Whether it’s an acquisition, spin-off, geographical expansion or new strategic alliance, treasury brings important value to an initiative’s success. But how is that message effectively conveyed to the C- Suite? At a fall meeting of the NeuGroup’s Treasurers’ Group of Thirty, several members shared how they have secured a regular seat at the strategy table, as well as examples of the value they have brought to specific initiatives.
The financial-crisis boon? One member speculated that a positive result of the financial crisis was more recognition of treasury’s importance. Until then, he said, senior management had overlooked the importance of shoring up FX and stabilizing the company’s capital structure. Treasury stepped in to lend its expertise to the business units, which had seen significant layoffs, as well as to the M&A function to determine whether acquisitions made long-term, strategic sense. “So treasury became this internal partner to the businesses,” the member said, adding, “If you really want to be a strategic partner, take on things that no one else wants to deal with,” like cash forecasting.
Ground control to senior management. Sometimes management needs more sober assessments of what’s happening in the real world when it comes to financing. Thus, the disconnect between management’s strategic planning and real-world numbers highlights the importance of treasury taking on a strategic role, according to another treasurer at the meeting. FP&A’s rosy forecasts were tempered by treasury’s realism, stemming from actual company results and provided senior management with a warning bell about the need for adjustments before addressing the Street. “We helped the management team see the need to have treasury involved in the strategic view,” the treasurer said.
Still despite its growing importance, treasury isn’t feeling a lot of love. Several members complained that despite treasury’s increasingly strategic and expanding role, department resources at best remained the same. One member said such resources at a former employer remained flat following the crisis, but given the shrinkage in other departments, that actually seemed pretty good.
Whether treasury’s heightened value is here to stay, or emerges cyclically in the wake of financial hardships, remains to be seen. However, there is a clear drive toward “more thinking and less typing,” or analytical vs. transaction processing work. Technology is an enabler here as is the ability for treasury to demonstrate value supporting business actions.