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Why Steven decided to explore the World of Treasury
| 02-09-2019 | by treasuryXL | Kendra Keydeniers
Steven is Cash & Currency Manager at Royal Boskalis Westminster NV, a Dutch dredging and heavylift company. With its roots in the Netherlands, Boskalis has over 100 years’ experience in hydraulic engineering, coastal protection and land reclamation. The head office is located in Papendrecht and they have an extensive network of branches around the world. They operate in 90 countries and across six continents, with a versatile fleet of more than 900 vessels and floating equipment. Shares in the company have been listed on Euronext Amsterdam since 1971.
We asked Steven 4 questions about the RT program:
What for you was the main reason to start a career in treasury?
During my final year at the Radboud University in Nijmegen where I studied Business Economics, I started at a small advisory firm specialized in (corporate) financing. That was my first experience in treasury and it suited me well. Soon afterwards I joined a development & construction company that showed me that treasury was more than just financing and before you know it, you are a ‘treasurer’.
Why did you start with the RT program?
After working within the same company for a few years I noticed that my learning curve was leveling out. I started to investigate what treasury courses and programs where available and found that the RT program is without any doubt the best and most comprehensive treasury course available in The Netherlands.
How did the education help you in your career?
Not only did I gain a lot of new knowledge about treasury, but also about related topics such as macro-economics, fiscal law and (hedge) accounting. This helps to connect the dots a lot better when you’re back at your daily job. It also brought me a new network of people, good memories and I even think my current job at Royal Boskalis Westminster NV.
Are you still in touch with your peers?
Absolutely, during the 2-year program you built a strong relationship with your peers, since you do spend almost a full day per week with them. This is also one of the bigger benefits of the RT program in comparison to at-home studies.
We have more RT stories to share with you. Read the RT story of Bouke, Michel, Jarno, Mathieu and Richard and/or read more info about the RT program here.
The post-graduate Executive Treasury Management & Corporate Finance programme combines two finance disciplines: Treasury Management and Corporate Finance. These disciplines largely overlap and are inextricably connected.
After a successful completion of all required modules, the title of Registered Treasurer (RT) is conferred by the Registered Treasurer foundation.
As of last year the Register Treasurer (RT) program at the University of Amsterdam is taught in English. This is an important change as the program used to be in Dutch.
The course started on 1 September 2019.
The Core Benefits of Netting For Corporates
| 29-8-2019 | treasuryXL | BELLIN
Simplify intercompany commerce, minimize fees and elevate visibility
Understanding the core benefits of netting
Multinational corporations are familiar with the downsides when involved with intercompany commerce. Growing transaction fees, currency exchange risk, and lack of transparency are common facets that make it difficult for such organizations. Corporations can implement netting to mitigate those downsides and free up valuable time for treasury and accounting departments. This article will shed light on the benefits of netting and why your company needs to consider implementing it.
A brief definition of netting
Netting or “Intercompany Netting” is the process of reconciling and netting intercompany invoices between two parties, resulting in a final payment and netted cashflow. In regard to financial markets, the purpose is essentially to minimize transactions and distinguish remuneration in multiparty agreements. Netting is suitable for various situations, participants, and cycle types. For more information, check out our in-depth guide to netting here.
Bilateral Netting: Two companies reconcile invoices they may owe to each other and one company agrees to pay the other one sum.
Multilateral Netting: Three or more companies netting invoices together and a netting center is used.
Further Reading: Netting: An Immersive Guide to Global Reconciliation
Macro benefits of netting
Multinational companies often perform transactions with their own subsidiaries or with non-group companies. Because of this, companies must keep currency exchange rates in mind. Original invoices are often sent in the originating currency, which raises the need for either an external exchange service, a bank, or a netting center. With netting, the foreign exchange risk is centralized to the netting center.
It will not only keep existing invoicing procedures intact but avoid the loss of money involved with inflated currency exchange rates when using external exchanges. As mentioned, the FX risk is transferred from individual subsidiaries to the parent company, which is usually more equipped to manage it.
Cash-in-transit is a thorn in just about everyone’s side. Stagnant approval and processing times can create a chain reaction of risk as that cash is unable to be used. Whether it is bilateral or multilateral netting, keeping invoices to a minimum reduces the amount of money that is stuck in the limbo phase of approvals and processing times.
Treasurers are able to operate at a high level when they are afforded visibility of cash flows. When subsidiaries make bulk payments, lack of liquidity or financing issues can arise and if company-wide visibility is lacking, it becomes difficult for a treasury department to act accordingly. Bulk payments backload and are concentrated in a short amount of time, cash flow is stretched thin among many of the subsidiaries. A netting system will provide daily reports and monitoring tools that provide cash flow visibility throughout the group.
Maximize operational efficiency
Naturally, one of the more prominent benefits of netting occurs on a daily basis. Treasury departments will see a drastic reduction in time spent on transactions and managing foreign exchange risk. From an operational point of view, a netting process simply saves treasurers time and establishes a company-wide process for disputes.
An example of this is with BELLIN clients, who save an average of 2 days of work per month per affiliated company. For an organization of 30 affiliated companies, that’s 60 days per month or 720 days a year. Realized savings typically range from $250,000 to +$1,000,000 on an annual basis.
Manage Disputes
When implementing a netting system, the treasury department is tasked with establishing a protocol for managing disputes. When subsidiaries fail to submit payables, a hitch in the payment process is born. What this causes is the inability for the payee to continue with their daily operation as they wait for receivables. Administrators can establish automated escalation protocols, which will elevate disputes to upper management based on pre-defined time periods. The escalation system leads to both tangible and intangible benefits as it literally resolves disputes through escalation and also provides an incentive for subsidiaries to execute their payables to avoid the unnecessary involvement of management.
BELLIN’s intuitive TMS: tm5, has a netting module that reconciles invoices and manages disputes with an ‘agreement-driven approach’.
The ‘agreement-driven approach’ is essentially a self-clearing methodology that utilizes the previously-mentioned: escalation protocol. tm5 automatically matches all receivables against payables and has an embedded dispute workflow for discrepancies. Consequently, the group company establishes group-wide agreements for disputes and will elevate them accordingly. With such an approach, all subsidiaries are involved in the entire process, disputes are mitigated and automatically escalated, and there is group-wide transparency.
BELLIN’s tm5 netting module has an intuitive interface but the key ingredient that makes it shine is that the platform has standardized functionality with the flexibility to meet the needs of all subsidiaries.
Interested in finding out more about whether netting is the right solution for you? Give BELLIN a shout or check out tm5, our intuitive treasury management system.
Florian Kolb
As a Senior Treasury Consultant and Payments Specialist, Florian Kolb is in charge of a number of implementation and process consulting projects focusing on worldwide bank connectivity. He has great experience with SWIFT/H2H connections and complex global payments projects. Before joining BELLIN in June 2016, Florian worked as a consultant in accounting for an IT systems solutions provider. He studied at Verwaltungs- und Wirtschaftsakademie (Administration and Business Academy) in Freiburg, Germany, and is a Certified SWIFT Specialist.
How the Treasury QuickScan add value to your business
| 27-8-2019 | François de Witte | treasuryXL |
Do you want to know if you can save a substantial amount of money and/or protect your company against major financial risks? Are you willing to invest time and money in treasury within your organization?
The Treasury QuickScan can help organizations with just one scan to assess if an additional effort in treasury can be an added value.
The Treasury QuickScan as a solution
SMEs struggle with increasing exposure to cash & liquidity problems, financing needs and risks (currencies, commodities, interest and liquidity).
Moreover, they do not always have a full-fledged Treasury/finance Department in the organization. That does not mean that these organizations cannot save costs or that there are no opportunities for funding, for example. It is not always necessary to set up a separate treasury department in a company to control and manage the treasury.
The Treasury QuickScan aims to bring a solution to these companies. An experienced hands-on Treasurer can do a first scan within the organization.
The objectives to provide to the company are:
A questionnaire for 5 treasury topics
By means of a structured questionnaire, the Treasury QuickScan aims to make a quick scan / diagnosis of the treasury. Down below, we provide you some questions by topic:
A short recap
The Treasury QuickScan does not solve all your treasury issues but will provide you get a mapping of the current situation, the issues, a first set of recommendations and a business case for further investments in treasury.
For organizations without a dedicated treasury department, this Quick Scan can help them to determine how to manage the treasury. This can be done with own resources and/or you can also consider outsourcing some tasks. This can be very helpful for the development of your company.
How to start a Treasury Quick Scan?
Simply send me a mail or give me a call and we discuss the best option for you.
Founder & Senior Consultant at FDW Consult
Managing Director and CFO at SafeTrade Holding S.A.