Blog – 3 Column

DOES YOUR TREASURY HAVE A DIGITAL MINDSET?

DOES YOUR TREASURY HAVE A DIGITAL MINDSET?

This article is written by Pecunia Treasury & Finance B.V. In an previous article I have talked about the IT changes that make life easier for a treasurer in the future (or now already). In this article I want to talk about the digital mindset of the person using the IT – the treasurer. Treasury is a numbers game. We treasurers use these numbers to optimize the cash or risk of the company. We make money with money. These numbers have to come from somewhere in the organization and it is usually never treasury itself. BIG data Big data is a hot topic in treasury but for treasury it was around longer. The treasurer needs to get their input information for all over the company. Cash inflow from sales, cash outflow from procurement and investment teams, HR etc. All this data needs to be gathered. The digital minded treasurer thinks about optimal ways of gathering this data: automatically. The treasurer starts its day with the actual cash balances and then looks forward. They basically need to predict the future. How great would it be if all this data would be available with the push on a button. An ideal world ? Maybe, but it is possible. Bank statements can be automated to be loaded collectively or in a Treasury Management System. The treasurer starts the day with up to date cash balances, and he has not started working yet as this was automated. He then updates the cash forecast. How? By pushing update in his cash forecasting system. Sounds too easy? True, it took weeks to find out where to find the needed input information and to automate getting this data grouped together and in a structured way. But a digital minded treasurer knows that the data is somewhere in the organisation; it only needs to found and linked to the treasurers information recourses so it is always available. The treasurer only has to check the validity and the quality of the data and see if it needs improvement. In this way the digital minded treasurer can automatically create a cash forecast and continually improve it. A cash forecast should be ready before the second morning coffee. In an ideal world it would be ready with a push on a button. Artificial intelligence makes it possible. The digital minded treasurer is steering it. Process improvements The digital treasurer looks at ways to improve its document flows and payments. Not only looking at costs but also looking at how many (manual) interventions are needed. FX deals can be setup to straight through processed (STP) while blockchain would make it possible to improve the speed of payments or document flows globally. Everything is connected, as payments go from a process to straight through and instant it has an immedicate effect on the cash availability and forecasting. While now the bank is the place to go for bank accounts and payments this might not be the case in 10 years. The digital treasury might be able to setup his own bank in the future. By using technology. The future The treasurer makes sure that he is on the steering wheel while technology makes it possible for him/her to check his surroundings so he does not crash. A bigger front window makes for a better view forward (forecasting), a higher max speed makes for quicker travel (updating changes in forecasting), adaptive cruise control saves effort on speeds control (automatic updating and AI, STP). The treasurer knows he needs to keep the engine running to keep moving. He also realizes that he does not need to be a mechanic to do this; however he needs to be able to tell the mechanics quickly why the car is not moving as the treasurer wants it to be so the mechanic can fix this. Or maybe the digital treasurer might change the car for a plane in the future, or even a rocket? It is clear that technology and treasury are interconnected. Already now and even more in the future. A treasurer therefore needs a digital mindset to survive and keep up with the information needs of his department and the company as a whole. And it’s not rocket science (yet). Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.

How to Explain RPA To Your Granny

How to Explain RPA To Your Granny

This article is written by: Automation Boutique Remember when children used to believe that there was a tiny man inside the radio speaking? Or when they checked the back of the TV looking for the show host? We are back to those days, and again, it is due to a new technology: Robotic Process Automation (RPA). Where is the robot in robotic process automation? The robot is not a physical one. There is no metallic little man walking around and clicking buttons inside the computer. The “robot” is just a set of instructions that the computer follows on its own, without the need for a human to do it. Your granny will surely remember when people used to grind corn into flour by using water mills propelled by a nearby river. That is automation. The movement of the mill (whose energy was supplied by the passing water current) could be called a robot. You see, the robot is not the mill itself, which would be equivalent to the computer (as the water current would be to electricity). The robot is the virtual (not physically existing) “executer” of the automated action, in this case, milling. We could imagine a little man pushing the mill incessantly. In the RPA world, we call this imaginary man a robot. What does this “automation” thing mean? Automation consists of mechanising actions so that they can be executed without the need for a human to be present or to spend time and effort on them. Put simply, automation is making someone or something else do it for you. Remember when previous generations built a scarecrow using straw and their granny’s hat to keep birds and wild boars away from plantations (as grandma can tell you, birds and wild boars love to destroy grain fields)? Imagine having to do that yourself: being out all night posing in the darkness to keep those naughty beasts away from your corn! That is not what the old generations did. Instead, they automated animal scaring. After understanding who the “robot” is and what automation means, we can move on to the only word left: process. What is this mysterious process that is being automated? In the case of a watermill, the process is grinding corn into flour. In the case of a scarecrow, the process is, you guessed it, standing in the field day and night while looking scary. In RPA, the process could be typing (writing on the computer, in case grandma is giving you a funny look) to send an email (a letter sent over the internet), or it could be going to a website (a website is like one of those internet places where your teenage grandson appears on pictures sticking his tongue out) and finding some information in it. All of this, or any other pre-defined, repetitive, and rule-based computer tasks, can be automated, just like previous generations automated grinding and scaring animals away. In automation, rules can be as complex as needed, but must leave no room for ambiguity. If ambiguity cannot be avoided, hyper-automation is required, which is, judging by Granny’s face (see picture above), best left for after naptime (and a whole other article). So here we have it. Robotic Process Automation: We use a robot (imaginary little man or, more seriously, a set of instructions given to a computer) to take a process (some work to do, usually divided into discrete steps) and automate it (do the work for us). Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.

How does physical cash pooling & target balancing work with a TMS?

How does physical cash pooling & target balancing work with a TMS?

This article is written by Nomentia Cash pooling is a popular solution for balance netting to provide better access and visibility to the group’s liquidity position through a real-time, cross-border, and multi-currency structure. It can be an integral part of a group’s cash management strategy, together with target balancing to have the ability to mobilize cash across the entire group. What Is Cash Pooling? Cash pooling is a cash management method for optimizing cash balances within a group. There are two different main approaches to pooling: physical cash pooling and notional cash pooling. In this article, we focus on physical pooling. To put it simply, in physical pooling, the HQ (parent/holding) company works as a hub for collecting the excess cash from entities and distributing the cash to entities that are short on cash. Obviously, there are many different aspects that corporations should take into consideration when pooling cash, like taxes and legal obligations, which are left out of this article. In many organizations, the treasury function is in charge of cash pooling processes and agreements. Many banks provide different pooling options, but we will focus on the process where cash pooling is managed within the group. The benefits of having control of the cash pooling in-house are many. Having cash pooling functionality in the Treasury Management System (TMS) will create independence from banks, making the system bank-agnostic while covering any currency. The technical setup for physical cash pooling In the current economic environment, we have recently witnessed a considerable change in interest rates and currency fluctuations. This is one of the reasons why corporations are constantly searching for solutions to manage cross-currency and multibank cash pooling options. Additionally, corporations are interested in calculating the pooling need with intraday information instead of end-of-day balances. What is then needed for the technical setup of the cash pool? Obviously, some change management and internal communication are necessary before starting to create the technical setup for a new cash pool. Setting up cash pooling should be easy; you should be able to choose the desired balance per bank account. Furthermore, you should be able to define tolerances for the desired balance as well as payment types for the execution and the HQ’s counter account. Particularly when starting with cash pooling, the corporate treasury should have the option to start cash pooling manually, and then when the process is fully in control, they should be able to automate it. There are always different Treasury policies and practices in different corporations. Therefore, executing the actual sweeps or tops should be possible with Straight Through Processing or by using as many approvals as needed. Identifying balance transactions in bank statements should be an easy task. Cash pooling and in-house bank (IHB) Above, we discussed cash pooling and the practical setup for it. Many of you might have noticed that the “intercompany loan” between HQ and entities was not discussed in detail. In this chapter, we focus on handling that part efficiently. Imagine a situation where excess cash is swept from an entity bank account to an HQ bank account. This creates an intercompany loan. There are multiple ways to book the loan, and next, we will focus on utilizing an in-house bank for that purpose. An in-house bank typically contains one or more accounts, which we call member accounts, per participating entity. Every transaction that hits these accounts will be mirrored to the HQ mirror account. Typically, interest is calculated for the accounts, and in advanced systems, withholding tax is included when applicable. When combining in-house cash pooling and in-house banking, the obvious result would be to allocate the sweep and top transactions to an entity’s in-house bank account. This would mean that any cash pooling transactions could be found on a member account and the Treasury could automatically calculate interest for the intercompany loan as desired. One might ask: How do I allocate the pooling transaction to the entity’s member account? The answer is twofold: firstly, the TMS needs to make sure pooling payments have some individual information that the bank is reporting back and secondly, a sophisticated in-house bank system should have a dynamic way of identifying pooling transactions from potentially thousands of transactions. Target balancing for centralizing a single company’s cash in a multi-bank environment There are regions where even the smallest corporations have several bank accounts in several banks operating in just one country. The basic idea here is to have one or two main banks and the others will just provide a vehicle for collecting customer payments. In such a case, it might be interesting to sweep the extra cash from the collecting accounts to an optimized bank account owned by the same entity. This method is similar to cash pooling, but in this case, the counter account is not an HQ account but a different account owned by the same company. The arrangement, of course, also works for cross-border and cross-currencies, as no intercompany balance is created. Target balancing with an in-house bank or a hybrid approach In this blog, we have discussed how in-house cash pooling and even target balancing for a company can be done. Some corporations might even consider combining bank-offered cash pooling and in-house cash pooling in a hybrid structure. In such an arrangement, bank accounts belonging to the same cash pool are balanced by that bank and top accounts are managed by the TMS. Perhaps in the future, we will discuss how target balancing could be used in bilateral in-house bank settlement clearing or how intra-day cash forecasting could be used in physical cash pooling. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.

The life of an interim treasurer

The life of an interim treasurer

This article is written by Pecunia Treasury & Finance B.V. We can be “normal” treasurers: Being an interim treasurer is a bit like being a regular treasurer, but with a twist. Instead of settling into a long-term position, you’re the flexible solution, stepping in when needed due to someone leaving or falling ill. These stints typically last anywhere from three to six months, sometimes even stretching to a year. During these assignments, you become an integral part of the organization, taking on the day-to-day responsibilities until a more permanent replacement is found. However, there’s an inherent uncertainty that comes with each new assignment. You never quite know what challenges or dynamics you’ll encounter until you’re knee-deep in the role, and that unpredictability is just part of the life of being an interim manager. Or consultants: There’s another facet to this role: providing treasury support. This involves lending a hand to existing teams or individuals working on treasury-related projects. These projects can range from short-term tasks to more extensive undertakings that demand specialized attention. Often, the existing team lacks the bandwidth to tackle these projects alone, or there’s a pressing deadline looming. For instance, I once assisted a large organization in Rotterdam with delving into embedded derivatives to ensure compliance with new regulations. Within a few weeks, we had the project wrapped up, and my findings were integrated into the annual report. Another project involved constructing a RAROC (Risk-Adjusted Return On Capital) model for a client, enabling them to evaluate the profitability and risk associated with different banks and lending practices. Even implementation managers: Moreover, an interim manager in the treasury realm often wears multiple hats, extending beyond traditional financial roles. For instance, they might serve as implementation consultants for Treasury Management Systems (TMS) or payment hubs. This requires not only a deep understanding of treasury operations but also technical proficiency. Interim managers with expertise in these areas can guide organizations through the complex process of selecting, customizing, and integrating these software solutions into their existing infrastructure. By leveraging their technical skills, they ensure seamless transitions and optimal utilization of these systems, ultimately enhancing efficiency and accuracy in treasury operations. Or parttime: But the role doesn’t stop there. Sometimes, especially in smaller firms, a full-time treasurer isn’t feasible. Instead, the CFO or controller might double up on duties, handling Treasury responsibilities on a part-time basis. This is where a part-time treasurer, like myself, can step in. By taking on the treasury tasks, I free up the CFO’s time for their core responsibilities while bringing in expertise tailored to the treasury function. For instance, I once assisted a real estate company with valuing their interest rate derivative portfolio, managing their cash flow, preparing Treasury reports, and handling any ad hoc issues. All this was accomplished within eight hours a week, allowing the company to benefit from specialized expertise without the need for a full-time hire. Or we do a Treasury or FX scan: If you’re unsure whether your company’s treasury practices are optimal, a treasury scan or FX scan could be the answer. This involves conducting a thorough evaluation of the existing Treasury & FX processes and practices, identifying potential areas for improvement. A quick and dirty scan can be completed in just one day if the necessary data is provided in advance. While there’s a cost associated with the scan, it’s often outweighed by the savings generated from implementing the identified improvements. Plus, these savings can be realized either by the company itself or through continued collaboration with a flexible treasurer like myself. For more information about the scan or if you are in need of an interim manager in Treasury, please contact Pecunia. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.

6 BENEFITS OF INCORPORATING FX HEDGING SOLUTIONS

6 BENEFITS OF INCORPORATING FX HEDGING SOLUTIONS

This article is written by GPS Capital Markets As companies expand and start doing business internationally, they often engage in cross-border transactions, exposing themselves to currency exchange rate fluctuations. Currency exposure risk is an inherent outcome of engaging in the FX market. This uncertainty can impact transactional cash flows, making it imperative for corporations to employ effective risk management strategies. One such crucial strategy is Foreign Exchange (FX) Hedging. It is crucial to understand that the purpose of hedging practices is not profit generation. The primary goal is to safeguard the company and prevent significant financial losses. So, what is FX hedging? FX hedging involves the use of financial instruments to offset or reduce the risk associated with currency exchange rate movements. There are a variety of common instruments corporations use to hedge, such as forward contracts, options, swaps, and netting. We’ll dive in further on these individual instruments later. The Role and Benefits of FX Hedging There are significant benefits that come along with the time and implementation of having GPS Capital Markets come in and advise each of its clients about their FX exposure risk. Let’s discuss why this is such an important aspect of how each multinational corporation does business. Hedging your cash flows is crucial to managing financial risks and ensuring stability and predictability by protecting the company from adverse movements. Hedging can also allow for better budgeting and financial planning, as it provides a degree of certainty for future cash flows. This is particularly important when dealing with international transactions, where you can be subject to significant fluctuations and need to protect your profit margins. Better predictability also leads to greater confidence in management to make strategic decisions related to investments, expansions, and other business initiatives. Something often not considered is the benefit of improved relationships with creditors, which leads to potentially lower borrowing costs. Creditors love the predictability they can see with future cash flows. Lastly, hedging activities are often subject to accounting and regulatory standards. Properly executed cash flow hedging can help the corporation comply with these compliance standards and provide accurate financial reporting. In summary, 6 of the main benefits of incorporating an FX hedging program are: 1. Risk Mitigation 2. Financial Stability 3. Budgeting and Planning 4. Protecting Profit Margins 5. Enhancing Creditworthiness 6. Compliance and Reporting Hedging Instrument Definitions Knowing the overall benefits FX hedging can provide to corporations, let’s define each of the different hedging instruments that are commonly used among GPS clients. Forward Contracts: A forward contract is an agreement between two parties, a buyer and seller, to exchange a specific amount of currency A for currency B at a future maturity date. The exchange rate (forward rate) is determined at the time of entering the contract and reduces exposure to fluctuations in currency rates. Options: An option is a financial derivative that gives the holder the right, but not the obligation, to buy or sell a specified amount of one currency in exchange for another at a predetermined exchange rate (the strike price) within a specified period of time. There are two types of options commonly used, a call option and a put option. Call Option: A call option gives the holder the right to buy a specified amount of the base currency (the currency being bought) at the agreed-upon exchange rate (strike price) before or at the option’s expiration date. The seller (writer) of the call option has the obligation to sell the specified amount of the base currency if the holder chooses to exercise the option. Put Option: A put option gives the holder the right to sell a specified amount of the base currency at the agreed-upon exchange rate (strike price) before or at the option’s expiration date. The seller (writer) of the put option has the obligation to buy the specified amount of the base currency if the holder chooses to exercise the option. FX options have a specific expiration date, after which the option is no longer valid. The holder must decide whether to exercise the option before or on the expiration date. Unlike forward contracts, options provide the holder with the flexibility to choose whether or not to exercise the option. If market conditions are favorable, the holder may choose to exercise the option; otherwise, they can let it expire. So, you wonder, why wouldn’t you always take the more flexible route and always book an option? There is a premium that is paid to the seller for the right to exercise the option. It is the cost of purchasing the option and is determined by the exchange rate, time till expiration, and market volatility at the time. Swaps: FX swaps or currency swaps refer to two different ways of managing forward contracts. The first one is when a company has a forward booking for a future date and needs to change the value date of that contract. In this situation, you can move the value date forward or backward with an FX currency swap. The second example involves changing the amount of a forward contract that a company has on its books. If a company needs to reduce the amount of a contract, they can sell the currency forward to reduce the outstanding amount of their hedge. This can be very beneficial for managing cash flows and financing needs in different currencies. Currency swaps are often used by multinational corporations to obtain a desired currency for a specific period without engaging in a spot foreign exchange transaction. This can be very beneficial for managing cash flows and financing needs in different currencies, without having to incur a transactional cost. Netting: Netting in the context of foreign exchange refers to a process that allows market participants to offset or consolidate multiple transactions or positions involving the same currencies, resulting in a single net amount for settlement. Netting can help reduce credit and liquidity risk by consolidating obligations, as well as reduce administrative complexities and costs for a corporation. Implementing FX Hedging Meeting with an FX advisor from GPS Capital Markets can…

Pitch Perfect: Your Way to Treasury Tech Approval

Pitch Perfect: Your Way to Treasury Tech Approval

This article is written by Cobase In the quest to secure approval for Treasury technology investments, the journey from a rough concept to a refined, boardroom-ready proposal is critical. Drawing on the wisdom of industry leaders and management consultants, this article unveils key strategies to craft a Treasury Tech proposal that not only resonates with CFOs and board members but also stands out as a strategic asset. Understanding Boardroom Dynamics Before diving into the specifics of the proposal, it’s crucial to understand the mindset of those who will be evaluating it. Board members and CFOs are primarily focused on strategic alignment, risk management, and ROI. Your proposal should speak to these elements in a language they understand and appreciate. Key Strategies for a Winning Proposal Advanced Communication Strategies Engaging with Emotional Intelligence Leveraging Influencers and Allies Addressing Concerns Proactively Conclusion Crafting a Treasury tech proposal that dazzles in the boardroom is an art that combines strategic alignment, data-driven insights, and a clear understanding of stakeholder priorities. By incorporating these industry-leading strategies, you can refine your proposal from a rough concept into a compelling, strategic asset that is hard to overlook. Remember, the goal is to not just secure approval but also to position the Treasury function as a key contributor to the organization’s strategic vision. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.

OPEN: Treasury Mastermind BOARD position

OPEN: Treasury Mastermind BOARD position

🌟 Join the Treasury Masterminds Board! 🌟 Are you a seasoned treasury expert with a passion for innovation and collaboration? We’re assembling a powerhouse team of treasury professionals to join our exclusive Treasury Masterminds board, and we want YOU! As a member of the Treasury Masterminds board, you’ll have the opportunity to showcase your expertise and be featured as a keymaster in the world of treasury management. We’re seeking individuals with diverse skill sets and regional perspectives, ensuring a dynamic exchange of ideas and insights. What’s in it for you? If you’re passionate about shaping the future of treasury management and eager to share your expertise with the world, we want to hear from you! Apply now to become a part of the Treasury Masterminds board and make your mark on the industry. Interested? Let us know and apply today! Notice: JavaScript is required for this content.

Why AI will not Take our Jobs

Why AI will not Take our Jobs

This article is written by Automationboutique AI has the potential to automate 60–70% of tasks that employees do today, as estimated by McKinsey & Company in June. But is AI set to replace the majority of jobs? No, it isn’t. A new MIT study sheds new light on the role of AI in automating jobs. The MIT researchers analysed the tasks AI would need to perform to replace jobs. They found that, while AI could technically handle specific tasks, the financial investment is currently too high for most companies. For example, a case study the researchers did shows that automating a part of a baker’s job using AI will be way more expensive than the savings the bakers get from the automation itself (… we think the 🤖 loaf might not taste as good either). This is a situation that we encounter regularly. In those cases, we don’t just look at what can be automated; we carefully weigh whether it should be, economically and ethically. If things don’t add up, we don’t push for automation. It is about finding that sweet spot where humans and AI collaborate, each doing what they do best, improving the workplace, not diminishing it. Having strong principles in place can make all the difference in making the most of new technology. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the

THE IT-SAVVY TREASURER

THE IT-SAVVY TREASURER

This article is written by Pecunia Treasury and Finance We cannot switch on the news without hearing about technological advancements that, supposedly, make our lives easier, better, or smarter. We all embrace them, get used to them, and cannot do without them anymore. Sometimes we think back to the time before these advancements and cannot imagine how we lived without them. The same applies to the Treasury. I am 35 years old; my experience in treasury was always linked to IT. I sometimes hear stories from older treasurers who worked without computers, later tabulating or punching cards, and still managed to do a good job in their field. Of course, times have changed; information is faster than it is these days, as is the need to process it. We all had to embrace the new technology. In this blog, I will try to analyze the link between IT and the Treasury and try to make predictions about the future, or at least where I wish the future would go (in Treasury terms). Payments In the old days, payments were a manual process, with people entering them into the banking system or sending them to the bank via fax. Nowadays, we link our ERP system with the banking system and have a batch file automatically added to the bank. With bulk payments, a payment hub can be used, which will make the whole process bank-independent, fast, and cheap. If wanted and needed, the whole process can be made straight-through by automating it from creating a payment to approving it. The future will make payments even faster (instant payments should be possible in the Sepa region from November onwards), cheaper, and more bank-independent (PSD2 regulation allows non-banks to link with your bank and provide payment services). Maybe we will be using our Facebook account for payments sooner or later. Bitcoin could be an alternative payment currency and/or be used to hedge non-deliverable currencies (to achieve this, volumes need to increase significantly). Risk management An important part of the treasurer’s work is risk management. Hedging FX, interest rates, and commodity prices is daily business for a treasurer. Doing the deal is easy; doing the right deal is more difficult. A treasurer can only hedge correctly if he knows what he is hedging: exposure. Knowing the exposure information of the business is key. The reason for the exposure originates in sales (FX) or procurement (FX and commodities). These departments need to be aware that the actions they take might have consequences for the treasurer, and therefore the treasurer needs to have some information. I have been at companies where sales were daily, generating a lot of USD exposure at a EUR company. They were supposed to let finance know about positions. Often, this was done at day’s end or forgotten and done a day later. Result: an exposure to USD without the treasurer knowing it; a risky position. IT helped to fix this. Sales entered a deal in a program, and the relevant FX exposure was automatically shared with the treasurer via an API to the Treasury Management System. The treasurer could decide directly whether he needed to hedge or not and even aggregate deals to get better rates at the bank. For small deals, a link was set up with an FX trading platform to STP them at the best rate. The future of risk management will be even more automated within the company (internal), but also with connections to banks and risk solution providers. Prices are becoming more transparent due to the fact that bank-independent solutions are available that compare prices in real time. Risk management sales are becoming less of a bank business. Brokers are having fewer hurdles to enter the market, due to IT platforms in the cloud. Why pick up the phone and call your bank for a EUR/USD quote when you can compare prices via an online platform and directly trade them? Often, you don’t even have to settle via your own bank accounts, but you can have it directly sent to your customer or supplier. For trade finance, blockchain will become the new standard. The financing and shipping of commodities is a rather paper based process that is inefficient and slow. Blockchain could automate and improve speed massively. The challenge to achieve this is big as there are many parties involved, but initiatives have started, so the future is beginning now. Information As the above examples show, information is key to a treasurer. Even more so, as the Treasury is often a small team and most of the information comes from other departments. To get this information, the treasurer can use several nice IT solutions. The ERP system helps, but the Treasury needs to know where to find the information. A treasury management system is often used to sort all treasury-related information. TMS can link with ERP systems or other systems to gather information. The TMS will sort this information so that the treasurer is well informed and can make decisions. When I started in Treasury 10 years ago, the market for TMS was small; systems were expensive and limited in use (payments only, FX only, etc.). Nowadays, a TMS does not have to be expensive anymore. A SME (small or medium enterprise) could use it to upgrade their Treasury information. Most TMS can be used for all aspects of treasury (cash management, risk management, corporate finance, guarantees, etc.). This will give the tech-savvy treasurer an edge. The treasurer with the most information can make the best decision. In treasury, taking decisions while being well-informed often means either cost savings (e.g., a better cash position, lower working capital) or lower risk. The IT-savvy treasurer contributes to an optimally functioning company; they should be considered a business partner; he knows your cash position, your risk position, and your balance sheet, hopefully in real time at all times. Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more…