A roundup of issues International Treasurer is investigating.
Some treasury teams have found that offering specialized services to business units helps offset some cost-cutting pressure. More importantly, it allows them to leverage their existing intellectual capital—or unique access to it through treasury relationships with third parties—to deliver value the company might not otherwise capture.
For example, one MNC member of The NeuGroup’s peer network offers in-house credit analysis of potential partners or contractors to its business units, along the lines of an internal Dun & Bradstreet. It charges the business units for this service, not to make a profit, but to cover its own cost in terms of staffing, outside consultants and similar expenses. Internal audit teams are also looking for ways to offer services to business units.
Assuming the services treasury or internal audit provides are of equal quality to those from third parties—and their insight into the company’s operations should give them a leg up—this is a win-win way for the BUs to get what they need while giving treasury a strong rationale to keep its resources intact.
On the funding front, treasurers have been tapping the plethora of trade finance offerings from various countries. The Export-Import Bank and its counterparts have expanded programs and rolled out new ones as part of stimulus packages. These are no longer principally targeted to drive exports to developing nations, but can be used in a broader variety of trade finance opportunities.
The private lending market is also changing quickly as the economy picks up speed. Bankers who have urged treasurers to refinance their loans early, rather than wait and get caught up in the refinancing towers looming in 2012 and beyond, have been getting an increasingly cold shoulder. Treasurers are loath to lock in today’s more onerous terms if they expect the markets to continue to heal. And if markets do mend in line with their recovery since mid-2009, there’s a good chance there will be enough capacity in two years that those towers won’t appear quite so ominous.