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Articles by Eric Krell
How Are Companies Dealing with FX Volatility?
Credit: derrrek/Getty Images. Currency trading in late 2024 was marked by rising volatility. As a result, the vast majority of companies experienced losses on unhedged foreign exchange (FX) risk, according to a new report from MillTechFX. Based on a survey of 250 senior finance decision-makers at U.S. and UK companies, the “Quarterly Corporate Hedging Monitor–Q4 2024” reveals that economic uncertainty is weighing on treasury and finance teams.
Commodity Risk Management: Where to Start Original
To better get a handle on how companies are managing commodity risks—and what they could be doing to better manage those risks—Treasury & Risk sat down with Amol Dhargalkar, managing partner and chairman of Chatham Financial.
Why Proactive Is Better in Commodity Risk Management
For most corporate treasury teams, financial risk management priorities consist of protecting the financial statements from volatility in currency values and interest rates. Hedging commodity risk often falls farther down treasury's to-do list. But commodity costs can move suddenly and dramatically. If treasury's risk analyses don't include scenarios with wild swings in commodity prices, the company may be caught out by unnoticed exposures.
Payment Innovations on the Horizon
The question of how payment technologies will evolve in the next few years triggers innovative thinking and an inspired analogy: “As we add real-time and blockchain networks to the mix of incumbent card and bank rails, money-movement options are starting to look like the Tokyo Metro map,” says Ernst & Young LLP partner/principal and Americas payments strategy and M&A leader Sara Elinson.
Next-Level Efficiency Opportunities for A/R and A/P
The brief but steep Covid recession in the spring of 2020 turbocharged companies’ efforts to improve accounts receivable (A/R) efficiency to stave off working capital and liquidity management problems. These efforts mainly focused on automating manual processes and improving traditional key performance indicators (KPIs) such as days sales outstanding (DSO), past-due invoices, and average days delinquent (ADD).
Accelerated Payments: Key Considerations
Like the transactions they enable, new payment capabilities are hitting the market at an accelerating pace. While many corporate treasury functions are focused on the launch of the FedNow service next spring, other options also warrant attention as the universe of accelerated-payment offerings expands. It makes sense for treasury leaders to develop evaluation criteria for assessing different options, including Real-Time Payments (RTP) and Same-Day ACH.
The Pros and Cons of New Digital Payment Options
In addition to their liquidity management and cybersecurity benefits, new payment models such as virtual accounts and digital wallets can improve accounts payable (A/P) and accounts receivable (A/R) processes. These improvements center on facilitating and streamlining the connectivity among A/P, A/R, and liquidity management activities.
3 Quick Fixes for Hedging Efficiencies
As foreign exchange (FX) volatility intensifies amid deteriorating global economic conditions, a burly U.S. dollar, and rising interest rates, boards and executive teams are becoming more interested in the financial risk management activities that treasury teams use to manage FX risks and other exposures. This attention is motivating treasury groups to quickly root out the most easily resolved sources of inefficiency in their hedging programs.
Getting Back to Natural Hedges
As companies revisit their hedging programs, some treasury groups are looking to reduce financial risks without using sophisticated financial instruments. Savvy treasury leaders optimize their organization’s natural hedges by improving data accuracy, carefully coordinating the timing of various transactions, and collaborating with internal business partners.
Payments Trends: Faster, Larger, and More Secure
Across all of finance, one of the areas that’s changing most rapidly is settlement of payments. “Banks and startups alike are investing a lot of time and money [into] rethinking payments services and infrastructure, in an effort to improve the efficiency and speed of the network,” says Corning Inc. director of liquidity and investment management Stephen Fowler.
Optimizing Cash Requires a Remodel
Like idle hands, idle excess cash can increase a company’s chances of encountering trouble. Corporate treasury groups striving to optimize their cash investments should keep in mind that an overemphasis on optimization of returns can lead to devilish complications.
Swept Away, Thanks to Rising Rates
Cash sweeps have been available for decades. “Solutions such as notional pooling and zero-balance pooling have been around for 20-plus years and continue to be effective ways of concentrating cash throughout an organization to a single entity,” notes Erik Smolders from Deloitte Risk & Financial Advisory’s treasury management practice.
The New Normal in Liquidity Management
Crises tend to either bring partners closer together or tear them apart. It seems that most corporate treasury functions and their banking partners have found themselves in the former camp over the past two years, as a result of mutually beneficial collaborations during Covid-19’s initial wave of damage.
Fundamentally Unchanged, yet Radically Different
The project management fundamentals required to successfully implement a treasury management system remain fixed. Longstanding implementation obstacles—including a lack of executive buy-in, poorly defined processes, and insufficient IT resources—will also sound familiar to seasoned treasury professionals. Still, treasury management system implementations are dramatically different today than they were 10 months ago.
Fundamentally Unchanged, yet Radically Different
Best Practices The project management fundamentals required to successfully implement a treasury management system remain fixed. Longstanding implementation obstacles—including a lack of executive buy-in, poorly defined processes, and insufficient IT resources—will also sound familiar to seasoned treasury professionals. The project management fundamentals required to successfully implement a treasury management system remain fixed.
Boosting Working Capital Management in a Downturn
There’s nothing like a crisis to focus the mind—and to focus the organization on working capital management improvements. Despite its far-reaching negative impacts, the 2008 global financial crisis proved beneficial to many companies’ working capital management practices. That hard-earned wisdom, combined with subsequent working capital and treasury innovations, will come in handy during the next (or current) downturn.
The Growing Value of Supply Chain Finance
It’s 2019—do know where your company’s cash is? That question has been top-of-mind for treasurers lately, as global trade battles and economic indicators have begun to remind many of 2008. At the start of the Great Recession, some of the world’s biggest and brightest companies could not satisfactorily answer crucial questions about their projected cash flows, and some businesses today find themselves in a similar situation.
A Total Rundown of Treasury Management System Costs
For many corporate managers, the Second Avenue Subway project in New York City serves as a chilling object lesson on the risks of budget and schedule overruns in major capital investments, including software implementations. Planned in 1968 and initially scheduled for completion in 1980, the city’s newest subway line was hammered by out-of-control costs, ceaseless delays, political wrangling, and a staggering collection of related obstacles.
Benefits & ROI of a Treasury Management System
The fundamentals of calculating return on investment (ROI) for business technology initiatives have changed little over the past few decades. There’s a good reason why the old saw “You can’t manage what you don’t measure” remains a go-to utterance for CFOs. There are equally compelling reasons why treasury leaders should recognize the challenges involved in developing a business case that effectively itemizes the ROI a new treasury management system can be expected to generate.
The Beauty of Marketing from Both Sides of the Brain
Ethelbert Williams is a renaissance marketer. His do-it-all approach to marketing has equipped him with a comprehensive set of creative, analytical and leadership skills that he's sharpened working for the world's top beauty companies. A stint with a Silicon Valley venture capital firm's portfolio company enriched his network, exposed him to some nifty fast-growth strategies, and instilled in him a desire to invest in early-stage companies that he continues to exercise today.
A Marketing Innovator Readies Real Estate for its Close-Up
The real estate industry has quickly emerged as hotbed of marketing-technology innovation, and Terra Holdings CMO Matthew Leone is leading the charge.
Cirque du Soleil's Derricks on Finding the Quiet Spaces in Marketing
As vice president of sales and marketing for Cirque du Soleil's Resident Show Division in Las Vegas, Alma Derricks is responsible for filling about 20,000 seats on any given evening. A digital media pioneer who brought comic-strip sensation Dilbert online, Derricks has held a rich mix of marketing, strategic planning, and digital media positions at such leading organizations as HBO, Paramount, and Deloitte.
Marketing, Redefined for Today's Reality
Deloitte CMO Diana O'Brien explains why marketing's transformation means the entire organization needs to be empowered to shape the client experience. When a business helps companies transform, transformation is a given for that business, as well. That's the case for Deloitte LLP. The global professional services firm is always evolving. This is especially evident in the firm's reimagining of the marketing function, which is focused on shaping every aspect of the customer experience.
Point Your Career in the Right Direction
Seven ways to move forward on the path from being a marketing executive to become the chief marketer. Before joining marketing intelligence company InsideView in January 2015, CMO Tracy Eiler spent months reviewing specifications for dozens of marketing executive openings in and around Silicon Valley. Having notched two decades of marketing experience in cloud-based companies and traditional enterprise technology organizations, Eiler could afford to be patient in finding the right job fit.
The CMO of the Future
Predictions abound on the ideal competencies of tomorrow's CMO. Which are fact, and which are fiction? Brand builder. Creative director. Revenue generator. The chief marketing officer encompasses a variety of roles that differ based on company size, level of marketing maturity, industry, and so on. But one aspect of the CMO role is now central to the position: strategy. Kim Ann King has experienced this evolution firsthand.
The Customer Competencies Every CMO Needs
Customer relationship strategies aren't solely the bailiwick of the chief customer officer; CMOs need customer experience skills, too. Her first book, Chief Customer Officer: Getting Past Lip Service to Passionate Action, appeared in 2007—right at the onset of a massive two-year spike in chief customer officer (CCO) hiring activity.
Marketing Pays Dividends at Morgan Stanley
Morgan Stanley CMO Mandell Crawley is on a mission to get his colleagues to view marketing as a commercial asset rather than as merely a creative asset. Morgan Stanley CMO Mandell Crawley is on a mission to get his colleagues to view marketing as a commercial asset rather than as merely a creative asset.
Extra Space Storage Goes the Extra Mile to Forge Customer Connections
Email personalization packages up a 50% increase in attributed conversation rate for the self-storage company. Extra Space Storage wanted to forge emotional connections with its customers. To do so, the self-storage company needed help addressing a pervasive “last-mile” direct marketing challenge. “We have a lot of data on our customers,” says Extra Space Storage Interactive Marketing Manager Jennifer Stamper.
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