6 Corporate Treasury Insights from Deloitte

Every other year Deloitte conduct a corporate treasury survey to understand key trends in the treasury space. This is my ‘first’ Deloitte survey report but with so much going on in financial services right now, this is a timely insight into key corporate treasury trends. The first thing to note is that the survey has a primarily (92%) US and EMEA (Europe, Middle East and Africa) focus. But otherwise seems to capture a good cross section of corporates in terms of annual revenue, treasury resources and industries.

The Deloitte 2015 Global Corporate Treasury Survey is 20 pages, so quite digestible and thankfully to the point. I recommend giving it a read for the full details, but following are 6 corporate treasury takeaways.

1. Corporate Treasury is a Strategic Function

Corporate treasury respondents indicated what was important and what was not important to them. The responses were pretty overwhelming:

  • Over 70% indicated that becoming a profit centre was NOT important to them
  • Rather the themes of importance are liquidity management, access to capital markets enabling growth, risk management and providing strategic advice

2. Corporate Treasury Challenges

Understanding corporate treasury challenges is always interesting, its a way of benchmarking yourself with other Treasury functions. Following were the top 4 highlighted challenges:

  • Cash Repatriation – or getting your corporate treasury cash in foreign countries to where you want it
  • Foreign Exchange uncertainty and risk
  • Knowing and understanding global treasury practices, cash and financial risks
  • Insufficient treasury systems and infrastructure

3. Key Corporate Treasury Initiatives

Could you have guessed these top 3 initiatives?

  • Cost reduction
  • Implementing a single ERP (Enterprise Resource Planning) system
  • Reducing the number of legal entities

4. Treasury Outsourcing & Operating Considerations

In short:

  • Outsourcing is not a priority
  • Rather the stats are very subtle in terms of current and future priorities – with corporate treasuries looking to implement efficiencies through the use of centres of expertise, in house bank structures and corporate treasury

5. Corporate Treasury Centralisation

Interestingly Deloitte get insights into Shared Service Centres (SSC), Outsourcing and Centres of Excellence / In House Banks (IHB). Broadly speaking centralisation is viewed as a priority as it is viewed as a way to:

  • Improve liquidity management and process controls
  • Reduce transaction costs and implement process standardisation
  • Increase process knowledge
  • Support the growth within the organisation

On page 13, Deloitte highlight 3 centralisation models (SSC, outsourcing to a third party and the centre of excellence) and get the respondents to rate how they feel about each of the models. Some of the items they are asked to rate include controls, expertise and staff turnover. Its quite an interesting insight into the perceived drawbacks of each model

6.  Corporate Treasury & Technology

There are a good few pages on technology, and again worth reading for full details. Some of the key messages I took away are:

  • The main reason for selecting a Treasury Management System (TMS) was because it met the needs of the Treasury function. Sound obvious, but its worth checking out some of the other responses..
  • As mentioned above, key factors in the implementation of a new TMS include visibility into various Treasury operations and the absence of an adequate treasury system
  • The corporate treasury system environment is complex – with many ERP systems connecting to the TMS, and the use of various systems, vendor based Treasury tools and in-house developed functionality alongside the TMS
  • The most popular Treasury Management Systems seem to be SAP Treasury and Sungard (Quantum and other Sungard systems)

 

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Check out the Deloitte 2015 Global Corporate Treasury Survey report for further details.

 

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