Study Finds Increased Strategic Importance for Treasury Role

Treasury operations have traditionally focused largely on the conversion of collections into cash, but today, the treasury function has become much more involved in the management of the entire business process and is called on to become more of a strategic advisor to the business, according to two studies.

The reports, entitled
‘The Next Generation of Treasury: From Cash Manager to Strategic Advisor’
‘What Corporate Treasuries Want from Their Banks’
respectively, were based on an online survey of 661 finance executives and managers at companies in North America, South America, Europe and Asia Pacific.

The research, conducted by CFO Research and underwritten by software group SAP, finds that as companies look for new sources of growth, treasury is becoming a valuable partner in the process. “Treasury has moved from a transactional service provider to a strategic adviser with strong execution capabilities,” said one chief financial officer (CFO).

Companies are looking for the treasury aspect of their business to be less insulated, and to become a more inclusive corporate activity reaching across non-traditional lines, such as operational efficiencies, investor relations, and even employee benefits.

The research found that globalisation has played a major part in the changing role of the Treasury. In order to expand, companies need the ability to track cash flows and anticipate revenue flows from multiple geographies. This will “require new skill sets within the Treasury function,” said a director of finance in the study, attuned to the greater complexities of cross-border finance.

To make faster decisions on a global scale, treasury functions also need enhanced banking relationships, and upgraded banking technology that allows real-time access to multiple accounts on a consolidated basis, the reports conclude. Increasingly companies, are looking to ‘cloud’-based banking as necessary to increase visibility into their financial position and to forge better partnerships and communications with their banks.


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