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Treasurer's Role Broadens, and It Ain't Over Yet

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June 06, 2017

An AFP survey shows that the trend of treasurers being more strategic that started more than 10 years ago is still going strong.

football x's and o'sThe journey for treasurers going from bean counter category to the go-to strategic person in the company began more than 10 years ago and today that trend continues stronger than ever. That’s one of the key findings of the Association of Financial Professionals’ 2017 Strategic Role of Treasury Survey.

“Beginning in 2008, more than eight out of 10 respondents in successive Strategic Role of Treasury Surveys have indicated that the role of treasury has become more strategic,” said AFP in its survey report. “Since then, functions that were under the purview of the CFO have migrated mostly to treasury.” This includes creating capital strategies, maintaining rating agency relations (sometimes much to their chagrin, according to some NeuGroup peer group members) and leading the charge in capital markets activities. Lately, the role has expanded further, reports AFP. In their newest role “treasury may work with sales in developing properly priced contracts, and often works with supply chain management for constant access to vendors.”

These new roles have been growing especially during the last few years. And the AFP expects that new roles will likely come by the next survey. “80 percent of survey respondents report that treasury is playing a more strategic role at their organizations currently than in the past three years,” the AFP says, and what’s more this trend will likely continue.

What’s driving this growth in role expansion? AFP says economic uncertainty has continued companies’ focus on liquidity and cash management, two areas treasurers excelled in during and after the financial crisis. Management and company boards are also becoming more in tuned to the particulars of these two areas, says AFP.

“Over 70 percent of survey respondents report that the close attention paid by senior management and the Board to their companies’ liquidity and risk exposure is a primary reason why treasury is playing a greater strategic role in their organizations,” the AFP says. “Sixty-eight percent of respondents also cite the current importance of liquidity management as a cause for treasury’s enhanced strategic role.” Tech and automation advancements and larger share of profits and an overall organizational view of cash has also contributed to treasures’ expanding role.

AFP also lists where treasury is starting to take the lead:
• Borrowing: long-term (capital funding/sourcing) (cited by 79 percent of respondents)
• Investing long-term (61 percent)
• Payments strategy execution (both incoming and outgoing) (60 percent)
• Working capital management (e.g., A/R, A/P inventory) (54 percent)
• Capital planning/allocation (50 percent)

Where will it all take treasury in the future? An even wider role: 80% think the treasurer’s position “will grow further at their companies, and that the function will have a greater strategic role three years from now.”

Buckle up, as they say.

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