To say it has been a challenging year for businesses is an understatement. Many companies have struggled to survive, while others have grappled with rapid shifts in operational models. As we head towards 2021, with the prospect of Covid-19 vaccines providing a ray of hope, how should treasurers prepare? Peter Cunningham, EMEA Sales Head, Corporate and Public Sector, Treasury and Trade Solutions, Citi, shares his insights.
As 2020 draws to a close, and not a moment too soon for many, the treasury community has successfully navigated some of the toughest trading and operational conditions in living memory. For many in the profession, ‘building resilience’ has become a maxim, and the phrase ‘the new normal’ has become part of the everyday business lexicon as the Covid-19 pandemic continues.
To enable their organisations to pivot towards this novel operating environment, treasurers have inevitably shored up liquidity – as was the case with previous economic and financial crises, explains Cunningham. “In the first stages of the pandemic, many treasuries sought to draw down on their revolving credit facilities [RCFs], establish new bi-lateral loans or tap the commercial paper markets. Internal cash sources were part of the mix too, with the efficiency of the cash conversion cycle coming under close scrutiny,” he notes.