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.
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Better Decisions through real-time Reporting: Business Intelligence about Cash Flows & Cash Positions
|17-5-2017 | Joerg Wiemer | TIS | Sponsored content |
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
purchasing departments.
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
Customer value
Your benefits
C-Level executives:
Treasury and controlling teams:
Accounting teams:
Sales teams:
Purchasing teams:
Source: TIS Treasury Intelligence Solutions GmbH
Business Discovery Manager: never struggle to answer any of these business-critical questions again
Joerg Wiemer
CSO and Co-Founder of TIS
Short term loans for financing your company
|11-5-2017 | François de Witte | treasuryXL
Our expert François de Witte tells us more about an important task of a treasurer: funding, namely short term loans.
Background
One of the main tasks of the treasurer is to ensure that the company has the required funds to operate. The treasurer will usually contact the banks for this funding. The banks can extend secured or unsecured credit facilities. These can be long term or short term. In the current article, we will cover the unsecured short term loans.
Overdraft lines
The most flexible credit line is the overdraft loan: when providing an overdraft facility, the bank authorizes the company to go below zero on its account up to a certain amount. Overdrafts can be a good way to borrow money for a short period of time. For example, if you don’t have enough money in your current account to cover your outgoings, and are uncertain about when your accounts receivables will be collected, you can negotiate with your bank an overdraft limit. If in that case, you have say 1 million Euro of expenses you can pay them, even if your account balance goes below zero. Once you will collect the accounts receivables, the overdraft position will be settled.
Usually the banks charge in case of use of the overdraft facility an interest rate based upon the internal rate of the bank plus a margin, and in some cases an overdraft fee charged on the total amount of the facility.
Having an overdraft can act as a useful buffer to cover your peak cash needs. It is the most flexible loan, because, in case you have cash inflows, they can be immediately used to reimburse the facility. However if the cash need is more structural, overdrafts are not a very effective way of borrowing, because they may come with a higher rate of interest than some other loans such as the short term advances.
Short term advances
When you have a more structural cash need for a certain period of time, it can be useful to consider short term advances or straight loans. In this case, the bank will extend a short term advances (straight loans) facility.
When the client wishes to utilize this facility, he will ask for a drawdowns amount made available for an agreed upon period at an agreed upon rate. On the required date, the bank will make the amount available, e.g. 1 million Euro, on the account. At the maturity of the short term advance, the borrower needs to repay the advance and the interest. The interest is usually calculated on a benchmark, e.g. Euribor or Libor plus a margin.
The client determines the timing of the drawdowns. Advances are usually extended in the framework of a credit line, although in some cases, the client can just ask a punctual advance to cover a specific need.
Short term advances are less flexible then overdrafts. If you have a short term advance of say 1 million Euro for 1 month, and 15 days later you receive a large collection of say over 1 million, you cannot reimburse your short term advance, and will hence during the last 15 days pay interest on your short term advance, without any or almost any remuneration on your current account. For this reason, we recommend to use short term advance for long(er) term cash needs.
Conclusion
Overdraft facilities are the most flexible loans, but are quite expensive. If you have long(er) term cash needs, it might be useful to consider straight loans, as they are usually less expensive.
There exist many other solutions to finance the short term needs of your business, such as the financing of accounts receivables and factoring. This will be covered in a separate section.
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MIFID II – a short excursion into the MIFID landscape
| 10-5-2017 | treasuryXL |
MIFID
MIFID, short for ‘Markets in Financial Instruments Directive’ (2004/39/EC) and applicable since November 2007 has been a cornerstone of the EU’s regulation of financial markets since then. It aims to improve the competitiveness of EU financial markets by creating a single market for investment services and activitities. To ensure a high degree of harmonised protection for investors in financial instruments.
MIFID or MIFID I set out the conducts of business and organisational requirements for investment firms, authorisation requirements for regulated markets, regulatory reporting to avoid market abuse, trade transparency obligation for shares; and rules on the admission of financial instruments to trading.
MIFIR
MIFIR short for Markets in Financial Instruments Regulation is more than a directive. It is a European law and needs to be implemented as written. The member states have to comply with this regulation and the aim is to protect end consumers and markets. It unifies for example reporting and ensures that the reporting format is consistent.
The Markets in Financial Instruments Regulation and the Directive on Markets in Financial Instruments repealing Directive 2004/39/EC, commonly referred to as MiFID II and MiFIR, were adopted by the European Parliament on 15 April 2014, after heavy discussions that lasted more than two years.
MIFID II
MIFID II and MIFIR are building on the rules of MIFID I, already in place. The new rules are designed to take into account developments in the trading environment since the implementation of MiFID in 2007 and, in light of the financial crisis, to improve the functioning of financial markets making them more efficient, resilient and transparent.
MIFID II will be transposed into the national laws of Members States on July 3rd, 2017 and will apply within Member States from January, 3rd, 2018.
(Source: European Securities and Markets Authority (ESMA)
MIFIR reporting list
Implementing MIFID II and MIFIR will be a real challenge, as it brings enormous complexity for enterprises throughout the industry in terms of generating, collecting and processing financial data. We found a MIFIR reporting list, published by the London Stock Exchange Group, which is applicable not only in the United Kingdom.
In short they propose the following to firms to help them be in the best possible position for MiFIR reporting go-live:
More details can be found in the MIFIR reporting list of the London Stock Exchange Group.
There is little time left until the implementation, still much to do in the industry and it will involve considerable human resources and IT costs. The trading landscape will change significantly.
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