Cash & Liquidity ManagementCash ManagementCash ForecastingUsing Cash and Treasury to Improve Business Performance

Using Cash and Treasury to Improve Business Performance

The fifth annual BNP Paribas Cash Management University, which attracted more than 160 corporate delegates from around the world, outlined the pivotal role of the treasury team and illustrated how cash management projects have transformed businesses globally. The treasury department has never been more important to its company and liquidity and intraday reporting positions – which are now closely monitored – have become critical to business performance. On the banking side, tight cash management has become fundamental and the more a bank can offer, the more attractive it will be to its customers.

The penultimate session of the conference presented an excellent roundtable debate, posing important questions about how best to use cash and treasury to improve business performance. The session was moderated by Helen Sanders, editor, TMI, and included corporate treasurers from various sectors across Europe.

Panel members:

  • Siri-Anne Dos Santos, Head of Cash Management Operations, Yara International.
  • Marie-Astrid Dubois, Assistant Treasurer Europe, Middle East and Africa (EMEA) and Asia, Honeywell.
  • Karen Van den Driessche, Treasury Director EMEA, Avnet.
  • Pierre Fersztand, Global Head of Cash Management, BNP Paribas.

Treasury Expectations

It is clear that today’s treasury function is far more integral to the running of a corporate than it ever was prior to the financial crisis, and treasury teams increasingly shoulder responsibility for a corporate’s financial needs, risk and cost structures. To kick-start the session, the panel members were asked how expectations of the treasury function had evolved and what was expected from treasury on a day-to-day basis.

Honeywell’s Dubois began by describing how having a clear strategy and vision is extremely important – particularly as the treasury role comes with no direct authority to mandate business actions.

Dubois also stressed the importance of having access to capital market information, to ensure the treasury team was abreast of the very latest ratings actions and could advise the business from an informed position.

Dos Santos echoed this position and outlined how a centralised treasury department has been viewed as more and more fundamental to the business since the 2008 crisis. According to Dos Santos, it has become increasingly important for corporates to adopt a centralised solution enabling them to control cash all over the world, as visibility is now crucial to survival. Treasury has therefore garnered a far more important role within the business as its function and performance – specifically in terms of cash flow forecasting – becomes a crucial indicator of business performance.

For Avnet’s Van den Driessche, it has taken time for treasury to be seen as a true business partner. She explained how it is crucial to build trust with the chief financial officer (CFO) and make a long-term commitment to the relationship so the very best ideas can be put forward and discussed.

She added: “Essentially, the expectations of treasury are also driven by treasury, who are keen to demonstrate the value they add.”

It is clear from the above discussion that as more corporates strive to accelerate and implement cash management projects and many are undertaking technical migrations, such as moving to SWIFTNet, treasurers have a number of opportunities to involve themselves in complex business initiatives.

Delivering Improvements via Treasury

The treasury department often delivers significant improvements and Dos Santos described one such project where Yara Interntional set up a combined collection and payment factory to centralise their processes. There had been many obstacles – mainly on the communication and security side – and so the company integrated its payment and collection system using SWIFTNet. This meant that every transaction which went out to the bank via the payment factory was much easier to process.

As a secure, standardised global platform, SWIFTNet easily integrates into corporate treasury management and enterprise resource planning (ERP) environments. The system helps to streamline operations, while at the same time reducing costs and increasing transparency.

“Using zero balancing in all countries where it was legally available meant it did not matter if there were a lot of collection accounts as we could channel the funds,” said Dos Santos. “In Scandinavia it is possible to have structured information on payments that can be processed directly through a payments factory. In those countries where it’s not possible we have to post information manually and we manage this via a shared service centre (SSC).”

Van den Driessche explained how most treasury departments are looking to move to centralised systems in order to standardise processes and create efficiencies. Often it is a case of convincing the rest of the business unit of the need and benefits of such projects.
Customers are not loyal by nature and they still buy what is cheapest. By trying to extend payment terms to customers we can offer a better service,” added Van den Dreissche. “Does the supply chain finance (SCF) technique contribute? Yes. It’s a way treasury can support the base objectives, but the main question remains “how does this impact our risk”

“All treasurers are trying hard for their business,” agreed Dubois. “By helping the business understand how new geographies work, ensuring there is good communication and sharing our findings we can contribute positively to our organisation.”

Honeywell are also in the midst of setting up a payment factory and believe treasury has to work for the business. After all, says Dubois, “treasury is a discipline which should exist across business.”

For treasury departments, it is clear that technology is a major enabler and plays a vital role in all of the above processes of such projects. Systems have changed the nature and structure of treasury departments and it is difficult to imagine a company moving from a decentralised treasury environment to a centralised one without the use of technology to perform the tasks necessary to achieve centralisation.

How Can Treasury Achieve Great Results?

Treasury departments who demonstrate best practice use controlled, transparent processes to drive, manage and document treasury workflows. It is these best practices, coupled with technology and other innovations, which drive corporates forward and help achieve great results.

Van den Driessche believes that internally it’s about building trust across the organisation and not working in silos. She added: “Banks can also help in many ways, by putting the right technology elements in place and by making a long term commitment, coming up with ideas that genuinely help us. Conferences such as this one help us to understand what is really going on in the market.”

For Dos Santos it is the remittance information coupled with the payment that is crucial. Yara International has achieved a 90% straight-through processing (STP) rate for outgoing payments. However, on the collections side this figure is closer to 55%. “We wish to improve on our collections STP rate and really the banks can help with this,” she said.

Dubois explains how it is very important to choose the right banking partners: “We need to have a banks with a long-term commitment to cash management. We need to have the right organisation structure in place because sometimes we need immediate access.”


Trust and communication are important attributes for treasury departments worldwide. The treasury job is mainly project driven and it involves selling ideas to others within the company. In most cases, it depends on a relationship of trust between the bank and the company. Flexibility is also very important; a corporate can create a giant global SSC, while at the same time retain local relationships when needed.

Making a technological investment is critical to the future of the treasury department. The buzz words are clear: service, innovation and technology.

It is clear that the role of the treasury department is streamlining, and managing liquidity and risk have become extremely important day-to-day tasks. The current economic crisis has brought plenty of uncertainty and risk, but there is good news. Treasurers already have experience of managing a crisis.

Treasurers will need to continue to focus on contingency planning and processes to be flexible enough to respond quickly to changes in their landscape. There are tools available which can help, such as web-based portals which give visibility across assets, SWIFT connectivity and format standardisation, as well as e-commerce tools which can improve the opportunities for doing business.

The role of the banks is to encourage and lend support and the right banking partner will help you achieve your goal and offer you a competitive advantage.

Related Articles

Spoilt for choice: making sense of cash flow forecasting options in 2019

Cash Forecasting Spoilt for choice: making sense of cash flow forecasting options in 2019

5m Nash Riggins
Four skills for effective cash forecasting

Cash Forecasting Four skills for effective cash forecasting

6m Martin Gillespie
As year-end approaches: how to improve covenant forecasting processes

Cash Forecasting As year-end approaches: how to improve covenant forecasting processes

7m Conor Deegan
How to set up a cash forecasting process: a practical guide

Cash Forecasting How to set up a cash forecasting process: a practical guide

10m Conor Deegan
How to forecast cash flow: what software should I use?

Cash Forecasting How to forecast cash flow: what software should I use?

1y Michael McCaw
Four key conditions for high value cash forecasting

Cash Forecasting Four key conditions for high value cash forecasting

1y Martin Gillespie
10 minutes with treasury: CBRE’s Catherine Porter

10 Minutes With The Treasury 10 minutes with treasury: CBRE’s Catherine Porter

2y Victoria Beckett
How treasurers can use AI to simplify invoicing

Accounts Receivable How treasurers can use AI to simplify invoicing

2y Victoria Beckett

Whitepapers & Resources

Are You Ready to Implement your GRC Solution?

Are You Ready to Implement your GRC Solution?

Netting: An Immersive Guide to Global Reconciliation

Netting: An Immersive Guide to Global Reconciliation

Mitigating Costs and Exposure - A Multilateral Netting White Paper

Mitigating Costs and Exposure - A Multilateral Netting White Paper

Cyber Fraud and Treasury - How to Stay Ahead of Emerging Threats

Cyber Fraud and Treasury - How to Stay Ahead of Emerging Threats