26 September 2018
Our take-aways from the Eurofinance conference in Geneva
Niels van Daatselaar
Wherever treasurers go, we follow. So when 900 treasures from large corporates as well as all major banks decided to attend Eurofinance in Geneva last week, TreasurUp had to be present. On a joint visit together with a delegation from Rabobank, these were our main take-aways:
Treasury departments are getting more strategic
The role of treasury departments in corporates is getting more strategic. Companies have to adapt so fast that liquidity is getting increasingly important. The boards of these companies rely on business intelligence to make sound decisions and treasury departments are well equipped to deliver that. They usually have to make a turnaround from weekly Excel data submission to key decisions data on liquidity and risk information. This also involves more airtime with top management.
In order to focus more on that, large corporates will likely outsource or automate the operational components and tasks of treasury departments in the next few years.
Most corporates are working on fully automating the payments and FX operations
Implementing company wide ERP/Finance software has been taken care of during the last decade. Now they start seeing the power of TMS layers. Most large corporates work with balance sheet hedging. They aggregate data from all worldwide offices. As there is always forecasting involved – e.g. for large one-off new orders or M&A transactions – the TMS data coming from ERP layers does not always suffice. Interpretation has to be added to complete the picture. Therefore: cash flow forecasting = ERP data + personal interpretation. The latter is usually sent to central treasury departments via email and Excel. The next big thing is rationalising and optimising this.
The key task is to move cash from certain locations/entities/accounts to areas where it is needed. For large companies with many international operations, legal entities and accounts, this can be a very difficult task. Therefore, most of them gather as much data as possible and then run delta and risk analyses. Implementing a new TMS layer is often much cheaper than connecting all kind of legacy systems.
When operational tasks have been automated treasury departments can focus on value adding strategic tasks to really make a difference in the company.