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.

Follow BCR Publishing

Free passes

For corporate treasurer roles/functions!

ARTICLES

Meet our Experts – Interview Olivier Werlingshoff

23-06-2020 | Olivier Werlingshoff | treasuryXL

Our Expert Olivier Werlingshoff specializes in the following fields:

His focus is to help the business improve their working capital and cash management processes to release trapped cash, to reduce costs and to be “in control”. Get to know him better:

We asked him 9 questions, let’s go!

1. How did your Treasury journey start?

After working at banks as cash management consultant for several years I was asked to set up a treasury department at a corporate. The company was a combination of retail, real estate and development and active in the whole of Europe. Besides the set up of a new department they also wanted to optimize different working capital processes and increase the cash awareness. Coming from banks this was a total different environment. Instead of telling companies how to optimize their working capital, I had to do it myself together with different departments. My sales experience helped me to increase the internal cash awareness and to promote optimization of working capital processes.

2. What do you like about working in Treasury?

Treasury is the oil in organizations where all cash related departments comes together. By optimizing those processes you can get a grip on your cash, decrease risks and release trapped cash.

3. What is your Treasury Expertise?

Operational cash management, liquidity forecast (direct- indirect), risk management, (international) bank account structure, cash pooling, working capital optimization.

4. Do you have examples of risk mitigation, creation of opportunities and/or cost savings?

Yes, a lot of cost savings examples and also release of trapped cash. Decrease bank transfer pricing, introduction of new payment methods to increase the turnover, implementation of cash pools and optimize working capital processes to release trapped cash to mention a few.

5. What has been your best experience in your treasury career until today?

By showing the benefits of treasury to colleagues by increasing the cash awareness. By doing so, new ideas comes out of the organizations itself and are more easy to implement.

6. What has been your biggest challenge in treasury?

The implementation of a new payment system in a complex organization. You have to focus on stakeholder management and get the operational department behind you with support of the board members.

7. What’s the most important lesson that you’ve learned as a treasurer?

Treasury is a supporting function. You have to help other departments and the CFO to achieve their targets.

8. The coronavirus is undoubtedly an unprecedented crisis. In general, can you elaborate on the impact this virus has on treasury from your perspective?

In a lot of sectors the sales dropped due to the Corona lock-down. Companies need to have a clear view on their cash and be able to pay their invoices on time. Forecasting is more than ever very important and key to be able to forecast funding needs on time.

9. What is your best advice for businesses without a Treasurer?

Not all companies need a dedicated treasurer. Controllers need to have more focus on cash related items and risks (liquidity, FX, Interest and audit). Furthermore it will be good for controllers to focus more on forecasts instead of the reporting of past activities.

Olivier Werlingshoff

Owner at WERFIAD | Working Capital | Cash Management |

Does your business need support in Treasury or a Treasury QuickScan?

We have treasurers available, go to Rent a Treasurer for all information.

Webinar | July 16 | Mitigating Fraud With a Corporate Payment Hub

| 22-06-2020 | treasuryXL | Kyriba |

In today’s changing IT environment, we see more corporates exposed to the risk of fraud, due to legacy controls and manual processes. With many companies applying a new ‘working from home’ strategy, the risk of fraud is bigger than ever before.

During this webinar we will hear:

How does a payment hub support you in mitigating fraud?
What is rules based fraud detection?
Why is machine learning an important part of our fraud detection?
How does fraud detection fit in your overall payment processes?

Paul Simpson, Strategic Payments Director at Kyriba, together with Value Engineer, Alroy D’Cruz, will discuss these most important questions and will give you an insight on how Kyriba is supporting over 2,300 of your peers worldwide with our SaaS Payment Fraud solutions.

Presenters:

PAUL SIMPSON

Strategic Payments Director, Kyriba

ALROY D’CRUZ

Value Engineer, Kyriba

Submit on the registration page and save your place.

About Kyriba

Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, and market data providers. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in New York, Paris, London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other major locations. For more information, visit www.kyriba.com.

An Introduction to Forwards, Futures and Options | Part 2

17-06-2020 | by Aastha Tomar

In her previous post, our Expert Aastha Tomar explained how the forwards work. Lets see the second type of hedge. The second type of hedge contract is futures. Like forwards they also fix the currency rate for a future date. The major difference between a future and a forward is that futures are exchange traded and therefore they are standardized.

Features of Futures

They have standard sizes, delivery dates and settlement rules. The settlement mechanisms reduces much of the credit risk .
-> Now why do I say that credit risk is reduced ? As mentioned earlier, all settlement takes place through the exchange clearing house and the two parties buyer and seller are not in direct contact with each other. Therefore since it is the responsibility of exchange clearing house to settle the trade, the counter-parties run the credit risk of the exchange clearing house instead on each other.
They can be cash settled or physically delivered and are legally binding.They trade in one contract size, so corporate must trade in multiples of that
They move in increments called ticks and each tick has a value. The number of ticks made or lost on a trade determines the loss/profit of the trade
The counter parties holding the contracts on the expiration date must deliver the currency amount at the specified price on the specified delivery date or they can even close out the position before the expiry date, this can be done by doing an equal and opposite trade in the same futures contract.
To enter into a future contract an initial deposit into a margin account is required . The contract is then marked to market each day and a company is required to add more funds to the margin account if cumulative losses drain the margin account. If the company does not respond to a margin call, the exchange closes out the contract.
The contracts are physically delivered four times in a year on the third Wednesday of March, June, September, and December.

Difference between future and forwards

Futures are traded on an exchange hence standardized therefore a company may not be able to hedge the exact and full amount of underlying transaction. They may have to under-hedge .
The delivery date in future may not be same as the maturity of underlying transaction which may open the corporate for some market fluctuation.
The treasures can easily unwind a hedge position earlier than its normal settlement date if needed.
In a forward contract, the bank includes a transaction fee in the contract. In a futures contract, a broker charges a commission to execute the deal.

Lets understand futures with an example :

Lets take EUR/USD as an example,

One contract size for EURUSD future is $125,000 worth of Euros and one tick size for EURUSD future is .00005. Therefore the price movement will be ($125,000*.00005) =$6.25 per EUR

Now if we purchase one futures contract of the EUR/USD, which is trading $1.0901 . We are hoping that EUR will appreciate , relative to the Dollar. Suppose we are lucky and things go as expected, and the exchange rate rises to $1.09015, We will make $6.25 in profit (per contract). Cool !!! Suppose we are luckier and FED makes some negative announcement on top of that ECB does some tremendous positive changes in their policy due to which EUR shoots up becomes much more stronger and exchange rate rises to $1.09110 (a whooping increase of 20 ticks), then we would make $125.00 in profit per contract ($6.25 x 20 ticks = $125.00).

lets see it more clearly in the following table :

Now why do corporates stay away from Futures ?

Futures cannot be customized hence there is not always a complete hedge
Companies don’t want to put initial margin money in the exchange
They want to stay away from the hassle of mark to market each day and depositing money if the losses erase the deposited margin money
With forwards there is a human interaction with the banker who enters trade with you and you feel more comfortable with that, you may also negotiate forward premia with the banker and if there is a long standing relationship with the bank, the bank sometimes forego or reduce the fees. In Futures that’s not the case.

Whether its a forward or future contract, nothing is difficult if you have the intent to learn the product . Once you start understanding how hedge market works and start realizing the benefit of it then it will eventually be beneficial for you as a Treasurer and for your corporate which will be saved from unwanted currency fluctuations. In our third and last post in this series we will talk about Options ..keep learning, be safe.. to be continued ….

Aastha Tomar

FX & Derivatives | Debt Capital Markets | MBA Finance
Electrical Engineer | Sustainability