BCR Publishing
We are the leading provider of news, market intelligence, events and training for the global receivables finance industry.
Working with industry leading organisations, experts, governments and universities, BCR Publications delivers expertise in factoring, receivables and supply chain finance to a global audience.
BCR has long been a beacon of innovation and excellence in the realm of receivables finance, playing an instrumental role in shaping the industry’s international landscape. Through its comprehensive conferences, insightful publications, and thought leadership, BCR has facilitated crucial dialogues and connections among industry professionals, driving forward the development of receivables finance globally.
Meet our Expert | 8 questions for Jermal McDaniel
14-03-2022 | Jermal McDaniel | treasuryXL | LinkedIn |
We are happy to interview treasuryXL expert, Jermal McDaniel.
Jermal is an accomplished Finance practitioner with over 16 years of Treasury operations and Finance experience.
Jermal is an innovative visionary who utilizes a “Think Tank” methodology to generate ideas and action plans designed to streamline and automate manual processes to facilitate department efficiency.
How did his career in Treasury start and what is his best experience working in Treasury?
We asked him 8 questions, let’s go!
INTERVIEW
1. How did your treasury journey start?
My Treasury journey started when my agency recruiting career ended in 2003. I did not set out to be a Treasurer, I kind of found myself in the Treasury field and I am blessed to still be a part of the Treasury Community.
2. What do you like about working in Treasury?
I love the sense of urgency, the attention to detail, and the camaraderie/synergy needed to be a successful Treasury department. I often tell my staff that Treasurers are not born, they are made, and if you are detail-oriented, can work well under pressure, and are timely and accurate, I can give you the rest of the tools to be successful.
3. What is your Treasury Expertise and what expertise gives you a boost of energy?
My Treasury experience is Mortgage-related. When studying for the CTP it gave me a lot of insight into FX transactions, Short Term liquidity investments, and optimal Debt vs Equity financing philosophies for Firms, but my expertise is in managing all aspects of Treasury including Banking relationships and building well run cross-functional Treasury Teams.
4. What has been the best experience in your treasury career until today?
My best experience has been seeing a few of my former employees take the knowledge and guidance that I have given them and parlay that into Sr. Manager and Director of Treasury roles.
5. What has been your biggest challenge in treasury?
Data mining, and consistently getting timely information reconciled and into a useful form for Senior leaders to use for decision making.
6. What’s the most important lesson that you’ve learned as a treasurer?
You cannot perform all of the Treasury functions on your own and if you do not have a cross-trained Treasury team, there will be a high probability that important transactions will fall through the cracks tarnishing the reputation of your team and the department.
7. How have you seen the role of Corporate Treasury evolve over the years?
I am excited to see that Firms are really beginning to value what a good Treasury department means to the Firm. As the stewards of the Cash, making sure that there are enough funds to satisfy all of the financial obligations is Paramount to the success and reputation of the Firm.
8. What developments do you expect in corporate treasury in the near and further future?
There is a big push to bring on more Fintech resources to help with recording and reconciling all of the day-to-day cash movements. Treasury Management Systems are helping to streamline cash forecasting and reconciling by becoming a “Single Source of Truth” where information can be accessed by all of the Stakeholders making everyone involved more self-sufficient.
Get in touch with Jermal
Click here for his Expert Profile
Thanks for reading!
Kendra Keydeniers
Director Community & Partners, treasuryXL
Example Question #1 | Treasurer Test
09-03-2022 | treasuryXL | Treasurer Test | LinkedIn |
How is your Treasury knowledge? Today we investigate your Treasury Expertise and ask you an example question that you might face when taking the Treasurer Test…
Read more
The Do’s and Dont’s of Pricing with an FX Rate
09-03-2022 | treasuryXL | Kantox | LinkedIn |
Give up your time-driven rules for pricing with an FX rate and go for a data-driven approach instead!
In this article, we are going to highlight the challenges faced by treasurers as they seek to manage pricing risk. According to Toni Rami, Kantox’s co-founder and Chief Growth Officer: “Understanding pricing is perhaps the most crucial element in order to design a great FXRM program
Credits: Kantox
Source
Click on the image above for the corresponding episode of CurrencyCast
Pricing risk
Pricing risk is the risk that —between the moment an FX-driven price is set and the moment it is updated— shifts in FX markets can impact either a firm’s competitive position or its profit margins.
The natural way to reduce it is to increase the frequency of price updates. After all, the price itself is a potent hedging mechanism. But that is not an option for companies that wish to keep steady prices during a campaign/budget period or during a set of campaigns/budget periods linked together.
We will discuss this situation in further articles. Today we want to highlight the shortcomings of the most widely used criteria for pricing updates: time-driven criteria.
Shortcomings of time-driven criteria
A time-driven rule to manage pricing risk consists in setting a time frame between the moment an FX-driven price is set and the moment it is updated. It can be every 24 hours, every week, every month. Quite obviously, the longer the time to the update, the higher the risk.
At Kantox, we are convinced that this approach is arbitrary, that it doesn’t protect you against FX risk, and that it does not reflect the business or financial needs of the firm. Take the 24-hour rule. Why not 23 hours or 25 hours instead? A time-based approach does not eliminate risk: a sharp move in markets can well take place inside a very short time span before prices are updated.
Another way to see this is that it makes it more difficult for the firm to react to favourable moves in FX markets. Take the case of a firm that prices and sells in EUR and buys in USD, using the EUR-USD currency rate as a key pricing parameter. A rise in the EUR could allow it to outsmart the competition by pricing more competitively without hurting its budgeted profit margins.
Failure to take advantage of this type of opportunity is a serious shortcoming in terms of pricing strategies, at a time when —according to consultants McKinsey— pricing is becoming a key strategic element in today’s competitive landscape.
The alternative: data-driven criteria
At Kantox, we believe that such arbitrary time-driven rules should give way to a data-driven approach that consists of setting boundaries around an FX reference rate, such that prices are updated only if the market moves beyond the upper and lower bounds of those boundaries. The system then serves a new reference rate and dynamically adjusts the upper and lower bands around it.
If FX markets remain relatively stable, then the firm can keep steady prices, something that is attractive in many B2C setups. This approach also allows treasurers to take advantage of favourable moves in currency markets while protecting budgeted profit margins, independent of when these movements occur.
How far or close to the reference rate these boundaries are set reflects risk managers’ tolerance to FX risk. In addition, the pricing configuration can be adjusted according to the goals of management in terms of:
While most Treasury Management Systems lack what we call a ‘strong FX rate feeder’, Currency Management Automation solutions —working alongside your existing systems— allow finance teams, among many other things, to set up an efficient data-driven solution to manage all the aspects of pricing with FX rates, including pricing risk.
Worried about your FX risk health? Take our free assessment and get a personalised insights report in minutes.