies of all sizes and industries. The goal was to capture their perspectives on a range of items including the ongoing adoption and use of finance and treasury technology, as well as upcoming staffing plans, strategic and operational expectations, and overall trends occurring in the space.


This blog serves as a summary overview of the key results and findings from TIS’ 2023 Treasury Priorities & Opportunities Survey. To access the full results and analysis, you can download the extended whitepaper here.

  • Overall Composition of Treasury Operations
  • Treasury Staffing & Professional Development Plans
  • Treasury Technology Investment & Focus
  • Cash Forecasting Preferences & Workflows

This image provides the demographics related to TIS' recent 2023 treasury industry survey.

In total, over 250 practitioners responded to this year’s survey, which consisted of roughly 30 questions. All respondents held roles in either treasury or finance. In addition, all respondents were operating at companies with headquarters in the U.S., but most maintained an active international presence.

In terms of company size, 34% of represented companies had annual revenues of $100M – $1B, and another 34% had $1B – $10B annual revenue. 14% had revenues of over $10 billion, while 18% were under $100mm.

Regarding industry representation, construction and manufacturing firms accounted for over 27% of all respondents. Companies from the software, education, insurance, retail, and automotive sectors collectively accounted for another 40%.

In aggregate, our 2023 research initiatives are representative of an appropriately diverse spread of treasury and finance practitioners from a variety of company sizes and industries.


Treasury Responsibilities Increase as Staffing & Technology Investments Remain High 

The findings from our 2023 research highlighted that despite strong economic headwinds and market uncertainty, a significant number of treasury teams are still expecting to add more staff and adopt new technologies in the year ahead. In fact, while 48% of teams expected to add more staff, only 3% planned to reduce their headcount. Similarly, over 50% of respondents plan to invest in new cash management and payments-related technologies.

This should be taken as generally reassuring news for practitioners, especially given the wide-ranging budget and staffing cuts that have occurred within many U.S. companies and institutions in the past few months. However, these new technology and staffing additions are also being coupled with a new set of responsibilities and expectations from business leaders that may place greater strain on practitioners. These heightened expectations were clearly evident in our research, with 77% of practitioners indicating their list of responsibilities would increase in 2023, while just 2% believed their workload would be reduced.

Regarding the nature of these new responsibilities, it appears that many treasury teams are being relied upon to execute and contribute towards more “strategic” internal functions. Based on the data, 57% of practitioners indicated that the strategic role of their treasury group would expand in 2023, while just 4% indicated a decrease. Going a step further, when asked whether treasury was viewed as more “operational” or “strategic” by management, practitioners were evenly split in their perspectives at 48% strategic and 52% operational, respectively.

Treasury's strategic impact is projected to grow in 2023 based on recent industry survey data.

Looking deeper into the growing influence and responsibility of treasury, another interesting finding was that most treasury teams seemed to exert heavy control over their company’s AP and AR operations, either directly or indirectly. On average, 69% and 67% of treasury groups maintained some level of control over these operations, with little deviation between companies of different sizes and industries.


Cash Forecasting is a Top Priority for Treasury in 2023 

Although cash management and forecasting operations have long-been standard treasury responsibilities, data shows that practitioners have been placing an even greater focus on these operations over the past year.

Since early 2022, several major U.S. corporate treasury studies including AFP’s 2022 Strategic Role of Treasury Survey and Strategic Treasurer’s 2021 Treasury Perspectives Survey saw cash management, forecasting, and working capital projects ranked as top priorities for treasury teams. Our 2023 research corroborated these results with data showing cash management technology being the top priority for new software investments over the next year. In addition, cash management skillsets were listed as the most emphasized area of professional development focus for treasury teams in 2023.

Turning to cash forecasting, one primary focus of our research was learning more about the various forecasting workflows and strategies leveraged by treasury groups and companies of different sizes and industries. At a high level, we found that nearly half of survey respondents used a TMS to produce cash forecasts, with 20% leveraging an ERP and nearly 30% relying on Excel Spreadsheets. While Excel is still used predominantly by smaller teams, the use of TMS and ERP products was much more popular for companies with $500mm+ in annual revenue.

Cash forecasting trends for treasury in 2023 based on company size.

Regarding the preferred forecast horizon, 27% of teams focused on monthly forecasts, while 38% were prioritizing weekly analysis and 25% daily. Generally, smaller companies were only half as likely to conduct daily forecasts compared to larger firms, but 2x more likely to conduct quarterly forecasts. On the other hand, larger firms were more likely to conduct forecasts across numerous time periods including daily, weekly, and monthly. In aggregate, weekly forecasts were the most popular analysis period across all sizes and industries.

As a final point on forecasting and in-line with the broader digitalization shift that has been occurring in treasury for years, the top priority for practitioners when improving their forecast process revolved around either migrating away from legacy Excel-based processes or upgrading their existing software to achieve greater accuracy and automation.

To learn more about this research and for extended results and analysis, download the full whitepaper here. You can also watch our recent results webinar that features commentary on the key survey themes by a panel of industry experts.

LIVE SESSION | Unlock the Benefits of Interim Treasury Management

14-02-2023  treasuryXL | Treasurer SearchLinkedIn


Join us for a thought-provoking Live Session on Interim Treasury Management, where our experts will delve into the pros and cons of this exciting market.

Unlock the Benefits of Interim Treasury Management: Discover Why it’s a Must-Have for Your Business!



Our panel of seasoned interim treasurers, including Emiel van Maris, Francois De Witte, and treasury recruiter Pieter de Kiewit, will share their valuable insights and experiences.

This webinar is designed for aspiring interim managers, potential clients, and anyone interested in learning more about this market.

Don’t miss this opportunity to gain tips and tricks from the experts in the field and engage in an open discussion.

Register now to secure your spot!




Everyone is welcome to this webinar.

🌟Moderator: Pieter de Kiewit of Treasurer Search

🌟Duration: 45 minutes


𝘉𝘺 𝘳𝘦𝘨𝘪𝘴𝘵𝘦𝘳𝘪𝘯𝘨 𝘺𝘰𝘶 𝘤𝘰𝘯𝘴𝘦𝘯𝘵 𝘵𝘰 𝘳𝘦𝘤𝘦𝘪𝘷𝘪𝘯𝘨 𝘤𝘰𝘮𝘮𝘶𝘯𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴 𝘧𝘳𝘰𝘮 𝘵𝘳𝘦𝘢𝘴𝘶𝘳𝘺𝘟𝘓 𝘳𝘦𝘨𝘢𝘳𝘥𝘪𝘯𝘨 𝘵𝘩𝘦 𝘭𝘢𝘵𝘦𝘴𝘵 𝘵𝘳𝘦𝘢𝘴𝘶𝘳𝘺 𝘪𝘯𝘴𝘪𝘨𝘩𝘵𝘴. 𝘠𝘰𝘶 𝘮𝘢𝘺 𝘸𝘪𝘵𝘩𝘥𝘳𝘢𝘸 𝘢𝘯𝘺𝘵𝘪𝘮𝘦. 𝘗𝘭𝘦𝘢𝘴𝘦 𝘳𝘦𝘧𝘦𝘳 𝘵𝘰 𝘰𝘶𝘳 𝘗𝘳𝘪𝘷𝘢𝘤𝘺 𝘗𝘰𝘭𝘪𝘤𝘺.

We can’t wait to welcome!

Best regards,



Kendra Keydeniers

Director, Community & Partners





The Best Way to Generate a Return on Cash in 2023

16-02-2023 | treasuryXL | CashAnalytics | LinkedIn |

Aside from boosting free cash flow and increasing cash on hand, good cash management will have a direct impact on your bottom line. With the recent increases in interest rates, the opportunity cost of bad cash management is now much higher and can be measured directly in income and profit.

Banks and other lenders were, as expected, quick to pass on the interest rate increases to their clients. Any company with floating rate debt has already felt the impact. J.P. Morgan guided last week that it was under pressure to increase the prices it pays for deposits as reported record net interest income of $20.3bn in the fourth quarter of 2022, up 48% on the same period last year.

While putting spare cash on deposit and earning interest can help to offset the cost of debt, due to the difference in lending and deposit rates, the best way to earn a return on excess cash in 2023 is to repay debt and reduce interest costs. This is a return that can be directly attributed to your use of excess cash.

Who can generate the highest return?

To generate the highest return and benefit from this type of strategy some form of revolving or easily repayable debt facility will be required. Companies using these types of facilities can pay them down when excess cash is available and draw down when liquidity is needed.

Companies with fixed term debt may not benefit from this type of strategy immediately, however it’s worth considering layering different types of facilities into the mix upon refinance or maturity of current debt facilities. For example, carving out a portion of a fixed facility as a revolving cash facility or an overdraft would afford the flexibility to use excess cash to reduce interest costs.

Debt minimisation as a strategy

The process of using cash to keep debt levels minimised, on an ongoing basis, needs to be wrapped in a clear strategy. This can’t be a sporadic or one-off activity as the business will never gain the full benefit of “investing” cash in debt minimisation and it may in fact introduce unnecessary cash and liquidity risk.

A strategy should be put in place with the clear objective of using cash flow to boost profitability by reducing interest costs while ensuring the liquidity needs of the business are safeguarded.

Steps to putting this strategy into action

As with any strategy, it needs to be tailored to the specific needs of the business however the following steps should be taken by any company looking to put it in place.

1. Gain executive buy-in and support

As the Treasurer, controller, or cash manager, implementing and managing a strategy like this will require time and effort. It will likely become a priority within your role and team. Therefore, it’s something that will require the sponsorship of executives, all the way up to the CFO and CEO, and the buy-in of other key stakeholders in the process. This will ensure it gets both the support and investment it needs to succeed.

2. Robust cash flow forecast

A robust cash flow forecast that provides clear visibility over future cash flows, needs and requirements across your business is an essential part of any debt minimisation strategy. With the visibility provided by a reliable forecast you will be able to make the necessary drawdown and repayment decisions with confidence.

The specifics of the forecast and the level of detail required will depend on the business, however, a forecast extending to at least 13 weeks will be needed to effectively manage this new process. A 13-week forecast is the right duration to manage short term cash and debt management decisions while providing the mid-term visibility needed to understand what’s quickly coming down the tracks.

If you don’t have a cash forecast in place, check out our guides on both setting one up and building the business case to make improvements.

3. Daily cash monitoring

In this new environment, where every dollar of spare cash is put to good use, it’s important to monitor cash flowing across bank accounts and available cash balances daily.

This doesn’t have to be a detailed analysis or a bank reconciliation, however, understanding what’s happening with cash flow day-to-day in the business, notably how much cash is on hand at any stage, is critical to planning short to medium term liquidity.

4. Regular reviews and reforecasts

This isn’t a set and forget strategy. Regular reviews of forecasts and regular reforecasts will allow you to understand how expectations are playing. This allows you to take account of new information which impacts assumptions and ultimately your view of your future cash needs.

A key part of the reforecasting is variance analysis which will allow you to understand the accuracy of previous forecasts and make the necessary adjustments to futures ones.

Reviews should also include the stakeholders in the process. Where people within the business, such as controllers in subsidiaries, feed into to the forecast, they should be engaged on a regular basis to both review and discuss their cash flow plans.

A driver of significant long-term value

It might be tempting to sit on a cash pile, earning little or no direct return, to safeguard against future surprises but businesses who ensure that their cash flow is always working have been proven to drive significant long-term value for their shareholders and owners.

The incremental value of always using cash efficiently, in this case to reduce debt and interest costs, not only drives enhanced returns but also builds muscle discipline within the business that which helps it better manage the inevitable future shocks and unforeseen events.

Is Your Foreign Currency Risk Out of Control? 5 FAQs

20-02-2023 | treasuryXL | GTreasury | LinkedIn |

When left unaddressed, foreign currency risk can wreak havoc on your bottom line. But it doesn’t have to be this way. To keep foreign currency fluctuations under control and drive predictability in financial statements, many companies turn to FX hedge programs.

Source: GTreasury

Here are 5 frequently asked questions about foreign currency risk and FX hedge programs.

#1. What is Foreign Currency Risk?

Foreign currency gains and losses occur when a company transacts in a currency other than their home currency.

A foreign currency transaction results in either a payment or receipt of that currency and the amount of U.S. dollars it will take to pay the payment or collect from the receipt changes with exchange rates.

When companies have hundreds or thousands of these types of transactions, the gains and losses due to the exchange rates can add up quickly.

#2. Are Gains from Foreign Currency Fluctuations a Good Thing?

Even though a large gain on your bottom line seems appealing – especially compared to a large loss – it also indicates instability in your financial statements month-over-month and year-over-year. Not to mention, the nature of fluctuating exchange rates means times of gains are temporary and large losses are inevitable.

More often than not, companies value predictability and stability in operations. And that’s what an FX hedge program provides.

#3. What is a Foreign Currency Hedge Program?

An FX hedge program protects the amount of home currency needed to make a foreign payment or receive from a foreign currency collection. In doing so, it eliminates a majority of the foreign currency gain and loss noise in financial statements you may have been experiencing. Large swings in either direction will no longer happen, which means you’re able to explain your true business results more effectively to your Board.

#4. Does a Hedge Program Create Zero FX Gain/Loss?

A hedge program doesn’t mean zero FX, but it does reduce a majority of the fluctuations. What’s left over can be explained by a handful of “buckets” – such as un-hedged currency impacts or under-hedging a currency amount.

#5. Can an FX Hedge Program be Implemented Quickly?

Yes! Starting a hedge program can be done quickly. Many times, a foreign currency risk problem can be fixed in just a few weeks or months – especially when you work with a partner that puts programs together every day. Supported by automation, your FX hedge program can get up and running fast – and continue to run seamlessly from there.


Companies operating internationally are exposed to currency risk – a risk to earnings driven by changes in currency exchange rates. The ones that hedge their currency risk have certain advantages over non-hedgers. For example, instead of just experiencing the changing exchange rate impacts, these companies are afforded predictable results and time to react to changes.

If you’re curious about implementing a hedge program or just got tasked by your Board to fix a problem Hedge Trackers can help – and fast.

Treasury fundamentals in 2023

17-02-2023 | treasuryXL | Kantox | LinkedIn |

Get ready for 2023 with our deep dive into the treasury fundamentals that will take over the currency management scene. All you need to know, from trends to technology, in one article.

Disclaimer: This information is being shared for informational purposes only and was originally published by Kantox (Source)

CFOs and treasurers are getting ready to face the many challenges of 2023. Finding the right approach to currency management will help them protect their company’s margins and adapt to the new reality.

In this episode of CurrencyCast, we sat down with our special guest, François Masquelier, for a complete session on the treasury fundamentals for 2023.

In this article, we will take you through:

  • Trends in currency management to watch out for in 2023
  • How to drive better currency management
  • Technology and tools to optimize FX risk management

Setting the scene for 2023

Let’s analyse what upcoming currency management trends are going to be the main focus for treasurers this year.

Challenges and opportunities in currency management

When we take a look at recent European Treasury surveys, the PwC global annual survey and the last OECD survey or surveys, there is a common theme regarding the main focus for treasurers this year.

FX risk management is a top priority for corporate treasurers from 2023 onwards, right behind cash flow forecasting and digital transformation. This means that FX risk remains highly ranked by treasurers, and there are several reasons for this.

  1. First, the FX rate is highly volatile. And we saw this volatility in the last couple of months or years with COVID, the war in Ukraine, etc. It does not seem like this is going to shift towards decreasing market volatility for FX currencies. Interest rates are important due to swap points, differential interest and commodities.
    CFOs need to protect operating margins as currency movements can affect them, thus, solid and efficient hedging strategies and tools are necessary. Despite this, corporate treasurers focus on manual processes, as automation is lacking.
  2. Another key factor for the importance of FX risk is digital transformation. CFO and treasurers are shifting their traditional mindset to consider the implementation of new financial tools and technology.
    And this is mainly because they have started to realise that automation and digitization could be a way to reduce that risk or, at the very least, to improve the management of said FX risk.
  3. Finally, last but not least is cash flow forecasting. It has been a top priority for a couple of years now; for 2023, it should remain a top priority. And again, for the same reason, because we live in a world of uncertainty.
    So finance professionals need to make sure that they have accurate data and accurate forecasts. Otherwise, it would be difficult to manage your FX risk properly.

Large interest rate differentials

Sometimes CFOs do not always understand all the possibilities in terms of what we call optimizing forward points, that is to say, interest rate differentials.

The forward points may be a concern when there is a significant differential of interest, especially with exotic currencies. So it could be expensive to hedge certain currency pairs, depending on which side you are in. Sometimes those forward points could be in your favour, and sometimes could not be in your favour.

Treasurers with a favourable interest rate differential can decide not to hedge at all and just monitor the exposure. This is feasible, but as it is a highly manual task, the monitoring process of the open exposure can become quite tedious and inefficient.

However, the good news is that there exist certain solutions that allow them to dynamically manage your FX exposure. This way, finance professionals can reduce or mitigate the impact of the swap points and, ultimately, reduce the impact on costs.

The multicurrency world

The dollar and the euro remain important currencies, but there is a number of currencies from smaller but well-managed economies gaining ground.

As corporate treasurers are taking advantage of the benefits of buying and selling in more currencies, there is a microeconomic and bottom-up phenomenon leading to that multi-currency world.

Using the more exotic or smaller currencies, if managed properly, can protect your company against risks. The best approach to currency management this year is to use the most profitable currencies all the time.

Better currency management is possible

You can prepare for these trends if you have a strong currency management system that covers the entire FX workflow and allows you to have clear visibility over your exposure. Take a look at the two main areas that could be affecting your currency management strategy.

Accurate cashflow forecasting, or not?

Sometimes the importance of having accurate cashflow forecasts is somewhat overstated when it comes to currency management.

Let’s take the example of a micro-hedging program for firm sales or purchase orders. The exposure to hedge is already a contractually binding item, not a forecast at all. So we don’t have really much of an issue.

On the other hand, if you take the case of a layering program or layered hedging program, the FX rate would be built in advance, so the forecasted exposure to hedges is also known well in advance.

And finally, thanks to conditional orders that protect a budget rate, the Treasury team can have time to update and finetune their cashflows.

Fewer silos, better treasury

At Kantox, we believe that currency management is more than just currency risk management, and that currency risk management, in turn, is more than just the instant execution of a hedge.

But that requires a holistic approach to currency management, to cover the entire FX workflow.  This means doing away with a siloed approach that allows the company to grow beyond imagination.

In treasury and finance, there are many silos that impact the optimal management of the department. Having clear communication and flow of information with other departments is vital. It provides better visibility of the exposure and gives the CFOs the ability to react to the volatility in the market faster.

Something key in the challenging context we are facing that impacts the very thin operating margins, and a great way to generate added value to the treasury function.

One clear example of this is the companies with subsidiaries that operate in foreign currencies. By offering the subsidiaries to invoice or be invoiced in the local currencies, you are centralising the FX risk, generating value for them and improving risk management.

Another example of tearing down the silos in treasury management is the relationship between the commercial and finance teams. They don’t always see eye to eye, but providing commercial teams with the FX rate they need in real-time is a good way of eliminating that silo mentality.

As consultants from McKinsey said, the early adopters who drive cross-functional teamwork are going to reap the benefits and see a great increase in annual revenue growth.

Technology to optimize your currency management

Now that you know where to focus on improving your currency management, consider what tools could streamline this. But don’t forget to analyse if the current process is hurting you more before implementing new technology. Consider what areas of your FX workflow need revamping.

TMS lack visibility

One of the main pain points for CFOs is not having access to real-time data and dashboards that reflect the current state of the company’s financials. This makes it more difficult for them to make the right decisions on time.

There are tools, like the TMS, that are used in the treasury function with the objective of getting summarized information and reports but they are not properly fit for decision making at the C-level.

They lack dashboards fed with real-time data that would make it easier or facilitate the communication between Treasury and the C-suite. TMS have a few other shortcomings when it comes to currency management.

“Often a CFO is a car driver who does not see his/her dashboard immediately but with delay” – François Masquelier

When pricing with an FX rate, using the forward rate instead of the spot rate can help companies in certain situations improve their competitive position without hurting their budgeted profit margins.

But most TMS lack a strong FX rate feeder, meaning the possibility of providing commercial teams with the appropriate rate -a spot, or the two-month or the six-month forward rate, the pricing markups for a client segment-

Another problem with TMS is that the functionalities in the report are standard and not really customer variables. They are more of like pret-a-porter solution.

When we talk about the reporting and development of specific functionality, treasurers must find a way to fulfil these gaps and find the missing pieces.

This means that in the pre-trade phase of the FX workflow, TMS is not covering the needs of treasurers and CFOs.

AI, the future of treasury?

ChatGPT is all the rage right now, AI or artificial intelligence is making a comeback. But is it going to be the future in terms of treasury management and cashflow forecasting?

AI could play a role in the future of treasury management. However, we are still in the early days and there are many other ways CFOs and treasurers can start the digitization of the treasury function before resorting to AI.

There are some things that need to change in the way treasury is done and the approach of many finance professionals to the treasury tech stack. Those in charge of managing currencies need to be comfortable with their IT skills to make good use of new technology.

Another hurdle to the implementation of AI in treasury is the lack of access to comprehensive and immediate data. And finally, the inefficiency of highly manual processes when relying on spreadsheets for currency management. All of this takes away from producing accurate cashflow forecasts on foreign currencies.

Moving forward

As we have seen, there are many challenges to currency management that CFOs and treasurers will need to be well prepared for this year.

As interest rate differentials rise and the volatility in FX markets continues, there needs to be a good currency management system to handle the FX risk.

With the help of automation tools, finance professionals will be able to eliminate the silos that hinder the company’s growth and increase visibility over open exposure.

Download now our Currency Management Priorities for 2023 report to learn more about upcoming focus for treasurers and get your currency management strategy ready.

AP, AR & Treasury- Creating Harmony to Control Your Cash Conversion Cycle

21-02-2023 | treasuryXL | TIS | LinkedIn |

Technology is now offering companies of all sizes unprecedented visibility into all accounts payable and accounts receivable and bank account activity to better predict and understand all cash flows. This visibility offers companies the ability to manage accounts payable, accounts receivable and treasury in harmony, not in silos, to optimize their cash conversion cycles.


We will share specific opportunities to leverage AP & AR related business intelligence at your company to impact your company’s bottom line, identify specific opportunities to take more ownership of how and when you make payments, and how and when you get paid, and understand the current and emerging role of automation and APIs in helping companies to take more control of their cash conversion cycles.
Join us to discover insights and specific advice to:
  • Create 360-degree visibility relative to AP and AR related activities and processes
  • Identify and understand drivers of all cash movements
  • Remove silos in AP, AR, and Treasury
  • Improve supplier and customer interactions to empower more control of payments & receipts * Leverage technology to facilitate collaboration between AP, AR and Treasury