Going global best practices for international cash and treasury management final ppt ss

Thursday, March 12, 2015

Going Global – Deploying Treasury Best Practices for Your International Business

© 2015 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 2

Ari MorrisFounding Partner, Global Treasury PartnersVancouver, [email protected]

Greg PersonGlobal Vice President of Presales, KyribaBoston, [email protected]

Today’s presenters


Do I have confidence in my global cash position?

Do my global companies have liquidity they need to be successful?

Do I have the right banking partners to support my regions?

Do I have the appropriate risk programs in place to protect against currency volatility?

Do I have the technology infrastructure to support the business and balance my employees time?

How do I answer….


Discussion framework

Business drivers for global treasury project

Initial considerations for global treasury deployment

Project management and ongoing global monitoring

Strategic business value to the organization


Controllership

Global treasury drivers

• FX volatility

• Fraud prevention• Auditability

• Netting / cash pooling• Bank consolidation

• Counter-party risk• Sovereign Risk

• International organic growth• Acquisitions

Company performance

Treasury best practices

Risk management

Business transformation


What works in the U.S. won’t necessarily work elsewhere– Account for regional differences (cultural, banking, your business)– No one size fits all for global treasury structures

What are we trying to solve for?– Deficiencies with current structure – Prioritize major enhancements

Do I understand the regional markets where we operate?– Business model, supply chain and liquidity needs – Banking and regulations

Project management execution– Scope, stakeholders and sponsors

How, and when, will I communicate?– Internal file sharing and technologies– Schedule checkpoints

Considerations for global treasury operations


Going global – initial focus areas

VisibilityPolicy and

ControlLiquidity Structure

RiskManagement

ProjectManagement

8© 2015 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 8

Obtain Global Visibility How much cash do we have (global visibility)?

Who are my banking partners in the region?

Rationalize current bank accounts / bank structure

How can we access this cash?

Intercompany payables & legal entity / business structure

Local investments / debt / credit agreements

Currency exposures

Initial areas of focus – visibility


Update treasury policies, operational controls and KPI reporting for the global organization Bank account maintenance policies to reflect

corporate and local banking resolutions (PoA)

Investment, ST Debt and FX policies

Trading mandate letters

Bank access security permissions

Update and deploy payment and treasury operational controls

Involve internal audit and tax

Initial areas of focus – treasury policies and controls


Liquidity management

Understand local company business and cash flows

Set target bank balance and mobilize excess cash

Local financing infrastructure (IHB, local credit lines, working capital solutions)

Tax / legal restrictions on intercompany loans / capital injections

Cash flow forecasting

Initial areas of focus – cash flow and liquidity


Risk management

Global counterparty exposures

Sovereign risk limits

Currency exposures

ISDA agreements

Counterparty trade mandate letters

Regulatory reforms (Basel III, FATCA, FBAR, local reforms)

Customer and vendor commercial practices

Initial areas of focus – risk management


Project management Ensure strategic alignment– Propose resolution to problems that matter to

the organization

Communicate the value– Determine the specific objectives for the project

and what value they will deliver

Set realistic implementation goals– Think bite-sized, discrete deliverables

Pay attention to local needs– Solve local needs in conjunction with the project

Initial area of focus - project management


Measuring global treasury execution

Entity Act Plan F (U)

Acme CA 0.9 0.5 (0.40)

Acme UK 1.6 1.0 (0.60)

Acme JP 0.8 1.0 0.20

Acme DE 0.5 0.5 -

Acme AU 1.1 1.0 (0.10)

M ar 15 USD Equiv

Bank Balance Scorecard

Set Objectives

Monitor

Realign

Clear reporting expectations for global regions Senior management buy-in and incentives Set metrics: e.g. target bank balances, forecast

accuracy

Transparent and proactive reporting Treasury scorecards, incentives,

technology communication channels

Proactive restructuring of metrics as business evolves


Regional expert, partner and advisor to support business growth Develop strategic relationships with internal and

external customers

Timely trade finance solutions to support the business

Adhere to local regulatory requirements

Provide performance guidance to leadership through cash flow measurement and alignment with strategic plans

Treasury’s business value


Manage global liquidity and financial risk Comprehensive cash visibility and currency exposure

management

Minimize local bank balances via target balancing and intercompany loans / IHB

Mitigate fraud, operational and financial risk through sound financial policies, technology and effective operational controls



P&L benefit Leverage intercompany liquidity to fund global

regions

Provide local cost effective external financing as necessary

Support sales through guarantees, bid bonds, credit insurance


Case Study – Cunningham Lindsey


Introduction to Cunningham Lindsey

Cunningham Lindsey is one of the leading global loss adjusting and claim management companies headquartered in Tampa with locations in over 55 countries

Global cash management presence with 260 operating bank accounts with 67 banks plus an additional 500+ accounts held for their clients

Global treasury staff of six team members

Alexander Hamilton Award for Cash Management awarded in Oct 2012 to Group Team


Cunningham Lindsey Global treasury project goals

Improve visibility into global cash

– Obtained weekly balances for less than 10% worldwide bank accounts (50% of global cash)

Improve accuracy of cash forecasting

– Struggled to achieve accuracy of 75% to 80% on average

– Problematic at peak times when cash inflows doubled to tripled weekly averages

Optimize use of cash

– Cash held on balance sheet more than 250% over target

– Not optimally deployed to pay down debt or invest in favorable ROI projects


Global Liquidity project benefits

• Automated daily reporting on 92% of accounts from 50+ banks (previously 8%)

• 85% of entities have complete visibility into cash

• Comprehensive connectivity strategy of FTP and SWIFT

Global Cash Visibility

• Measured actual to forecast performance of each business unit to identify problem areas

• Reduced cash forecast variances by 60%

Cash Forecast Accuracy

• Implemented global in-house bank

• Target balancing to centralize cash and reduce local balances

• Paid down external debt reducing interest expense and adding enterprise value

Optimized Global Liquidity


Global expansion requires a treasury strategy with greater visibility, control and efficiency

Adopt international best practice and avoid replicating U.S. cash process

Benchmark with your partners and treasury peers

Collaborative and extensive planning for all internal stakeholders

Structured project plan

Leverage treasury technology, partners and communication channels

Proactive reporting, performance measurement and scheduled reviews

Summary


Thanks for attending – let’s stay in touch!

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Going global best practices for international cash and treasury management final ppt ss

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Transcript of Going global best practices for international cash and treasury management final ppt ss