Tag Archive for: corporate treasury

Een parttime CFO – parallellen met de Flex Treasurer

| 29-6-2017 | CFO netwerk | treasuryXL |

CFO netwerk biedt (parttime) CFO diensten aan ondernemingen, waarvan aard en omvang van de activiteiten de fulltime inzet van een CFO niet rechtvaardigen. Wat dat betreft herkennen wij parallellen met onze Flex Treasurer, die wij op treasuryXL aanbieden aan ondernemingen, die wel treasury exposure hebben, maar geen ruimte om een fulltime treasurer of cash manager in dienst te nemen. We waren in gesprek met Jeffrey Janssen van CFO netwerk en hebben de parallellen voor u uitgewerkt.

CFO op maat

Wat is de toegevoegde waarde van een CFO voor een onderneming?

Veel jonge en kleine bedrijven hebben vaak niet de financiële mogelijkheden om een ervaren CFO in dienst te nemen. In deze situatie is wellicht een parttime CFO een goede oplossing. Een ervaren professional met commitment die u voor een beperkt aantal uren inhuurt, maar toch de vinger aan de pols houdt en indien nodig 24/7 voor u beschikbaar is.

Maar waar u als ondernemer ook bent in de levenscyclus van uw bedrijf, het goed functioneren van uw financiële afdeling is van groot belang en zij hoort u tijdig te informeren over strategische, financiële vragen die van belang zijn voor het voortbestaan van uw bedrijf. Daarbij gaat het niet alleen over cijfers, maar ook over een sterke CFO, die u uitdaagt en als business partner optreedt bij de bepaling van de strategie en volgens een strakke CFO-agenda de groei van uw bedrijf ondersteunt.

Uw bedrijf groeit

U werkt hard en investeert. Het bedrijf groeit en alles gaat eigenlijk beter dan verwacht. Of toch niet? Er ontstaan groeistuipen en er worden veel ad-hoc beslissingen genomen om de voortrazende trein op het rechte spoor te houden. In deze fase kunnen grote fouten worden gemaakt die de continuïteit in gevaar brengen. De belangrijkste hiervan is dat het strategische plan niet wordt gevolgd en dat dit plan niet regelmatig wordt geëvalueerd en aangepast.  Aspecten die in deze fase van groot belang zijn:

  • Het hebben van juiste en tijdige stuurinformatie (ook wel KPI’s genoemd)
  • De kwaliteit van de organisatie (juiste mensen, juiste skills) De administratieve systemen en procedures. Zijn deze nog adequaat en kunnen ze de groei aan?
  • Is er voldoende cashflow aanwezig om de continuïteit te waarborgen?

Succesvol en nu verder…

Alle bedrijfsprocessen zijn goed ingericht – het gaat heel goed met uw bedrijf. De resultaten zijn uitstekend, maar blijft dat zo? Indien u niet bezig bent met nieuwe innovaties, oog hebt voor de veranderingen in de markt loopt u het risico dat uw groei gaat stagneren en te laat uw organisatie hierop aanpast. Ook dan moet U keuzes maken die ingrijpend zijn en een weerslag hebben op mensen en systemen. In deze fase is het cruciaal dat u de continuïteit van het bedrijf centraal stelt en het bedrijf robuust maakt voor de toekomst.  Ook hier is het de taak van de CFO om dit spanningsveld te bewaken en u tijdig te helpen in uw besluitvorming.

Ups and downs

Iedere onderneming komt ze vroeger of later tegen. Door te weinig innovatie streven uw concurrenten u voorbij. De resultaten lopen opeens terug. Uw bankiers komen vaker langs en aandeelhouders zijn niet tevreden en eisen veranderingen. U bent het grootste deel van uw tijd kwijt aan het managen van uw liquiditeit en het sussen van aandeelhouders en personeel. Zorg dat u in deze fase de juiste mensen binnenhaalt om het tij te keren, dan wel te zorgen dat keuzes worden gemaakt. Dit kan van levensbelang zijn om een faillissement te voorkomen.

Wat kan een CFO betekenen?

Een krachtige CFO is een sparringpartner die u als ondernemer in iedere bedrijfsfase ontzorgt en uw financiële continuïteit bewaakt. Hij of zij is onder meer verantwoordelijk voor de financiële systemen en processen, de stuurinformatie en de contacten met financiers en accountant. Maar bovenal moet hij als financiële business partner onderdeel zijn van uw team en mede sturing geven aan de strategische agenda van uw onderneming. Een onderneming kan niet functioneren zonder een goede CFO in het hart van uw organisatie.

Een Flex Treasurer als ondersteuning voor de CFO

We merken dagelijks dat treasury iets is waar CFO’s en Controllers er vaak te weinig tijd voor hebben en/of niet altijd de noodzakelijke kennis. HR managers en directeuren bemoeien zich er liever niet mee.

Ook hier hetzelfde beeld: de meeste organisaties zijn niet groot genoeg om een treasury-afdeling te huisvesten maar dat betekent niet dat deze organisaties geen kosten kunnen besparen of dat er geen mogelijkheden zijn voor bijvoorbeeld funding. Om de treasury van uw organisatie onder controle te hebben is het niet altijd nodig om er een complete afdeling van te maken.

Een ervaren hands-on treasurer kan een eerste check doen binnen de organisatie om te bepalen of het de moeite waard is om te investeren in treasury. Door optimalisatie van interne processen, het beter beheren van banken en bankkosten of het opnieuw organiseren van FX processen kan vaak een substantiële besparing worden gerealiseerd.

Cash & liquidity management ondersteuning

Heeft u een goed overzicht van uw liquiditeitspositie? Is er geen versnipperde cash- en kredietbenutting? Bent u onlangs geconfronteerd met liquiditeitsproblemen t.g.v. onverwachte uitgaven? Wordt u regelmatig geconfronteerd met manuele verwerking van betalingen? Bent u recent geconfronteerd met fraudegevallen? Is het aantrekken van de financiering een issue?

Een treasury expert kan u helpen in het vinden van de juiste antwoorden op deze vragen. Een Flex Treasurer kan ondersteuning bieden op tijdelijke basis, onder meer voor de volgende aspecten:

Begeleiding opvolging liquiditeitspositie groep en uittekenen processen in dit verband
Assessment van het cash forecasting proces en voorstellen tot optimalisatie
Optimalisatie betalingsprocessen (incluis fraudepreventie)
Advies selectie bankpartners
Nazicht van de bankvoorwaarden
Bepalen van de optimale financieringsstrategie
Automatisatievoorstellen en begeleiding van de implementatie

Optimalisatie werkkapitaalverkeer

Kampt uw bedrijf met een DSO (gemiddelde betalingstermijn klanten) die veel hoger is dan het sectorgemiddelde? Heeft u een duidelijk afgelijnd acceptatieproces en een politiek voor de betaaltermijnen? Is je facturatieproces optimaal? Heeft u een afgelijnde politiek voor de selectie en de betalingstermijnen aan uw leveranciers? Heeft u regelmatig incassoproblemen? Kampt u met wanbetalingen en afschrijvingen op uw klantenportefeuille? Ondervindt u regelmatig reconciliatieproblemen bij binnenkomende en uitgaande betalingen?

Dan kan een Flex Treasurer, die treasury & working capital management expert is, u  helpen bij het vinden van de juiste antwoorden op deze vragen en het optimaliseren van uw werkkapitaalbeheer.

FX en IR risico analyse

Heeft u een goed zicht op de risico’s die je bedrijf oploopt (o.m. valuta en renterisico) en op de impact hiervan op uw bedrijf? Heeft u een politiek in  verband met de risicoafdekking? Heeft u een zicht op de mogelijkheden om ze in te dekken? Koerswijzigingen in valuta en rente kunnen zeer vluchtig zijn en leiden tot onnodige extra kosten. Als u zich wilt concentreren op uw ‘core business’, zonder u zorgen te hoeven maken over bv. de EUR/USD wisselkoers of de Europese rente dan is het inhuren van een Flex Treasurer de ideale uitkomst. Hij kan de organisatie helpen eenvoudig en effectief de risico’s af te dekken, alsmede te onderhandelen over betere spreidingen en lagere kosten bij uw bank.

Aangeboden diensten

Met  de verschillende CFO diensten van CFO Netwerk krijgt u het beste van beide werelden: de expertise van een ervaren CFO en op maat gemaakte uitbestede CFO diensten — tegen een prijs die u zich kunt veroorloven. De CFO-diensten zijn schaalbaar in de tijd. Dit betekent dat het niveau van ondersteuning geleverd wordt, dat u nodig hebt en wanneer u het nodig hebt.

Op treasuryXL bieden wij een Treasury Quick Scan aan, die beoogt de treasury-pijnpunten in kaart te brengen en de aanbevelingen om deze te verhelpen, inclusief de business case. Op basis daarvan kunt u bekijken of er voor verdere ondersteuning een treasury-expert voor uw organisatie zinvol is.
Daarnaast biedt treasuryXL ook treasury coaches aan. Treasurers werken vaak alleen of in een klein team en hebben ondersteuning nodig van andere (meer senior) treasury professionals. Vaak is deze ondersteuning niet aanwezig binnen het eigen team. In ons netwerk zitten een aantal senior professionals die deze ondersteuning op regelmatige basis kunnen bieden. Zij kunnen op regelmatige basis of incidenteel ingepland worden.

Mogelijke samenwerking

Omdat er duidelijk parallellen zijn tussen de diensten van CFO netwerk en treasuryXL en de diensten elkaar goed aanvullen, onderzoeken wij op dit moment of wij wellicht kunnen samenwerken. Het doel is om organisaties, die een financiële professional – parttime CFO of Flex Treasurer  – nodig hebben, als klant nog beter van dienst te zijn.

 

Bank Account Management – A Treasurer’s Guide

| 22-6-2017 | Treasury Intelligence Solutions GmbH (TIS) | Sponsored content |

Bank Account Managment knows many issues and the Guide of TIS reviews them,  lists best practices and various suggestions to improve the process at your organization.

Risk and liquidity management are top of mind for treasurers in today’s business climate highlighting the importance of bank accounts. They are necessary to pay, receive and store money and also to protect resources and facilitate treasury management. Companies must have at least one bank account, some have hundreds and a few require thousands of bank accounts to conduct their business. Bank accounts are also the means by which companies are connected to other businesses, people and the banks where the accounts are held. This makes the business of bank account management not only an important task but in the current hyper-connected environment of cybercrime, terrorism, fraud and tax evasion a mission critical function. Failure to properly manage bank accounts has the potential to cause material disruption or business failure for the account holders.

If you want to read more about this subject please click on in this whitepaper.

Treasury Intelligence Solutions GmbH (TIS)

Since 2010, Treasury Intelligence Solutions GmbH (TIS) has been combining their treasury management experience and know-how with their cloud computing and virtualisation expertise. The TIS solution is the result of these efforts: comprehensive, highly scalable and extremely secure SaaS solution to process, analyse and document all treasury management processes.

 

Succesful breakfast session at Proferus

|21-6-2017 | Proferus | treasuryXL | Sponsored content |

We reported earlier that Proferus BV, Amsterdam organised a breakfast session, the first of a series, dedicated to CFOs, Senior Cash Managers and Treasures, this time focusing on Cash Flow Forecasting. The session has taken place yesterday and we want to share a short impression with you.

In their first session Proferus focussed on sharing best practices aound the topics cash forecasting strategies, direct vs indirect approach, the need for cash flow forecasting and forecasting software from CashForce. Nicolas Christiaen,  founder of CashForce gave real life examples of how CashForce is deployed to help companies efficiently deploy cash force forecasting for treasury management.

During the meeting there was a livley discussion about the need of cash flow forecasts and the difference between the direct and indirect method. Ideas were shared as well as experiences and practical examples. The presentation of the cash forecasting system of Cashforce by Nicolas Christiaen was well received and very interesting.

The breakfast session had a good attendance and positive reactions! Proferus already started to plan and organize the next meeting!

If you want to know more about the breakfast session you can download their presentation: [button url=”https://www.treasuryxl.com/wp-content/uploads/2017/06/Presentatie-liquiditeitsplanningen-Proferus-1-2.pdf” text=”View presentation” size=”small” type=”primary” icon=”” external=”1″]

treasuryXL & Proferus BV

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How to get a fair deal on your derivatives trades

| 15-6-2017 | Simon Knappstein | treasuryXL

 

We discovered the article ‘Are you getting a fair deal on your derivatives trades” on treasurytoday. In the article derivatives are described as a good tool to mitigate risk and protect the company’s financials from moves in the market. However, derivatives come at a cost and often these costs are also hidden, which means that the  treasurer cannot be sure that he is getting a fair deal.

 

Price of the deal

Greater transparency is needed and  that was the reason why company NEXTrioptima developed its triCalculate solution. When treasurers execute a deal with a bank they typically cannot see how the price of the deal is calculated and what the bank is charging them for credit risk.The tool triCalculate tries to change this by taking the corporate’s derivatives trade file, a credit curve file and a credit support annex (CSA) file (where one exists) and running these through a series of highly complex mathematical simulations. The result: an accurate XVA calculation that enables corporates to quickly identify and price the impact of a counterparty default and the cost of funding a derivative portfolio. This is the first Software as a Service (SAAS) on the market. The tool does not only provide  companies with  greater transparency over their current derivative portfolio, but also offers the chance to plan new deals much better.

We asked our expert Simon Knappstein if this tool is really worth the while.

All the capital a derivative trade consumes, or is expected to consume, over its lifetime is  increasingly incorporated in the price of a trade. CVA, a valuation adjustment for counterparty credit risk was initially the major adjustment, soon to be followed by FVA (funding value adjustment) and many related adjustments that go under the umbrella name XVA. Properly calculating these adjustments for every trade on a portfolio basis is difficult and time consuming. So the new product offering TriCalculate by NEX TriOptima looks like a promising tool for corporate treasurers to help them gain insight in the pricing process of derivatives offered by their bank. By the way, being able to calculate a fair value on a potential trade does not guarantee you a fair deal, but it will certainly help.

Simon Knappstein - editor treasuryXL

 

Simon Knappstein

Owner of FX Prospect

 

 

 

More articles of this author:

FX global code of conduct

Negatieve interest rate policy: No lasting effect on FX

 

Payment threat trends

| 12-6-2017 | Lionel Pavey |

In the article ‘payment threat trends’ on FinExtra.com you can read that the European Payments Council provides an insight into the latest developments on threats affecting payments, including cybercrime. You can also download the document, which is divided in two sections. One analyses threats including denial of service attacks, social engineering and phishing, malware, mobile related attacks, card related fraud, botnets, etc… Another section aims to include early warnings on threats related to emerging technologies which could lead to potential fraud, including cloud services and big data, internet of things and virtual currencies.

Payment policies

Generally, companies will have a secure, written policy for making payments. These will be generated from the purchasing and bookkeeping systems and should be reconciled. Beneficiary static data should be restricted to view only for the staff – only authorized staff can make and amend the data.
Payments relating to creditors should only be processed if a purchase order has been originated internally and is approved. All payments should be uploaded to recognized bank systems and verified with a six-eyes doctrine.

The biggest area of concern relates to electronic payments outside of the abovementioned process – namely via credit cards. If inventory levels are not correctly monitored then it can occur that a one-off purchase order is made. Payment should be made through a recognized payment provider such as Ideal or PayPal. Furthermore, the issuing of credit cards to key personnel leads to many more risks that can not be directly controlled by the company.

Risks for companies

When using a credit card in a public area, there are a few obvious dangers:

  • Card being stolen
  • Open WIFI in the area
  • Skimmers applied to hand held card devices

Up to now, the majority of payments have occurred on stand-alone bank software. As we enter the electronic age of disintermediation, there are many companies offering payment services. Blockchain and bitcoin are the obvious examples. No system is completely secure but, in the past, banks have made good on any loses if it was shown that the banks systems were at fault. However, hacking into Blockchain wallets and taking electronic coins has occurred and the losses are not covered as they are not run by banks or governments.

For a company this leads to direct risks such as monetary loss, fraud and loss of reputation. Also of concern is the danger of company data being stored by external third parties.

Clearly defined doctrine

Despite all the technological advances being made that make payments easier, companies need to stick to a strong clearly defined doctrine for payments:-

  • Only payments via purchasing and bookkeeping systems
  • Restricted use of credit cards
  • Elimination of petty cash
  • Secure protection of the static data relating to creditors
  • Payments offered only through recognized bank software

Blockchain

Blockchain is a reality – its uses go far further than just payments. The technology can not be stopped – the major issues (in my opinion) revolve around the electronic currencies (Bitcoin).
Companies would do well to investigate the advantages that Blockchain offers and consider how it can be implemented within a company. Some of the potential uses include compliance, insurance, finance, energy, supply chain management, human resources, accounting, data, taxes etc.

As for payment threats – stay alert, identify and manage risks, and keep abreast of changes.

Lionel Pavey

 

Lionel Pavey

Cash Management and Treasury Specialist


Safety of payments

Payment fraud – Leoni case

Blockchain and Supply Chain Finance: the missing link!

| 19-5-2017 | Carlo de Meijer | treasuryXL |

Our expert Carlo de Meijer is our blockchain specialist and publishes his articles on a regular basis. We present his latest article about blockchain and supply chain finance in a shorter version.
Carlo writes: Whereas the focus on the use of blockchain long time has been on payments and securities, an important but still undervalued use case has been supply chain finance. But that is changing. The complexity and scale of existing supply chain finance solutions has posed major challenges in ensuring adequate funding and efficient operations. According to some blockchain technology has the potential to be a game-changer for supply-chain finance. Let’s have a look.

Present state

Supply chain finance (SCF) is a generic term for a wide variety of financing instruments, used to finance various parties in a supply chain. SCF refers to the use of short-term credit to balance working capital between a buyer and a seller, thus minimising aggregate supply chain cost. Businesses can use supply chain financing to build stronger relationships with suppliers, decrease currency risk and ultimately improve liquidity.

Financial institutions offer supply chain financing solutions aimed at improving the purchaser’s working capital, and the supplier’s liquidity, by providing an efficient payables platform to streamline the payment process. Compared to the “old-fashioned” Letter of Credit, SCF now also encompasses new trade finance instruments including factoring, reverse factoring, payables financing, and dynamic discounting. Reverse factoring is the most popular and most widely used supply chain finance instrument. In reverse factoring, receivables are sold to a bank at a discount as soon as they are approved by the buyer. The bank then commits to pay the company’s invoices to the suppliers.

It is important to understand that supply chains are complex by nature; various parties are involved from raw goods supplier, producer and distributor all the way up to the consumer. This has posed major challenges in ensuring adequate funding and efficient operations.

Blockchain and supply chain finance

The question is: what can blockchain mean for supply chain finance and how could it be applied?

A blockchain-based supply chain finance solution more specific via so-called smart contracts will essentially enable all parties in a supply chain finance solution to act on a single shared ledger. A supplier and manufacturer, along with every other participant, will solely update their parts of the transaction, enabling efficiency and an “unprecedented” level of trust and transparency on a ledger record that is immutable.

“If you talk to supply chain experts, their three primary areas of pain are visibility, process optimization, and demand management. Blockchain provides a system of trusted records that addresses all three.” Brigid McDermott, vice president, Blockchain Business Development & Ecosystem, at IBM

Blockchain technology can offer great potential for both corporates and banks in terms of increased control, speed and reliability of their supply chain and at a fraction of the cost of their current infrastructure. Payments made via this digital system can be monitored by both parties, meaning that suppliers are no longer at a disadvantaged positon in the buying process while they wait for processing. Blockchain will speed up the process, giving the two companies more control, and in the long-term would ultimately create more robust supply chains.

Because the bank can see both the original contract as well as the order placed with “Company B by Company A”, it can verify both authenticity and provenance. Further, if the contract tracks manufacturing or transportation events, the bank can also know the state of fulfilment at any given time. What should be quite clear is that the visibility and auditability that are main characteristics of blockchain technology allow financial collaboration across supply chain echelons, not just bilaterally.

The time required from initiation to payment can therefore be dramatically reduced. In addition to the reduced transaction time, other benefits for importers and exporters include reduced bank fees (due to less manual activity on the part of the banks), reduced time for loan approval, and reduced risk of fraud. This way of financing a supply chain is radically cheaper and more efficient than the current way of doing business.

Blockchain: the missing link

Using blockchain may provide a simple system of secure record keeping that allows the bank redeeming CFS “to ensure that the CFS presented by the holders has been used to finance appropriate supply chain smart contracts”. At the same time suppliers using the blockchain system may retain the privacy that is need in their financial transactions with their sub-suppliers.

There are still challenges to be dealt with, too, such as the need to implement paperless trade, issues of data privacy, and how to get all members of a supply chain to participate. If global supply chains are to gain the full benefit of this technology for managing payments and related data, all parties that play a role in global trade must be involved!

By providing this missing piece of the information and supply chain management puzzle, blockchain may become the missing link!

Blockchain SCF projects

Since early this year the number of blockchain projects to improve supply chain finance is growing firmly. Especially IBM is very active in this area and partnered with companies in China and India to work on new blockchain-based solutions. IBM also teamed with Danish logistic and transport company Maersk Line, to create a new solution to digitize the global, cross-border supply chain using blockchain technology. Start-ups are at the same time popping up to help bridge the gap to this new technology, such as blockchain-based financial operating network Fluent, which aims to streamline supply chain finance.
“Blockchains built into supply chains can offer trust and accountability, as well as compliance with government regulations and internal rules and processes, resulting in reductions in costs and time delays, improved quality, and reduced risks,”Arvind Krishna, IBM Research Senior Vice President and Director Yijian Blockchain Technology Application System

 

Carlo de Meijer

Economist and researcher

 

 


You can read more about the different SCF projects in the complete article of Carlo de Meijer on LinkedIn.

 

 

Better Decisions through real-time Reporting: Business Intelligence about Cash Flows & Cash Positions

|17-5-2017 | Joerg Wiemer | TIS | Sponsored content |

How do strategic professionals decide on the best path to success for their company? The key is in transparency and real-time reporting. If it comes to the responsibility of the treasurer or financial professional this means deciding about company-wide cash flow and liquidity levels, bank, customer and supplier relations and working capital.

When cash flow visibility is the lifeblood of your company, you want full control and knowledge. Direct access to insights on profitability and potential business risks allow users to drive better decisions based on solid business intelligence, accessible anytime and anywhere.

 SCENARIO

Better decisions: Companies now have the power of the Business Discovery Manager – a business intelligence module within the TIS cloud platform. Supplier, salary and treasury payments can be easily analyzed along with cash flows, liquidity and working capital via easy-to-use dashboards and reports. The tool, enhanced through state-of-the-art BI technology, enables users to access all strategic insights in a single, flexible, web-based and multi-bank, multi-ERP capable platform available 24 hours a day from anywhere in the world.

 

Source: TIS Treasury Intelligence Solutions GmbH

Challenges

You can’t manage what you don’t measure

  • A lack of visibility over liquidity, working capital and cash flows at the C-level, in treasury, controlling, accounting, Sales and
    purchasing departments.
  • No transparency regarding bank relationships, liquidity positions and account turnover
  • No transparency regarding customer and supplier relationships, as well as incoming and outgoing cash flow

TIS Business Discovery Manager

Company-wide unified automated analysis of cash flow, liquidity and working capital in various departments of Corporate headquarters and in local subsidiaries

  • Multi-bank capable
  • SAP ERP integration via certified plug-in; connection to any ERP, HR and treasury system
  • State-of-the-art BI technology and functionality in a single SaaS solution
  • Support of customer-specific BI tools; support of self-service BI functionality
  • Business Intelligence as a Service: Ready for use throughout the company within seconds without any complex IT projects
  • No changes to bank or system landscape required; the solution is flexible and easily adaptable
  • ISO 27001 certified for data security

 Customer value

  • Better decisions based on complete visibility of liquidity, working capital and cash flows
  • Ability to quickly answer essential questions without the need for any extensive IT projects

Your benefits

C-Level executives:

  • Instant reports about cash flow performances (total of all inflows and payments) of the various local subsidiaries compared to one another over a specific time period
  • Identification of corporate risks and value-adding activities to drive future growth
  • Tangible insights to support internal and external audits
  • Power and data to provide strategic advice to sales and procurement departments

Treasury and controlling teams:

  • Answers to key questions, such as: How much liquidity is available at which bank? What is the net cash flow for a specific currency over a specific time period for a group of companies (natural hedge)? How much working capital does a local subsidiary require in a specific time period?
  • Increased compliance, transparency, and more efficient processes paired with reduced costs

Accounting teams:

  • Visibility of when a supplier was paid, or when a customer paid a local subsidiary over a certain time period
  • Insight into the value of inflows made by customers via various bank accounts and ERP systems over a specific time period

Sales teams:

  • Insight into the value of inflows made by customers and the overall payment behavior of the customer base

Purchasing teams:

  • Transparency across values of overall payments to a supplier via various bank accounts and ERP systems over a specific time period

Source: TIS Treasury Intelligence Solutions GmbH

Business Discovery Manager: never struggle to answer any of these business-critical questions again

 

joerg wiemer

Joerg Wiemer

CSO and Co-Founder of TIS

 

Guide to Treasury Technlogy by ACT & AFP

| 1-5-2017| treasuryXL | ACT | AFP |

ACT and AFP have published a Guide to Treasury Technology sponsored by Bloomberg, which might be interesting for you.
Managing treasury tasks has become more complex due to globalization of markets and increasing uncertainty in business since the first AFP edition appeared in 2011. Since then treasurers faced multiple challenges to exercise control of treasury activities, especially group activities.

Managing treasury has become more complex during the years in the face of global change and increasingly uncertain markets. Treasury practitioners face magnified challenges, as they try to gain more visibility and exercise more control over group activities. Treasury technology developed quickly to help them to operate more efficiently and answer compliance requests with ever more stringent regulation. Automate processes was one of the biggest challenges. Technology can help treasury play a more strategic role, automate routines and be compliant with regulatory environment.

Joint AFP/ACT publication, sponsored by Bloomberg

This guide is the first joint AFP/ACT publication and aims to help practitioners to identify a cost-efficient solution.

The first chapter starts with a detailed introduction of the development of treasury technology, expectations towards this technology and how the evolution of the Corporate Treasurer took place. This chapter illustrates how the technology available to treasurers has developed over the last 15 years. A brief explanation of how dedicated treasury technology was first developed is followed by details of how a series of factors have moulded the treasury technology market into the one we see today. Three points are highlighted: that the treasury technology market has matured, tremendous improvements in the quality of connectivity and what the changes brought with them for Corporate Treasurers.

Why review technology?

In Chapter 2 the drivers for reviewing the technology and a case study are presented.
With the rapid changes in available technology, the increased opportunity for treasury centralization and the need for treasurers to be able to demonstrate control over activities, treasurers were reviewing how best to deploy technology in order to help them perform their various roles effectively. Given the different environments in which companies operate, the potential benefits from the deployment of a new technology solution can vary significantly. This chapter outlines some of the key drivers that are encouraging treasury practitioners to review their use of technology.

Purpose of technology

Chapter 3 deals with the purpose of technology and identifies the core roles of the treasury department. Also how treasury structure can affect the use of technology. When assessing a deployment of technology, treasurers need to determine their requirements of the technology. This chapter includes a series of questions to help treasurers clarify their existing operations and also identify how structures and processes might change with the adoption of new technology. A case study shows how a company uses a certain technology to improve process quality.

Technology solutions

Chapter 4 presents treasury technology solutions.
A wide range of technology solutions is available to support treasurers. Treasury management systems are able to support the majority of the work of most treasury departments. However, it is also possible to develop a technology solution that supports treasury departments, including those with complex operations, without adopting a treasury management system. This can be achieved by developing in-house solutions or by using tools offered by banks and other vendors. A range of potential solutions available to support treasurers is presented in this chapter.

Evaluation and building a business case

Chapter 5 is about the evaluation process and how building a business case can help to evaluate which technology fits best. How to build a business case and then how to develop a requirements definition is explained in detail. The requirements definition is a critical part of the process: it helps to set the scope for the project and is the core document in the selection process. The process of developing the requirements definition also helps to build support for, and awareness of, the project throughout the rest of the organization.

Selection, implementation and maintaining the solution

Chapter 6, 7 deal with the selection and implementation process, while chapter 9 tells you more about maintaining the solution over time.

Trends

Chapter 10, the final chapter describes some of the current trends in treasury technology and lines out how they might impact treasurers over the coming years. Some of the key areas of development in technology and also some of the market changes which might require a technological response are presented.

In the appendix of the guide you will find information on how to develop a request for proposal (RFP) , a checking list for this RFP and a very detailed country reports list.

Source: © Association for Financial Professionals, ACT (Administration) Limited and WWCP Limited (except articles by Bloomberg LP), 2016, ISBN 978 1 899518 47 0 book 978 1 899518 48 7 CD ROM, for the articles  Bloomberg LP, 2016 | TMI

Our conclusion

A very detailed, valuable guide for all who want to learn more about treasury technology, want to find out more on how to select the best technology solution that meets the specific requirements of their company and what to focus on during the purchase and implementation process. You can find the guide on tmi, after registering for free.

 

Singing from the same hymn sheet

| 26-4-2017 | Hubert Rappold | Sponsored content |

Hubert Rappold from TIPCO Treasury & Technology, puts the case for a treasury information platform (TIP), which acts as an information hub for the treasury department and reduces companies’ reliance on “Excel-based monstrosities” that are doomed to fail.

 

A typical treasury department runs a number of systems: a treasury management system for day-to-day operations, a trading platform, a market information system, electronic banking software and so on. So why on earth would you really need a separate treasury information platform (TIP)? After all, the data already exists in a multitude of other systems. Well, that is certainly true but also part of the challenge. If there is no single place where all the data can come together to create your reports at the press of a button, you will most likely be forced into a mediocre data warehouse solution also used by other departments or into a ‘handmade’ spreadsheet-based solution with all its drawbacks.

On top of that, even in an ideal world, when all your data is in a single system, there are circumstances where it is almost certain that you will need to integrate additional data. Just think about acquisitions. lt usually takes years before the systems are harmonised. So what do you do in the meantime?

Requirements of a TIP

A TIP needs to fulfil a range of requirements in order to satisfy the needs of treasury departments.

  • lt needs to be easy to use
  • lt needs to integrate existing data sources
  • lt needs to have a flexible reporting engine
  • lt needs to be easy to maintain
  • lt needs to be extensible

What happens if these requirements are not fulfilled is quite easy to imagine. Your reporting will be cumbersome, error-prone and data quality will be poor. Ultimately, the reporting project will fail and a new generation of interns will develop yet another Excel-based monstrosity doomed to failure.

Let’s look at these requirements in greater detail:

  • If it is not easy to use, it will not be accepted by your users, resulting in poor data quality and frustration. The benchmarks are spreadsheet­based solutions. If the handling is as easy as in these systems, then your users will be happy.
  • If it does not integrate existing data sources, you force users to duplicate entries, resulting in frustration and hence in poor data quality. Of course this is not a one-way street. Think about the FX exposure captured by your subsidiaries as part of the forecasting process and locally contracted FX transactions. Your risk manager will be more than happy to have this information in his or her treasury management system. Think about payment advices. Collect this information and you can use it to optimise the funding of your cash pools. Your TIP will act as an information hub for the treasury department, passing data back and forth between various systems.
  • If it does not provide a flexible reporting engine, you will not be able to react to ever­changing requests from internal and external sources and will essentially resort to time­consuming, cumbersome and error-prone spreadsheet reporting. Flexible not only means that it covers all functional aspects. lt also means that even without being an IT guru you should get meaningful information out of the system. However, be on your guard if you are told that you will be able to create sophisticated reports within minutes without any training. That only works well in promotional videos. Invest some time in proper training and be the master of your reports.
  • If it is not easy to maintain, you will be frustrated by the administrative overhead of the system instead of working straight on the analysis of the data. lt needs to be straightforward to add new users, companies and company groups. Whether via manual input or interfaces, the data needs to end up in your reporting solution without delay, without reprogramming, and without any external expertise.
  • If it is not extensible, you will be forced to install even more systems if a new function is required, such as cash flow forecasting, bank relationship management and guarantees. Therefore, think ahead. Before selecting a system, clearly state what you want it to do now and in the future.

Outline of system architecture

Below, I have outlined how such a system could fit into your existing system environment and what the interactions are between these components.

The TIP acts as the information hub between the various systems. lt receives and passes on data to and from other systems. Based on this data, all the reports are created without any need for manual consolidation.

Benefits of a TIP

  • The TIP receives the data from other systems and passes it on to other systems. This reduces the number of interfaces between systems and hence the overall complexity.
  • The reports are created from a single common data source. There will never again be any more mismatches between different reports as they are all created from the same set of data.
  • lt becomes less costly and less risky to replace components of your system architecture. If you need to replace one of the components, you can be sure of having a minimal impact on the overall system architecture. If you use a new treasury management system (TMS), you only need to replace a few interfaces between the TIP and the TMS. If you switch to a new market information provider – no problem, just replace the interface to the TIP. lt will pass on the data in the established way to all the other systems involved.
  • lt becomes easier to add new functionality: If you require a new function, for example, cash flow forecasting, it is also easier to update or extend a lightweight TIP instead of relying on the next release cycle of your TMS provider.
  • lt becomes easier to add acquisitions: Even if newly acquired companies are not integrated into your system infrastructure, they can use uploads or simple screens to provide their data.

Selecting a TIP

Usually, a TIP is selected because there is one burning issue that needs to be solved, for example, a group-wide overview of bank accounts or cash flow forecasting. If you select a TIP for any of these functionalities, always ask yourself what could be the next burning issue. These are usually identified by analysing the existing spreadsheet-based solutions. Any of these is a good candidate to be replaced by the TIP.

With this list in mind, look at the existing providers and make sure that they cover all your needs and not only the one that currently causes most of the pain. Also make sure that the system provider has treasury experience. Just think about cash flow forecasting. Most system vendors will tell you that planning is part of their system. However, a closer look will show you that basic functionality is missing; for example, the connection to the financial status as the starting point of the forecast or the display of credit facilities according to their maturity structure. Basic things, if you are treasurer, but a different world for the average system provider.

Also make sure that the system has an intuitive user interface, especially where large amounts of data are captured, for example, for the cash flow forecast. lt should be as easy as a spreadsheet­based solution in order to gain the acceptance needed. Interfaces should exist to all relevant standards and systems. Last and definitely not least, a large customer base that happily acts as references is a must. If this does not exist, the chances are high that the system provider will develop the system at your expense.

Look at your current treasury reporting. If you encounter lots of spreadsheet-based solutions, if you see files transferred via e-mail, if a lot of manual work is needed to create reports and if you find yourself tracking down differences between different reports time and again, you should consider a treasury reporting solution like TIP.

For more information please refer to TIPCO Treasury & Technology

Hubert Rappold – CEO at TIPCO Treasury & Technology

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