Treasury Management Internation Logo
Tax, Accounting & Legal
Published  6 MIN READ
Please note: this article is over 21 years old. If you feel this article is inaccurate or contains errors get in touch here. Many thanks, TMI

Optimising Treasury through Outsourcing

by Jennifer Boussuge, Global Corporate Banking, International Subsidiary Banking (ISB) Treasury Sales Executive, Bank of America Merrill Lynch, and Ciarán Brady, Global Corporate Banking, Managing Director, Head of International Subsidiary Banking (ISB)

Is treasury outsourcing the answer to a dynamic and challenging global business environment?

It wasn’t all that long ago that the thought of outsourcing something as important as the treasury function of a large multinational organisation contradicted conventional wisdom. Why would a company decide to relinquish control of vital treasury functions, including tracking and directing the flow of precious capital through the organisation? After all, cash flow and liquidity, properly managed, are core to the financial well-being of an enterprise.

But times have changed. Today, companies operating in many locations and under different jurisdictions need access to a greater degree of local expertise. Regulatory pressures, scrutiny from boards and increased counterparty risk put even more pressure on treasury. This is the new normal. In this environment, treasury outsourcing may not only be the answer, but it may also be the fastest way to achieve treasury optimisation.

In the beginning

Business Process Outsourcing first appeared in the form of payment factories and the centralisation of accounts payable to take advantage of economies of scale and tap into best practices. It was easy to see how these functions could be automated and streamlined by a specialist without sacrificing control and the decision to move transaction-based activities to an external provider could be justified by cost savings that were easy to sell internally.

Today companies operating in many locations and under different jurisdictions need access to a greater degree of local expertise.