April 14, 2011
Core Treasury Functions Rise to the Fore
Business-centric Activities Play Second Fiddle
When members of The NeuGroup’s Tech20 came together in November for their 10th annual meeting, discussions surrounded key treasury value-driver issues. Notably, treasurers have been focusing on core treasury concerns, like efficient shareholder distribution of cash. Discussions included:
1) Treasury Value Drivers. Core tech treasury activities lately have trumped value-added business dialogue.
Key Takeaway: Getting the core activities right in the first instance also enhances treasury’s ability to pursue business support activities.
2) Treasury Organization and Staffing. The group runs the gamut in terms of treasury size. If a treasury is small there are ways to leverage outside help to get the job done.
Key Takeaway: Several members use investment banks to help with things like accretion/dilution as well as dividend policy analysis.
3) Cash Investments. A discussion of members’ adjustments to cash portfolios, and a member's summary of proposed Accounting for Financial Instruments rules.
Key Takeaway: Several companies noted that they had begun disclosing the percentage of cash offshore vs. onshore to help drive the point home to investors that not all of their cash is available.
4) Channel Finance. A discussion of cash to fund working capital and ways to offer financing to customers or suppliers.
Key Takeaway: Standard terms can be adapted to local environments (e.g., 30 days at end of month, or longer terms in Italy and India).
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