Traditionally considered as a specialist and compared to the accountant, the treasurer occupies a new place in the company. Since the 2008 crisis, the financial departments have become aware of the importance of controlling liquidity risk. The role of the treasurer is considerably modified. Although less specific, more strategic, this role is now multiple and requires more and more expertise in various fields such as taxation, finance, accounting or regulation.
Optimizing the cash flow of companies is a task that has become more complex with the appearance of new factors to take into account. The current context of increased globalization and competition, the tightening of regulation in the banking sector and insurance with Basel III and Solvency II, the current volatility that characterizes the markets or the period of unusually low interest rates set by the central banks condition the strategic thinking of the corporate treasurer. In addition, the crisis and new technologies have encouraged the rise of cybercrime: the group treasurer is propelled into the heart of the fight against fraud.
His main activity as liquidity manager is now added to many missions. Strategically, the treasurer must be informed of the emergence of new technological innovations (dematerialization of invoices, treasury forecasting software, modernization of payment methods, etc.). To optimize cash flow, traditional means are not enough to stay competitive locally and globally. Given the plethora of new solutions seemingly equally beneficial, the evaluation of the treasurer on the new tools to adopt is fundamental to optimizing cash flow.
More and more treasurers are now in charge of communicating with the various financial partners on the state of the group treasury; this new function and the increased participation of treasurers in mergers and acquisitions reflect the role of the treasurer, who is emerging from the shadows to take part in important stages of the company’s life. The treasurer becomes the guarantor of the credibility of a group in major operations. Within the financial departments, the evaluation of the cash flows generated by a merger and acquisition operation is now the preserve of the treasurer.
In the current context of high market volatility and low interest rates, the treasurer is also positioned as a risk manager. Previously, the investment of cash surpluses in UCITS was a widespread practice. Now, the less risky investments in the medium and long term seem a security to be taken by the treasurer. Keeping cash has become the number one priority for treasurers, where it has been to grow before.
Risk management now includes the fight against fraud: as shown by the example of BeIN Sports in February 2014, the “fraud to the president” and the “fraud on the RIB” threaten the treasuries of the groups. The offer of insurance against the risk of fraud has exploded, and it is the treasurer who is responsible for knowing how to protect his group against cybercrime by carefully selecting the right insurance (s) and preventing its organization of behaviors. to adopt for more caution when validating bank transfers.
To carry out its risk management mission, the treasurer is now able to assess the risks of internationalization. He knows the situations in the countries in which the group is considering external growth in order to avoid significant cash losses. It also anticipates the evolution of currencies in order to mitigate the exchange rate risk.
Faced with so many crucial missions to achieve, how can the corporate treasurer continue to perform?
It seems that cash is no longer just a way to finance the operation but the reactor of any financial department. Thus, the treasurer has become a financial strategist with two main missions: the analysis of risks (foreign exchange, liquidity, external and internal fraud, …) and the launch of major projects in the perspective of optimizing cash flow. It goes without saying that in order to carry out these two responsibilities, it is necessary to delegate or even outsource some of the activities that were traditionally the prerogative of the corporate treasurer, such as factoring or the tedious construction of cash forecast. The ability of organizations to rethink their treasury and finance department goes hand-in-hand with their ability to stay competitive. The financial survival of many groups is at stake.