Cash & Liquidity Management
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Treasury Centre Stage

by Matthew Davies, Global Treasury Solutions, EMEA Corporate Sales Head,
Bank of America Merrill Lynch, and John Harris, Global Treasury Solutions,
Senior Treasury Management Sales Officer, Bank of America Merrill Lynch

The treasury function can make or break the company and the pressure is on to have in place best-in-breed systems and controls.

Although globalisation has forever altered the rules of the game for corporate treasury, the recent financial crisis has raised the stakes that define success or failure for the department – and ensured that the demand for increasing transparency, operational adaptability and comprehensive risk management will only continue to increase. The functions, controls and processes that fall under the purview of the treasurer are set to further increase in complexity and the need to manage cash and liquidity aggressively will continue, for the foreseeable future, to define the ability of the corporation to weather economic cycles and take advantage of expansion opportunities.

The global financial crisis has brought the role of treasury to centre stage with increasing importance placed on its core functions, controls and processes. As the crisis deepened, it became apparent that a company’s ability to answer basic questions around cash visibility, access to internal funding and managing counterparty risk was dependent on the very systems and processes that sit at the heart of the treasury function. For some companies, this highlighted gaps that are causing a rethink of the operating model, technology and banking providers, and of how a more integrated model eliminating silos is set to prevail.

All about visibility

As these challenges and opportunities have become increasingly more prominent, boards and executive teams have also been looking to treasury for new and creative ways to support and advance the overall strategic business objectives of the company. Whether it is positioning the company for growth or streamlining to protect the bottom line, treasury needs to be able to contribute to the discussion by providing credible insight to the cash position of the organisation, and then remain nimble to act swiftly. This needs to be done within the context of a more heavily regulated environment, where resources remain tight and there may be limited appetite for investment in new systems.