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Cash Management – the Heart of Treasury

by Robin Page, Chief Executive, TMI

The effects of the global financial crisis are still, alas, being felt by companies of all sizes across the globe, and it has become clear that it was not just a one-off event but an episode forming part of a long period of change and transformation of the treasury landscape.  However, Germany’s Mittelstand – the small- and mid-sized companies that are the backbone of its economy – helped the country recover from the crisis faster than most other countries of the Eurozone, and are fuelling a measure of export-led growth. One paradox is that many corporations have  significant amounts of ‘spare’ cash, and treasurers are having to re-think their cash investment policies . Of course others have very different problems involving for example cash flow timing, but investors across the board have had to become, as Britta Hion of BlackRock Investment Management points out in her article, “more nimble in their approach, more adaptive in their thinking, and more flexible in their search for opportunities”. The articles in this Guide to Corporate Treasury in Germany will certainly provide some signposts to help treasurers navigate a constantly shifting landscape.

Britta Hion’s article is primarily concerned with money market funds (MMFs) and the particular effects on them of the credit crunch, especially changes in the role and importance of Credit Rating Agencies (CRAs). Investing in the short-term markets has become particularly challenging, she notes: “... it has never been harder to invest cash whilst aiming to achieve flat or positive yields”. She examines regulatory changes both in force and pending, and the way MMFs are run operationally, and proffers a useful and practical summary of just what investors should be aware of in the current climate.

Of all the regulatory changes preoccupying treasurers today SEPA is one of the most pressing, and the mandatory move from national payments and collections instruments to Single Euro Payments Area instruments on 1 February 2014 is approaching fast. Beate Murray and Ad van der Poel of Bank of America Merrill Lynch give an admirably clear and focused exposition of just what those companies who have not yet prepared for SEPA should be doing; they note that “relatively few companies in Germany have embraced SEPA to date,” and also identify the “huge opportunity” that it offers to German corporations and multinationals based in Germany. Andrej Ankerst of BNPP echoes the importance of preparedness for SEPA, with the example of how the company Einhell set about the task of migration. Another company that has embarked on its SEPA implementation is UNION TANK Eckstein GmbH & Co KG, the subject of an article by Thomas Wolpert of that company and Jürgen Krieger of Commerzbank. UNION TANK is already reaping the benefits of adopting SEPA B2B Direct Debits, and the authors give wise advice to companies just beginning their SEPA migration.