From the lens of a Treasurer: Challenges for a Corporate Treasury

Did you know that ‘Treasury’ was first used in ancient Greece to describe the buildings erected to house gifts to the gods?

Did you know that the Bank of Scotland started using the title ‘treasurer’ from 1695?

Did you know that that in early new England textile companies in the 19th century, the treasurer as the principal officer was more important than the company president?

Evidently, the corporate treasury function has evolved a lot since then!

Historically, the key focus of treasurers was around collections, handling and usage of cash and hence was called ‘Cash Management’. The corporate treasurer was usually seen as the bill payer of the company, the manager of cash flows but little else. As cash management got increasingly complex and involved bank relationship management, global cash currencies, liabilities, forex investments, and hedging, it began to be increasingly called ‘Treasury Management’. After all, cash is still the core and integral part of an enterprise treasury, right?

Today, the corporate treasurer’s key objectives are around efficient cash management, low cost funding and effective risk management. The corporate treasurer is a key decision-maker and strategic partner to the business, and typically handles debt management, capital management and regulatory reporting. While the expectations, role and responsibilities are increasing by the day, is the new age corporate treasurer equipped to handle all of these?

Some of the challenges that corporate treasures are facing today revolve around a lack of global cash visibility, lack of accuracy of global cash forecasts, multiple risk dimensions and direct / indirect impact of regulatory compliance. Lack of a long term ‘treasury strategy’, limited technology adoption and the prevalence of manual processing / use of spreadsheets / outdated technologies, multiple banking relationships, diverse ERP (Enterprise Resource Planning) systems and organization structures / silos within an enterprise all contribute to the challenges of a treasury.

Most treasury departments suffer from the same basic problem, “Deferred Maintenance”. Over the years as treasury topics evolved neither system nor staff received the necessary upgrades or training. The act of installing a state-of-the-art integrated global treasury platform, in a vacuum, can be a disaster in the making. Without appropriate assessment of staff knowledge and a defined training period the treasury staff will revert to making the new system look like familiar work flows, without fully understanding all the technical and strategic possibilities. The deferred maintenance problem is as much about staff development as system replacement. I think the best analogy I have heard is from a client, “Look if you give me a Ferrari and I’ve only ever driven a bicycle; do you suppose that just having the car makes me ready to race in a Grand Prix event?”

What are the other challenges you see from the treasury perspective? Would like to hear your views. Leave a comment to let us know.

About the Author

Tyrus Campbell has more than 30 years of experience in treasury, cash management, finance operations, portfolio management, capital markets, debt issuance, balance sheet and income statement responsibilities within global financial service organizations. Throughout his career, he has successfully led clients through the implementation of custom treasury systems and has directed seamless, off-the-shelf integrations. In his current role at Wipro, he works closely with customers to enable in treasury transformation initiatives encompassing treasury strategies, (re)-definition of business process and technology solutions.

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