Insights NewsletterUncategorized
September 10, 2019

A Master Cash-Flow Model for All Firms

Efficient capital usage and building a cash culture to accurately forecast cash flow starts with building a model of how cash flows through your company. With so much focus these days on transforming revenue models, finance teams also need to encourage their companies to build a model to better understand and improve visibility of how cash flows through the business—now and as it is transformed. At a NeuGroup meeting last May, an AT member from a technology company shared her…
Insights NewsletterUncategorized
September 5, 2019

A SOFR Shortcoming: Where’s the Spread?

One difference between Libor and SOFR is the lack of a credit component. The move to a SOFR rate benchmark without a credit component was described at recent NeuGroup meeting of bank treasurers as an assault on the regional banking business in a friendly, yet heated discussion with the panel of Libor-transition experts led by Tom Wipf, the Alternative Reference Rates Committee (ARRC) chair. The conclusion emerged that overlaying a credit component on SOFR was not in the ARRC mandate, so…
Insights NewsletterUncategorized
September 5, 2019

What Should Your Working Capital Be Used For?

Insights on how young, fast-growing companies should use their cash. How is short-term cash funded? Treasurers at high-growth tech companies at a recent NeuGroup meeting discussed funding working capital and whether a company should target cash and short-term investment balances to cover anticipated working capital needs or pay for committed short-term bank credit facilities to cover seasonal or unexpected short-term funding requirements. Part of this is communicating to management and shareholders that committed facilities have their own value as opposed to…
Insights NewsletterUncategorized
September 5, 2019

The Art of Managing Bank Expectations

How one treasurer gives banks in his revolver a share-of-wallet reality check.  Banks that agree to commit capital to a multinational’s revolving credit facility expect treasury to reward them with other, more lucrative work, such as bond underwriting. So treasurers have to deal with complaints when some bankers, inevitably, are not satisfied with their share of the company’s wallet. Ward off the whining. One large-cap treasurer told members at a recent NeuGroup meeting that his method for managing banker dissatisfaction around…
Insights NewsletterUncategorized
September 3, 2019

Does AI Mean Our Labor Days Are Over?

Founder’s Edition, by Joseph NeuHow finance leaders can keep their teams relevant as artificial intelligence transforms the world of work. Jack Ma and Elon Musk created buzz last week debating at the World Artificial Intelligence Conference in Shanghai. And with Labor Day now behind us, this is a good time to think about how AI will change the work done by finance professionals.   On the plus side, Mr. Ma, the Alibaba chairman and co-founder, claims AI will create more personal time: A…
Insights NewsletterUncategorized
August 29, 2019

Trying to Make Sense of Bank Fees

The challenges of comparing fees when banks don’t use the same terms to describe similar services. The problem for treasury teams at multinational corporations is not that they have to pay bank fees. It’s that they often don’t have enough visibility to compare those fees among banks or know what exactly they’re paying for or exactly how much something costs. GCBG members addressed these issues and discussed solutions with representatives of Greenwich Associates and Redbridge Debt & Treasury Advisory. Here…
Insights NewsletterUncategorized
August 29, 2019

The Future of Treasury and Banking is APIs

Deutsche Bank explains what treasurers should know about APIs. Even treasury professionals who know that API stands for application programming interface and that so-called open APIs have been touted as the future of payment technology may not really understand what an API is or why it matters for treasurers and their bankers. So a presentation by Deutsche Bank at NeuGroup’s Global Cash & Banking Group (GCBG) first-half meeting gave members both a refresher course and a deeper dive into APIs and why they should care about them.…
August 14, 2019

Balancing CFar and EaR in Order to Optimize FX Hedges

Bloomberg launches dynamic FX hedging model tested by Constellation. After a successful pilot with Constellation Brands, Bloomberg is offering a sophisticated approach to managing foreign-exchange (FX) risk. The new product measures the impact of currency fluctuations on cash flow and earnings and enables a more targeted FX hedging strategy. “This risk management strategy has dramatically changed the way we speak to executive leadership about risk,” said Sandy Dominach, senior vice president and treasurer at Constellation Brands. “We now have a…
Cash & Working CapitalTreasury ManagementUncategorized
May 5, 2015

On-Behalf-Of Structures: Lessons Learned

More companies are moving to streamline their payments and collections with on-behalf-of structures. Here are some lessons from the field. (Editor’s Note—Original publication date: May 5, 2015) Being a trailblazer is always nice but sometimes it pays to be the one who comes along next and learns from the trailblazer’s mistakes. And certainly, the more multifaceted the effort, the bigger the lessons learned. Such is the case with corporate payment and collections, part of the growing importance of supply-chain management…
Senior ExecutiveTreasury ManagementUncategorized
March 17, 2015

Treasury Center as Profit Center

The silver lining in the new scrutiny of global transfer pricing is that treasury might finally escape from its cost center box. (Editor’s Note—Original publication date: March 17, 2015) The context here is the mess treasury is going to face with tax, cleaning up after the OECD BEPS Actions. The silver lining is that the new scrutiny of global transfer pricing might serve as justification for treasury to become a profit center, or at least set up treasury centers and…