Tag Archive for: corporate treasury

BEPS and its impact on Corporate Treasury

| 25-01-2018 | treasuryXL |

The BEPS (base erosion and profit shifting) initiative is an OECD initiative, approved by the G20, to identify over a period to December 2015, ways of providing more standardised tax rules globally. Phases two and three involve implementation and monitoring (together with some remaining standard setting and clarification). BEPS is a term used to describe tax planning strategies that rely on mismatches and gaps that exist between the tax rules of different jurisdictions, to minimise the corporation tax that is payable overall, by either making tax profits “disappear” or shift profits to low tax operations where there is little or no genuine activity. In general BEPS strategies are not illegal; rather they take advantage of different tax rules operating in different jurisdictions, which may not be suited to the current global and digital business environment.

Impact

Many large companies have developed funding and cash distribution strategies around tax regulations. The Netherlands is specifically known for its activity in Trust Offices. The changes envisaged by BEPS could result in the corporate structure of a company being deemed invalid. Many large international companies have Dutch registered offices whilst no physical work is done within the Netherlands.

It is not uncommon to see intercompany financing being structured purely to avail itself to the current tax regimes and advantages within different countries. Interest is a cost and is deductible against tax in many places. Structures have been put into place where a company arranges for interest to be paid at a company within a high tax regime, whilst the interest is received in a country with a low tax regime. BEPS has been designed to tackle this sort of situation.

Companies will now have to submit detailed reports on their holdings and representations on a country by country basis. Such reports will assist the tax authorities in better understanding how the global operations of a company are performed. This should lead to greater clarity on the transfer pricing policy being used by companies.

Companies need to review and outline their existing structures and investigate what the changes and impact will be once BEPS is initiated. It is quite conceivable that certain operations will be seen as not meeting the new criteria – leading to a change in the existing company strategy. This could lead to disadvantageous results, such as increases in the weighted average cost of capital that a company reports, which could affect its share price.

This means action has to be undertaken and this could lead to significant changes within some treasury departments.

 

If you want more information please feel free to contact us via email [email protected]

Financieringsstructuur: solide fundament of kaartenhuis?

| 12-01-2018 | Bianca van Zeventer |

Leningen worden vaak gezien als een goede manier om lange termijn investeringen te financieren. Een (gecommitteerde) meerjarige lening levert veelal zekerheid voor de middellange termijn. “Voor meerdere jaren vastgelegd” blijkt in de praktijk vaak niet waar te zijn. Leningen worden afgesloten als een aanvullende vorm van financieren, naast rekening courant, lease en/of andere leningen. Hoewel het aangaan van de meerjarige financiering ‘an sich’ niet heel risicovol hoeft te zijn, zijn de voorwaarden dit soms wel.

Elke vorm van financiering heeft zijn eigen voorwaarden. Aan de verschillende leningen worden specifieke voorwaarden toegevoegd. En dan zijn er nog de algemene (bank)voorwaarden.
Veel bedrijven nemen onterecht aan dat dit ‘standaardvoorwaarden’ zijn en er maar beperkte onderhandelingsruimte is.

De voorwaarden van de verschillende arrangementen spreken elkaar vaak tegen, zijn niet zoals beoogd en/of dienen niet het doel en het belang de onderneming.

Financiering in welke vorm dan ook blijkt vaak een kaartenhuis. In plaats van mooi gestapeld, zijn de arrangementen een domino met de eerste steen in handen van de kredietverlener.

Wanneer uw onderneming onverhoopt in zwaarder weer terecht komt, dan is het belangrijk dat het staat op een solide financieel fundament.
Voorkomen is beter dan genezen geldt hier ook. Beter vooral goed uit-onderhandeld dan later de financiering amenderen of herstructureren. Of zelfs geen keuze meer hebben. Uw bank of financier eenzijdig de mogelijkheid geven alle financieringen te herroepen of betaalbaar te stellen, biedt geen financiële stabiliteit.

Maar vaak blijken de verschillende voorwaarden zodanig in elk kaar te grijpen, dat dit wel het geval is.

Een FlexTreasurer met gespecialiseerde financieringskennis, kan u helpen een snelle scan te maken van uw financieringsstructuur, aanbevelingen doen voor aanpassingen en/of financieringsarrangementen namens u of samen met u (her)onderhandelen.

 

Bianca van Zeventer

Treasury and Finance Specialist / Owner of CuCoFin

 

 

MEER INFORMATIE

Wil je meer weten of iets anders over de diensten van Flex Treasurer of heb je een andere vraag?
Pieter de Kiewit helpt je graag verder.

 

This is why corporate treasury is great – The laymen introduction to corporate treasury

| 09-01-2018 | Pieter de Kiewit |

My father was a civil engineer and would have liked one of his kids to follow in his footsteps. Regretfully for him we all went in different directions, me landing an engineering degree of the wrong type. What I did like to learn from my first business management professor was about creating bridges between various functional areas. That is what I have been doing as a recruiter for almost 25 years, the last 8 solely in corporate treasury. Why treasury?

All organisations, even the small ones, can benefit from good treasury. Only the bigger ones hired permanent experts. The main three areas, perhaps oversimplified, they focus on are:

  1. Money logistics: opening and closing bank accounts, doing (bulk) payments, forecast money coming in and going out;
  2. Managing (treasury) risk: understand and manage the implications of interest or currency fluctuations. If your manufacturing costs are in Euro and you sell in Dollars and the price of the Dollar drops, what to do? What to do if you have excess cash on your current account;
  3. Funding: where do you get your money for new or current business? Bank loans, equity, mortgage, leasing?

This does not sound sexy, does it? But do understand that during the crisis treasurers found solutions for companies how to survive. They found funding to pay salaries, helped sales finding creative funding solutions to make complex transactions achievable, helped prevent companies going belly-up due to currency exposures, forced banks to offer better solutions at a more acceptable price.

Treasurers manage huge amounts of money and operate very close to the CFO. They are involved in mergers & acquisitions, reorganisations and international expansion. They act in small numbers but have huge impact if they would stop doing their work. And the job type evolves continuously. Creating new treasury bridges to traditional job types like accounting, tax, sales helps all doing a better job. The academic world is showing increasing interest. In the Netherlands the post graduate education at the Vrije Universiteit is becoming more prominent in the treasury community. Corporate treasury is very dynamic!

What I love doing is helping CFO’s, HR, internal recruitment and senior treasury managers with their staffing questions. What qualifications and personality type matches best with your current and future business situation. If you only hire one treasurer per year, what do you need to know to choose the best candidate? I hope now you can understand my passion for creating bridges in treasury and recruitment.

I look forward to your thoughts to the above and further contact,

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Who to choose: A generalist or a specialist?

| 11-12-2017 | Olivier Werlingshoff |

 

During the last few months this question has been on top of my mind. Is it better to specialize yourself and start a specific study?
First, we need to look at the definitions of both; a specialist is a person who is highly skilled in a specific and restricted field. A generalist is a person who is competent in several different fields or activities.

On LinkedIn you can find the 6 differences between a generalist and a specialist by “Han van Kasteren”.

 

I will mention a few:

  • Generalist can be more confronting; because they are sometimes not very familiar with procedures and will ask “strange and stupid” questions to understand the business,
  • A generalist will often use the Why question to understand the business,
  • Because a generalist is not stuck in a specific field, he can be more creative and can apply examples previously used in other fields.

But I also thought of two other differences which I would like to share with you:

  • A generalist can make an easier connection between the specific field and other departments because they are more familiar with the different other departments in a company
  • Because a generalist looks also to other departments they became more competent in selling internally their problem or their challenge to find a solution

Now I have mentioned a few bullet points I found on the internet, when can a generalist interim Treasurer be a good choice?

I would say especially in the field of cash management and working capital they could be a good choice. Both specialties have effect on different departments of the business to mention a few; controlling, sales department, procurement, tax and legal.

During my career I talked with a lot of CFO’s and financial managers of large companies and tried to understand their challenges and to help them achieve their goals. As treasurer I had my own challenges and tried to make links with other departments to achieve my goals.

I am a generalist with a passion for cash management optimization!

Olivier Werlingshoff - editor treasuryXL

 

Olivier Werlingshoff

Owner of Werfiad

 

TIS (Treasury Intelligence Solutions) at the DACT Treasury Fair

| 22-11-2017 | treasuryXL | TIS Treasury Intelligence Solutions |

The DACT (Dutch association of Corporate Treasurers) will be holding their annual Treasury Fair in Noordwijk at the Hotel van Orange on 23rd and 24th November 2017 – the most important annual treasury event in the Netherlands. Discover treasury best practices, learn about the latest trends and exchange experiences. It will contain 9 practical workshops spread out throughout the day on topics including, among others, trade finance, supply chain finance, liquidity forecasting, cyber security and the Blockchain. There are more than 50 exhibitors present at the Trade Fair including Treasury Intelligence Solutions GmbH- a partner of treasuryXL.

Company Profile

TIS is the leading cloud platform for managing corporate payments, liquidity and banking relationships worldwide. The company delivers SMART PAYMENTS to help customers make BETTER DECISIONS. TIS enable companies to make more efficient, more secure and more cost-effective payment transactions. In addition, TIS enables customers to make better decisions when analysing financial and operational performance based on real-time payment flows. All mission-critical processes related to payment transactions are integrated into a multibank-capable, audit-proof cloud platform. This is a single point of contact for enterprise customers when managing and analysing their payment flows across the organisation. TIS take care of managing various payment formats, communication channels with banks, and ERP-agnostic integration. Offered as Software as a Service (SaaS), the ISO certified TIS solutions are quickly up and running without the complexity and cost of a long IT project.

If you are at the Treasury Fair, please take your time to visit their stand and mention treasuryXL.

Last week TIS raised $12 million in additional financing from international VC firm 83North. Read more on their website

This is TIS’s own announcement on their website announcing their participation.

We wish TIS success at the DACT Treasury Fair!!

If you want to find out more about TIS and their services and products please refer to their company profile on treasuryXL.

Het Treasury statuut als beheersinstrument voor woningcorporaties

| 21-11-2017 | Roger Boxman |

Het onderstaande korte artikel gaat in op de eisen van het  Treasury statuut. In een Treasury statuut wordt aangegeven wat het doel van de Treasuryfunctie is van de organisatie en in welke producten mag worden belegd en op welke wijze op hoofdlijnen gelden worden aangetrokken. Na het Vestia debacle, waarbij derivaten speculatief werden ingezet, heeft de overheid de wetgeving aangescherpt voor woningcorporaties. Een van de eisen is dat woningcorporaties verplicht een Treasury statuut moeten opstellen.

Treasury Commissie

De Woningwet 2015 verplicht om woningcorporaties een Treasury statuut op te stellen.  In de sociale woningsector zijn de circa 2,4 miljoen sociale huurwoningen gefinancierd met  € 88 miljard.  Het  Treasurystatuut geeft aan wat de lange termijn richtlijnen zijn met betrekking tot de treasuryfunctie en wordt mimimaal om de drie jaar geactualiseerd. Er wordt een Treasury commissie ingesteld als adviesorgaan van het bestuur.  . Hier kunnen externe partijen van deel uit maken mits deze onafhankelijk zijn. De Treasurycommissie adviseert het bestuur gevraagd en ongevraagd over de uit te voeren transacties en overige treasuryvraagstukken. Het bestuur neemt deel aan de Treasurycommissie in de hoedanigheid van toehoorder.

Treasury jaarplan

Het treasuryjaarplan wordt afzonderlijk opgesteld en is een onderdeel van de (meerjaren)begroting. Dit plan bevat het beleid, de doelstellingen, het mandaat en de treasury taken voor het komende jaar, waarbij rekening wordt gehouden met het in het Treasury Statuut geformuleerde beleidskader en een risico beheersingsparagraaf. In het treasuryjaarplan worden o.a. de volgende zaken vastgelegd: liquiditeitsplanning, bestaande renterisico en de uit te voeren treasury activiteiten.

Risicomanagement

De belangrijkste risico’s die gemanaged worden zijn het beschikbaarheidsrisico, liquiditeitsrisico en renterisico en in mindere mate het tegenpartijrisico. Het Treasurystatuut bevat bepalingen over uitgezette gelden per tegenpartij met limieten. Veelal wordt voor het renterisico een maximum van 15% van de leningen aangegeven waarover een renteherziening worden toegepast.

Samenvatting

Bovenstaande is een summiere opsomming van alle eisen die aan een Treasury statuut bij een woningcorporatie gesteld worden. De wetgever heeft een model Treasurystatuut dat tientallen pagina’s beslaat. Belangrijk is te beseffen dat er beperkingen aan de Treasuryfunctie worden gesteld en dat er formeel een mandaat is vastgesteld waarbinnen de Treasurer dient te opereren en zich te verantwoorden.

Roger Boxman

Senior Advisor Internal Control

 

How does liquidity forecasting accelerate growth: Cashforce @ DACT Treasury Fair

| 17-11-2017 | treasuryXL | Cashforce |

DACTThe DACT (Dutch association of Corporate Treasurers) will be holding their annual Treasury Fair in Noordwijk at the Hotel van Orange on 23rd and 24th November 2017 – the most important annual treasury event in the Netherlands. Discover treasury best practices, learn about the latest trends and exchange experiences. It will contain 9 practical workshops throughout the day on topics including,  trade finance, supply chain finance, liquidity forecasting, cyber security and the Blockchain. There are more than 50 exhibitors present at the Trade Fair including Cashforce – a partner of treasuryXL, who are also presenting a Workshop.

Company Profile

Cashforce is an innovative Cash & Treasury Management System, focused on automation and integration. As a ‘next-generation’ Cash management solution, Cashforce helps finance/treasury departments save time and money by offering accurate cash flow forecasting, flexible treasury reporting & automation.Cashforce is unique in its category, because it allows users to drill down to the transaction level details and the system integrates seamlessly with ERP systems & banking systems. In addition, an intelligent simulation engine enables companies to consider multiple cash flow scenarios and measure their impact. As a result, finance / treasury departments can be turned into business catalysts for cash generation opportunities throughout the company.

Workshop

Cashforce will be co-presenting a Workshop at 13:45, entitled How does Liquidity forecasting accelerate growth and what’s the role of the treasurer

The 2017 Global Treasury Benchmark Survey from PwC shows that companies worldwide hold a staggering $ 1.1 trillion (!) of excess liquidity in their business operations. These hidden liquidities can be tracked by an accurate and automated cash management and forecasting process. These can then be used to lower the company’s working capital or to realise additional growth.

Setting up an automated cash management & forecasting process has at last been made possible as a result of technological progress. Currently, 87% of treasurers still use manual spreadsheets. However, this process can be organised much more efficiently.

To demonstrate how this can be achieved, this workshop sets out the challenges of accurate cash flow forecasting, supported by a case study presented by the Interfood Group.

With $ 1.4 billion in annual revenue, Interfood is one of the leading global dairy traders and suppliers. Through 15 global offices worldwide, Interfood distributes over 800,000 MT of dairy products a year. Together with Cashforce, Interfood has set up an automated cash forecasting process. The case will be presented by Vincent Almering (Finance Director Interfood B.V.). Vincent has led the project from start to finish and acts as the key lynchpin for the different users (Traders / Treasury / Finance / CFO). Vincent will share the challenges and benefits of cash flow forecasting as well as his experiences. Finally, there will be a discussion on the main lessons learned, aimed at treasurers who are looking for a solution for an automated and accurate cash forecasting process.

Speakers: Vincent Almering, Financial Director Interfood B.V. – Nicolas Christiaen, CEO Cashforce. Moderator: Martijn Duijnstee, Manager Business Development Cashforce NL

Language: Dutch

If you are at the Treasury Fair, please take your time to visit their stand and mention treasuryXL.

We wish Cashforce success at the DACT Treasury Fair!!

If you want to find out more about Cashforce and their services and products please refer to their company profile on treasuryXL.

Tipco at the DACT Treasury Fair

| 15-11-2017 | treasuryXL | TIPCO Treasury Technology GmbH |

The DACT (Dutch association of Corporate Treasurers) will be holding their annual Treasury Fair in Noordwijk at the Hotel van Orange on 23rd and 24th November 2017 – the most important annual treasury event in the Netherlands. Discover treasury best practices, learn about the latest trends and exchange experiences. It will contain 9 practical workshops spread out throughout the day on topics including, among others, trade finance, supply chain finance, liquidity forecasting, cyber security and the Blockchain. There are more than 50 exhibitors present at the Trade Fair including Tipco Treasury & Technology GmbH- a partner of treasuryXL.

Company Profile

Treasury Reporting at the push of a button! TIPCO is the leading expert for treasury reporting in Germany, Switzerland and Austria. We develop customised solutions for our clients that are fast, flexible and easy to use. Our software TIP is a web-based application containing a diverse range of modules to support everyday reporting needs: Banking Account Administration, Financial Status, Liquidity Planning, Risk Management, Bank Fee Controlling, Compliance & Reporting and our Survey Tool.

With these modules, our clients can overcome problems created by heterogeneous system landscapes and find an easy way to communicate with their subsidiaries. Furthermore TIP is able to use existing data and avoids manual data input where it is not necessary. Huge amounts of data can be interpreted in seconds and reports are available by the push of a button. As a spin-off of the Austrian treasury consulting firm Schwabe, Ley & Greiner TIPCO unites treasury expertise with business intelligence competence.

Due to this unique combination, we are able to realise our projects with a holistic view and to the complete satisfaction of our clients.

If you are at the Treasury Fair, please take your time to visit their stand and mention treasuryXL.

This is Tipco’s own message via LinkedIn announcing their participation.

We wish Tipco success at the DACT Treasury Fair!!

If you want to find out more about TIPCO and their services and products please refer to their company profile on treasuryXL.

The size and shape of your treasury team

| 09-11-2017 | Pieter de Kiewit |

Treasury TeamLast week I received a call from one of my clients. Over the last years, I found several members for their team. Given the transition they are in, they were looking for benchmark information to shape their treasury team and make it future proof. This has kept me thinking and I started gathering information in order to give a proper answer. As to be expected, there is no standard template resulting in an easy answer. Even for more evolved job types like sales or accounting this is a hard question, corporate treasury is too young and small for sound statistics.

To make my analysis workable, I decided to measure the size of the team in a straightforward headcount. When talking about shape, I would like to work with the main functional areas: cash management, risk management, corporate finance and support. Of course this is an oversimplification. I think the following variables are the most relevant.

To start with the obvious: size matters. Size in revenue, number of employees, number of countries active in, number of currencies used, number of payments are all related to size of the treasury team. Not 100%. Senior management requesting detailed and up-to-date information requires a bigger team. We see this especially with organizations in turbulent situations, internally or in dynamic markets. Treasury teams that recently started, do not yet have a focus on efficiency and tend to be bigger. The willingness to invest in modern IT solutions on one hand creates a bigger team: key users and treasury IT managers, on the other hand it replaces staff doing manual work.  Finally improving aspects like segregation of duties and back-up typically create a bigger team.

Moving forward to the shape of the treasury team or perhaps the size of the various functional areas, I observe that the industry and company status have their impact. Typically, companies with a dynamic balance sheet, due to distress or growth (autonomous or take overs) need a bigger corporate finance function. A longer balance sheet in a capital intense industry requires a bigger team. In this area I also see an increase in project and customer finance teams contributing in the structuring of business deals.

Companies with diverse and dynamic payment flows need bigger cash management teams. Especially corporates with an ambition towards strong centralization require extra central staff. They need stronger software support, communicate a lot with subsidiaries and have to understand the business. If achieved, central cash management can be managed by few.

I observe a decrease of number of staff working in FX and interest risk management. Corporates are more risk averse, markets are transparent and ICT enables STP processes. In parallel other types of risk increase the workload: counter party, commodities, insurance, etcetera. Big data and business modeling is having its impact.

This blog does not have the ambition to be comprehensive, the above could be more thorough. Furthermore I could elaborate on aspects like control, IT and especially back office and settlements. Should they even be in your treasury team? I think the topic deserves further attention and could be researched by more than one graduate student.

What are your thoughts? What obvious aspect should be included? I look forward to your reactions,

Pieter de Kiewit

 

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

How to connect to your bank electronically

| 26-10-2017 | François de Witte |

One of the main challenges in treasury is ensuring the connectivity with your banking partners. Currently corporates use the e-banking, or “electronic banking” channels. ‘Electronic banking’ can be defined as the way in which a company can transmit transactions and obtain reporting instructions to a bank remotely and electronically.

In the present article about bank connectivity, we will outline the current types of e-banking channels in the market, their advantages and the attention points.

Interactive banking channels

For interactive e-banking channels, typically the communication is initiated by the corporate client from a PC within the finance department and the instructions are transmitted to the bank through the internet.

Banks are developing their portals more and more: ING Business Payment, Connexis, KBC-Online, IT Line, RABO Corporate Connect, etc. They also provide a full range of services through them.

Illustration of the interactive electronic banking channel:

 

 

 

 

 

 

 

Currently the interactive- banking channels are widely used by corporates and other organizations, because they are easy to implement, user-friendly, enable to work on a standalone basis and less expensive. However, the drawbacks are that they are not always that suited for mass payments, and that each bank has its own system. Consequently, if you work with different banks, you will have different electronic banking channels for each bank, which adds to the complexity.

In some countries, the banks have put their efforts together to create a multibank interactive electronic banking channels (e.g. Isabel 6 in Belgium and Multiline in Luxembourg).

In my view, the interactive e-banking channel is best suited for corporates having not too high volumes of transactions and working with only few banks, or in countries were multibank electronic banking channels are available.

Host to host electronic banking channels

Some corporates or public institutions have very high volumes to treat, and will need for this a specific direct connection with their bank, a so-called “host to host” (H2H) connection. This is an automated solution for high volume data transfer between banks and their corporate clients.

Sophisticated H2H connectivity solutions give banks the flexibility to exchange information with their corporate clients in preferred file formats, agreeing on network protocols, and security standards.

The following figure illustrates this type of e-channel:

 

 

 

 

 

 

 

H2H e-banking channels allows for automated payments and collections, attended (where the client needs to take an action) or unattended (directly initiated by the IT system) connection / authorization. They can treat very high volumes, and to integrate the data into ERP systems.

However, they are also more expensive, because they require a specific IT set-up and usually the services of a middleware provider to ensure the connectivity between your ERP or IT system and the bank.

Up to some years ago, corporates had to set up H2H connections with each of their banks, but now several multibank H2H solutions have been developed by the TMS (Treasury Management Systems) providers or by other multibank providers such as TIS, MultiCash and Power2Pay.

In some countries, the banks have set up common interbank protocols enabling an easier and standardized connection. The best know is EBICS, which is currently in use in Germany and France.

In my view, the host to host banking e-channel is best suited for corporates having very large volumes of transactions and requiring a high level of integration with their ERP or IT systems.

SWIFT e-banking

SWIFT has extended from a bank-to-bank platform to a corporate-to-bank platform, and has also launched its own bank connectivity solution, SCORE (Standardized Corporate Environment). SWIFT enables hence to replace the various e-banking systems with a single, bank-neutral multibank e-channel. This means that treasurers and finance managers can connect with their banks worldwide in a consistent way using industry-recognized standards.

Outline of a SWIFTNET Multibank set-up (source SWIFT):

Companies can connect to SWIFT in many ways. One option is to establish a direct connection to SWIFT, but this can be a technically complex exercise. As a result, many of the companies connecting to SWIFT do so via a SWIFT service bureau. In such a set-up, most of the technical challenges are resolved by the service bureau

The third SWIFT connectivity option is Alliance Lite2. This solution enables corporates to connect to SWIFT in a quicker and less expensive way.

The SWIFT channel offers, beside the multibank character, many other advantages, such as the SWIFT standards, services beyond payments, such as FX and deposit confirmation and securities transactions, and an improved security / reliability compared to the classic e-banking systems

However, the Swift e-banking solution is not easy to implement, and can be quite expensive (in particular for the direct connection and the connection through a service bureau. Hence this solution is more suite for very large corporates and institutions, working with many banks.

Conclusion:

When looking at setting up the e-banking connectivity, several factors need to be taken into consideration, such as the number of banks and transactions, the complexity of the organization and the treasury. Smaller organization can perfectly work with the interactive e-banking channels, whilst larger and more complex organizations need to consider the multibank H2H connections or a SWIFT setup.

In the framework of PSD2, with the XS2A (access to accounts), banks in the EU/EEA will have to provide access to authorized third parties. I expect that thanks to PSD2 the cost of multibank e-banking platforms will go down, which is good news for corporates.

 

François de Witte

Founder & Senior Consultant at FDW Consult