Is your treasury function evolving fast enough to keep up?
To address the challenges of our fast-changing world, the treasury function is expected to support the execution of the broader business strategy through a variety of initiatives.
In a changing technological landscape, treasury functions can help their organizations streamline processes to gain efﬁciency, lower costs and enhance control levels through automation. Keeping up-to-date with new developments driven by FinTech companies and the standardization, coordination and simpliﬁcation of treasury processes are crucial to support daily business. Developing a clear and progressive treasury IT-road map, confirming that system interfaces work seamlessly and creating a maturity review of the existing landscape are a few ways to improve the treasury management function.
Managing accounting and controls
Changes in accounting and reporting standards have an immediate effect on the treasury function. Organizations should understand and apply the appropriate accounting methods to manage businesses globally as well as domestically.
Transforming treasury operations
It is important to establish a robust organizational structure with a clearly deﬁned and forward-looking governance model. Several strategic roles could be adopted by the treasury department, which include moving away from acting as a cost center and becoming a value-adding service center, improving working capital management, and implementing automation to make the transaction process more efficient.
Executing corporate transactions
Organizations continue to pursue strategic transactions to enter new markets, expand product lines, rebalance business portfolios, sell non-core assets and improve operating models. Treasury functions are increasingly involved in identifying, planning and executing these strategic transactions. This requires a combination of treasury technical knowledge, experience in executing strategic transactions, availability of already scarce resources to support each transaction, integration with other functions, and an effective project management approach. Not being able to meet these requirements can result in missed opportunities to boost company value.
Leveraging treasury analytics
In an ongoing era of risk and uncertainty, insufﬁcient identiﬁcation, monitoring and management of market price risks can result in volatile ﬁnancial results, ﬁnancial loss and reputational damage. The treasury function is uniquely positioned to address these risks by leveraging analytical tools. This helps protect assets, inform business decisions, unlock cash, finance the business and invest cash.
Evaluating specialty treasury activities
The treasury function is increasingly taking on new responsibilities, such as establishing payment entities, factoring receivables, or managing benefit plans and real estate portfolios. In this situation, it is critical to identify opportunities to improve the value the function can create, and work toward establishing the necessary capabilities.
When making decisions about your treasury department’s objectives, it is important to consider the impact of each decision on both the function and the organization as a whole. The treasury function is what provides the visibility into liquidity positions, settlements, forecasts, exposures and risk management of an organization. It is one of the most critical functions of the business and will continue to be so for the foreseeable future.