THE CUTTING-EDGE TREASURER

With globalization becoming increasingly important and pervasive, companies are expanding into new geographies, but unfamiliar territory inevitably carries risks, and treasury shoulders the burden of understanding and mitigating those risks. Today's cutting edge treasurers must grasp tax, local regulations and legal issues quickly and leverage that knowledge to build efficiencies into the financial supply chain of the growing company. Organizations that once had supply chains that extended 100 miles now have ones that reach around the planet. This creates a myriad of opportunities for treasury to optimize liquidity management and other processes related to new financial flows-in particular, the order to cash and purchase to pay cycle.

Where once treasury was largely concerned with repetitive transaction and execution management, it now plays a commercially engaged and increasingly strategic role. Technology and treasurers' own expertise have streamlined and automated many traditional daily activities of treasury, and treasurers are now working to achieve similar efficiencies across the business at large. The cutting edge treasurer is essentially a polymath, no longer operating in an ivory tower, separate frrom the operational functions of the business. Treasury is now a multi-faceted and proactive source of financial expertise and, in many cases, a core profit center.

Adapting to this new reality has tested the ingenuity of treasury, particularly around sales and supply chain financing. It takes an exceptional blend of skills to produce solutions that help optimize the physical supply chain flow while maximizing return and minimizing risk in the financial chain.

In addition, it takes long-term strategists in treasury to model multiple scenarios for the corporate balance sheet years into the future. Such treasurers are concerned with long-term balance sheet funding, and also with its currency and credit risk implications.

The risks facing businesses have moved into sharper focus recently. Tightening of the credit markets has made capital-raising difficult for even the fastest-growing multinationals. As such, streamlining efforts can pay dividends quickly in liquidity management. In addition, solid cash management can enhance control and improve reporting, and will help with tighter integration and collaboration across other business units.

Treasury has thus become the educator, encouraging business units to involve treasury earlier in financial process planning and instilling good working capital practices across the organization. A big part of this education is internal to treasury, as treasury executives deal with a mindboggling array of financial instruments and new technology. Treasurers must also be process engineers and technologists. Growth by acquisition requires swift and flawless integration of ERPs and other systems, and simple organic growth requires understanding and adoption of new standards and systems.

These cutting-edge treasurers are also lobbyists, working to remove obstacles to efficient financial operations and participating in standards development for treasury, including message formats and new payment instruments.

The cutting edge treasurer? A polymath indeed.

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