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TIS & FX Treasury Webinar: Corporate Payments Optimization
| 06-10-2017 | TIS | 2FX Treasury | Sponsored content |
Complexity is not your friend. Whether in your finance, treasury, shared services or IT departments, improved processes help to reduce risk.
How do the most efficient and effective businesses in today’s world manage a multi-region, multi-bank, and multi-ERP environment? How have leading finance, treasury, and IT professionals gained visibility across their corporate payments landscape?
Flex Treasurer: Who needs a treasurer?
| 05-10-2017 | Olivier Werlingshoff |
Do all international companies need a Treasurer or a Cash Manager? Yes and No would be my answer. In this article I will give my opinion on the reasons (not) to hire a Treasurer or Cash Manager.
First we have to focus on the definition of a Treasurer. Wikipedia: “he or she is responsible for liquidity risk management, cash management, issuing debt, foreign exchange and interest rate risk hedging, securitization, oversight of pension investment management, and capital structure (including share issuance and repurchase).”
Activities are Cash Management, Risk Management. Corporate Finance and Treasury operations & control. In a lot of companies all these activities and processes are part of the job of a controller and a finance manager.
When the company has financial problems the cash management activities, especially the cash flow forecast and the (inter)national banking environment, will come into the spotlight. A reliable cash flow forecast is built up on the right information about the cash position and the planning for the period to come. The problem is how accurate are the predictions for the future in the ERP systems? The right information can be obtained by asking not colleagues of the finance department but the sales colleague and procurement. This can be a time-consuming exercise.
There are a few new fintech companies who focus on the optimization of cash management processes. It is possible to manage all your bank accounts with one single system, where different ERP and company systems can be connected to each other which make it easier to set up a cash flow forecast. The search for the right information can be facilitated.
If you focus on the corporate finance activities such as an IPO or a refinancing, specific and knowledge is needed. This does not happen often.
My suggestion is to hire a Flex Treasurer and let him make a scan of all the treasury processes in the company. The Flex Treasurer can also implement improvements on the cash management and risk management activities. When all improvements are done see if the activities can be integrated in the existing jobs or you could hire a cash manager.
If a company decides to do an IPO or a refinancing there are plenty of companies specialized in this field. Therefore it would be smarter to use an interim consultant till the job is done.
Olivier Werlingshoff
Owner of Werfiad
Indian Rupee remains very vulnerable
| 04-10-2017 | Rob Beemster |
What has changed India in recent months?
It seems latest macro-economic data in India have changed the outlook on its currency. The country is well-beloved due to its place under the economic and international sidelines. Apart from drastic measures taken by the government on monetary and fiscal front, the country is usually not on the forefront of economic papers like other BRICS partners.
What has caused the different outlook on the rupee?
A, a rise in CPI inflation ( to 2.4% for July from 1.5% in June )
B, a meagre April-June, 2017 GDP report showing a three year low in growth of 5.7% YoY ( 6.1% in the previous quarter ) This is the fourth consecutive quarter with slowing growth
C, signals of a fiscal deficit above the 3.2% GDP target in the running fiscal year
D, almost a year after demonetisation, M3 and bank lending growth remain well below pre-demonetisation levels, a sign of tight liquidity conditions are hurting businesses
Investors and other members of the financial communities dislike a combination of factors A and B. This has resulted in the fall of INR against euro and dollar in September. Although INR is still one of the most popular Emerging Market currencies, a continuation of disappointing economic data might change this international feeling towards INR. According to RBI data, the recent depreciation is in partly due to equity and bond portfolio outflows.
What to do?
Be aware of a volatile INR. The currency has lost some of its popularity, due to the facts named above. Future is always insecure, take North Korea vs. Trump, how will Brexit change Europe etc. These issues will most certainly have an impact on the dollar and Euro, so may affect the INR as well.
An international trading company, during these unsteady times, should take care of international currency flows. From Sept 8 till Sept 27, INR lost 3 % against the USD. This could be a big stake of the profit margin!
We can help you designing the right structure, whereby a strategy will protect you from harmful currency moves. A lower INR can slam your profit, we help you avoiding this. We know the Indian market. Call us on +31228528579 or mail us via [email protected] and we will help you to solve your currency risk.
Rob Beemster
Owner of Barcelona valuta experts BV