Treasury Strategy & Transformation
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The Treasurer’s Voice: Centralisation

by Helen Sanders, Editor

Featuring Filipe Simao, Head of Client Advisory, BNP Paribas and Monie Lindsey, Managing Director, Treasury Strategies Inc.

This month’s reader poll focused on centralisation, exploring the degree to which companies globally have already centralised their treasury activities, what factors may have delayed their plans in the past, and the challenges that remain. Due to the holiday period, this poll was only open for a short time, but attracted 93 high quality responses. Of these, 63% represented companies with a turnover exceeding $1bn. Responses were drawn from across all regions, with 40% based in Europe (including Central & Eastern Europe), 20% of respondents based in the Middle East with the remainder spread across North America, Latin America and Asia.

1. Centralising treasury

Treasurers indicated a strong preference for centralising their activities as far as possible. In the case of financing, investment and FX, there is a bias towards global as opposed to regional centralisation. For cash management and bank connectivity, an equal proportion of respondents indicated that they have centralised these activities globally or regionally. Filipe Simao, Head of Client Advisory, BNP Paribas comments,

“While it is not surprising that treasurers have managed to centralise activities such as financing and investment globally, it is difficult in practice to achieve the same degree of centralisation in cash and liquidity management. For example, cash flow forecasting is a process that cannot be performed centrally as it requires input and dialogue with local business units. It is also difficult to centralise accounts payable functions across widely differing time zones.”

Fig 1. Centralising Treasury