Financial Technology

Page 1 of 3

Improving Communication to Deliver Greater Value One priority for Agrium in recent years has been cash flow forecasting, which led the firm to develop two dashboards. In turn, these have contributed to sharing cash flow forecasts with business units and providing senior management with insight into treasury's business.

Improving Communication to Deliver Greater Value

by Trevor Jones, Assistant Treasurer, Agrium Inc.

As globalisation and financial sophistication have increased over the past 30 years, the role of the treasurer has taken on new meaning, catering to the liquidity and financial risk management requirements of multinational and large domestic companies. Despite this, few people would have been able to describe what role treasury fulfilled in their business until the end of 2008. Since then, treasury’s profile has increased enormously, as company boards have sought reassurance that their companies do not have excessive exposure to financial risks and that liquidity channels remain open. However, as all treasury professionals are well aware, treasury does not exist simply as protection against the elements, but it has a valuable role to play in good times and bad. While the crisis may have elevated the profile of treasury at a senior level in the organisation, treasurers themselves need to raise awareness, and demonstrate how they can add value more widely across the business.

Treasury background

Today, the treasury department at Agrium has a presence in Canada, the United States, Europe, Australia and Latin America. Together, these units collaborate to provide treasury services across the world whether to provide liquidity, manage cash or mitigate risk exposures.

Raising awareness of treasury

While some activities that treasury undertakes have a high profile, such as M&A financing, most daily tasks are barely visible and many individuals and departments within the organisation might be unaware of how treasury can support them to fulfill their own responsibilities. Treasury’s opportunity is to work with these groups to understand their business challenges and assist with creating solutions and driving value where possible.

To achieve this ambition, however, treasury needs to educate the business about how it can enhance their activities and look to develop trust and credibility. This is beneficial for a number of reasons: not only can treasury support the business more effectively, but treasurers who may have a better understanding of what is happening around the group, can become involved early in the process versus having to react to situations and ‘fire fight’ later on.

Focusing on value-added tasks

One priority for treasury at Agrium in recent years has been cash flow forecasting. We recognised that a robust approach to cash flow forecasting was essential to enable more strategic borrowing and investment planning, to identify risks more effectively, and to maintain liquidity across the business. Consequently, we defined a more rigorous cash flow forecasting process in order to better determine future income and consumption by businesses. This has involved new processes both at a treasury level and amongst business units in order to ensure the quality and timeliness of data that is required for accurate forecasting.

Next Page   2 3 

Save PDFs of your favorite articles, authors and companies. Bookmark this article, or add to a list of your favorites within mytmi.

Discover the benefits of myTMI

 Download this article for free