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Planting Seeds: IT Auditors Aim to Harvest AI Insights From Data

The race for leveraging generative AI as a strategic advantage is on, but the ground must be tilled before the field yields results.

Large language models (LLMs) like ChatGPT and Microsoft Copilot have swept through the corporate landscape as many companies have licensed or built their own internal instance of the technology. Early adopters in organizations are getting their hands dirty with this new tool, but those in the know realize that their house—the underlying data on which AI models are built—must be in order before they can make the AI revolution a reality.

  • Ed Barrie, a finance technology expert and the co-founder of Treasury4, recently told NeuGroup Insights, “AI and machine learning are only as good as the underlying datasets they’re being applied against. I’m skeptical about some of the use cases that do get talked about in the industry—unless you have a really rich dataset and much more granularity to then drive those insights.”
  • At a recent session, many members of NeuGroup for IT Auditors shared that this point rings true: for now, the use cases for generative AI are limited. Corporates must have a plan to obtain large quantities of high-quality data before they can fully realize the efficiency gains promised by AI and machine learning.
  • One member named two places where “the rubber should hit the road” for companies: “In the automation of task work, especially in the building out of sampling and testing methodologies; and in building the LLM using audit data to provide summaries, analysis and trending risk assessment data.”

The race for leveraging generative AI as a strategic advantage is on, but the ground must be tilled before the field yields results.

Large language models (LLMs) like ChatGPT and Microsoft Copilot have swept through the corporate landscape as many companies have licensed or built their own internal instance of the technology. Early adopters in organizations are getting their hands dirty with this new tool, but those in the know realize that their house—the underlying data on which AI models are built—must be in order before they can make the AI revolution a reality.

  • Ed Barrie, a finance technology expert and the co-founder of Treasury4, recently told NeuGroup Insights, “AI and machine learning are only as good as the underlying datasets they’re being applied against. I’m skeptical about some of the use cases that do get talked about in the industry—unless you have a really rich dataset and much more granularity to then drive those insights.”
  • At a recent session, many members of NeuGroup for IT Auditors shared that this point rings true: for now, the use cases for generative AI are limited. Corporates must have a plan to obtain large quantities of high-quality data before they can fully realize the efficiency gains promised by AI and machine learning.
  • One member named two places where “the rubber should hit the road” for companies: “In the automation of task work, especially in the building out of sampling and testing methodologies; and in building the LLM using audit data to provide summaries, analysis and trending risk assessment data.”

Current use cases. Members are finding ways to gain small victories from the technology—for some, these victories are won by significantly cutting down research time for audits.

  • “Right now, I see AI as a knowledge tool similar to Google search that can be used to increase efficiency and effectiveness,” one member said. AI can help to cut down the time researching and writing reports by 10% to 50%, he added.
    • The same member that after challenging audit leaders to use the company’s internal LLM, multiple team members could grasp the unique details of specific risk frameworks in less time and with a better understanding than from a Google search.
  • “What I’m going to try to do in our model in the near future is basically try to string together several documents,” another member said. “Right now I can get an extract of tickets from our project management software, put it in our platform and basically ask it, ‘Get me these several fields from these tickets and put it in a table format in this order.’ And it’ll kick out a table you can copy and paste into your work paper.”
  • One member’s team has found use cases like data entry that can make a 60-minute task take 30 or 45 minutes. But for anything beyond that, the conclusion is, “I don’t have the datasets. I have talked to others who have put five years of their audit work in, and it still wasn’t enough to train the models.”

Training the models. Some IT auditors shared that they are focusing on automating manual work, which one member called “dumb” work, using tools like Power Automate or UiPath; then capturing that work in datasets to train their models.

  • “We’re going to devote full resources to look at every process, automate, and then put AI over that automation, particularly when it comes to controls,” one member said. There are a lot of areas where there are manual controls—we’re trying to automate there. We want to fix the processes before we just jump into putting AI in something that is broken.”
  • In identifying what should be automated, one member suggested that “as you conduct your normal course of work, identify the pieces of evidence your auditor is asking for. Take inventory of those things because later on, when you want to get to automation and translate that automation into actual action for the business, you’re going to need to understand where the datasets sit.”

Future use cases. The goal, many IT auditors in the session shared, is to get internal LLMs to the point that they can provide better, company-specific outputs—applying this tool to more value-added, strategic work.

  • A member described his team’s process for auditing IT help desk tickets, using random number generators and dozens of tabs in spreadsheets. “That’s time-consuming work, it takes hours,” he said.
  • Once a process like this is automated, he will be able to test and validate a much broader swath of data that can train an AI model to do value-adding work like identifying key trends and themes, providing risk assessment data and issuing summaries.
  • The same member’s “pie in the sky” goal is to use an LLM to comprehensively generate a risk assessment, which he said will make the audit planning process more effective and efficient. “You want to be able to ask a library, ‘where do I have governance issues?’ or ‘how long did it take to close out this management action plan that was high risk?’”
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Trapped Cash Unlocked: Bopreal Pipeline Pays Off for Corporates

Some NeuGroup members are using Argentina’s Bopreal bonds to free nearly all of their trapped cash amid peso devaluation.

During continued devaluation of the Argentine peso that may only get worse, multiple NeuGroup members are prioritizing the use of the Bopreal series of bonds launched last December to help importers pay off cross-border debt to get trapped cash out of the country as soon as possible.

  • Members discussed their use of these bonds in a recent session of NeuGroup for Latin America Treasury featuring experts from Banco Comafi. One member said their view is that devaluation will continue to worsen, and said their company would be “exposed like sitting ducks” if they weren’t able to get the cash out of the country as soon as possible.
  • Comafi’s Mateo Gall said futures markets are pricing in devaluation rates around 10% by this July amid economic, political and social challenges in Argentina. However, recent positive outcomes like increased dollar deposits in the country have led to a reduced likelihood of an official devaluation like the one that occurred last December.
  • Bopreals have been released in weekly auctions by the Argentine central bank (BCRA), with three series of bonds, each with unique maturities and restrictions. The first series, which reached its maximum $5 billion allocation in January, matures in 2027 and does not include the country’s 30% tax on outgoing cash. The second and third series mature in 2025 and 2026.

Some NeuGroup members are using Argentina’s Bopreal bonds to free nearly all of their trapped cash amid peso devaluation.

During continued devaluation of the Argentine peso that may only get worse, multiple NeuGroup members are prioritizing the use of the Bopreal series of bonds launched last December to help importers pay off cross-border debt to get trapped cash out of the country as soon as possible.

  • Members discussed their use of these bonds in a recent session of NeuGroup for Latin America Treasury featuring experts from Banco Comafi. One member said their view is that devaluation will continue to worsen, and said their company would be “exposed like sitting ducks” if they weren’t able to get the cash out of the country as soon as possible.
  • Comafi’s Mateo Gall said futures markets are pricing in devaluation rates around 10% by this July amid economic, political and social challenges in Argentina. However, recent positive outcomes like increased dollar deposits in the country have led to a reduced likelihood of an official devaluation like the one that occurred last December.
  • Bopreals have been released in weekly auctions by the Argentine central bank (BCRA), with three series of bonds, each with unique maturities and restrictions. The first series, which reached its maximum $5 billion allocation in January, matures in 2027 and does not include the country’s 30% tax on outgoing cash. The second and third series mature in 2025 and 2026.

Turnaround for series 1. After a slow start for the first series of Bopreals last December, the government sweetened the terms, sparking demand. In addition, one member said that “everybody and their mother suddenly wanted in on” the bonds when it became clear they were an effective, reliable way to free trapped cash.

  • For one member with outstanding debt to vendors in the US, it took multiple attempts to purchase series 1 bonds, with the BCRA only granting half of their bid on the first attempt. But after subsequent requests in the following weeks, the member was able to free up all of the company’s trapped cash in the country using series 1 Bopreals that they sold on the secondary market for about two-thirds of the bonds’ USD value.
  • The company will be able to access Argentina’s blue-chip swap market (an unofficial FX market that carries an unfavorable rate) on April 1 to pay their vendors the remaining value while exempt from a 90-day required waiting period that typically applies to this market—a bonus exclusively for the first series.

Scoring with series 2 and 3. One member, whose company had several million “old and cold” dollars trapped in the country, attempted to access this first series of bonds, but due to such high demand their bank could not get the bid ready in time. The company has subsequently freed more than three-quarters of intercompany debt trapped in the country with purchases from series 2 and 3.

  • The member said that, whether or not a corporate works with their bank, there is a bounty of paperwork required to register these debts with the BCRA. “There’s lots of manual work, including uploading many documents, to present yourself with payment,” they said.
  • The member was allocated series 2 bond equal to about one-third of the company’s trapped cash. They received an additional amount through a series 3 auction. 
  • In last week’s auction of series 3 bonds, the BCRA awarded the entirety of 205 requested bids. In a sign the bonds may be satiating demand, nearly $2 billion of series 3 remains and is open to all importers with debts, regardless of registered balances, in this week’s auction.

Hold or sell? Because the bonds do expose a company to sovereign risk, this member is evaluating the secondary market to determine whether—and when—to sell the bonds.

  • “And if we take it onto the secondary market, we’d have to figure out how to account for that,” the member said. “I just don’t know if we want to pull that trigger yet, we may just wait to see how it all shakes out.”
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Former HP Treasurer Zac Nesper’s Joyful Passing of the Baton

Mr. Nesper’s total trust in Andrea Noseda’s abilities provided the confidence to leave a job and company he loved.

After years of thinking about leaving a company and a job he loved to spend more time with his family, former HP Inc. treasurer Zac Nesper found the right internal person to succeed him: Andrea Noseda, a treasury novice back when he hired her for a capital markets role four years earlier (today she’s an expert).

  • In a new NeuGroup video you can watch by hitting the play button below, Mr. Nesper shares how Ms. Noseda progressed to the point where, after she interviewed for the position, HP named her treasurer in June 2023. It was an outcome he called one of the greatest joys of his career.
  • Mr. Nesper provided support during a transition period, while also serving as CFO of the company’s Strategy and Incubation business unit. He left HP at the end of 2023 to begin what his LinkedIn page describes as a career break and personal goal pursuit.
  • “I hit a point where I just was like, my kids are only going to be in the house for three more years, and I have this crazy hunger to just spend time with them,” he says in the video. “I’ve got this personal desire to step out, but beyond that, I don’t want to stand in somebody else’s way.”

Mr. Nesper’s total trust in Andrea Noseda’s abilities provided the confidence to leave a job and company he loved.

After years of thinking about leaving a company and a job he loved to spend more time with his family, former HP Inc. treasurer Zac Nesper found the right internal person to succeed him: Andrea Noseda, a treasury novice back when he hired her for a capital markets role four years earlier (today she’s an expert).

  • In a new NeuGroup video you can watch by hitting the play button below, Mr. Nesper shares how Ms. Noseda progressed to the point where, after she interviewed for the position, HP named her treasurer in June 2023. It was an outcome he called one of the greatest joys of his career.
  • Mr. Nesper provided support during a transition period, while also serving as CFO of the company’s Strategy and Incubation business unit. He left HP at the end of 2023 to begin what his LinkedIn page describes as a career break and personal goal pursuit.
  • “I hit a point where I just was like, my kids are only going to be in the house for three more years, and I have this crazy hunger to just spend time with them,” he says in the video. “I’ve got this personal desire to step out, but beyond that, I don’t want to stand in somebody else’s way.”

A treasurer’s journey. Mr. Nesper’s decision to step down came after 20 years of experience in corporate finance at HP, with stints in FP&A and multiple treasury roles before he became treasurer in 2018. His time as treasurer was an eventful one, facing the emergence of the Covid-19 pandemic and its fallout, as well as a hostile takeover attempt by Carl Icahn.

  • He now takes great comfort knowing that treasury is in good hands—and that there are other employees from his team that could also be corporate treasurers. “So that’s fun to have, that legacy,” he says in the video.

Stay tuned to NeuGroup Insights to hear the full conversation between Mr. Nesper and NeuGroup founder and CEO Joseph Neu in an upcoming episode of the Strategic Finance Lab podcast. In addition to a deeper dive into the former treasurer’s decision to step down, the pair discuss the evolving role of AI, the benefits of embracing a personal brand and the lessons he learned from his path through finance.

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Banding Together: Uniting Risk Management, Finance and Safety

NeuGroup members are creating risk teams within finance that rethink risk from a top-down perspective.

In response to rising commercial insurance premiums and other factors, NeuGroup members are taking proactive steps to fortify risk management strategies. One option that came to light at a recent session of NeuGroup for Risk Finance and Insurance: creating a risk management team that sits within finance and is empowered to work with safety, claims and insurance teams to foster a company-wide culture of risk awareness.

  • Members at the session shared insights on the road to better risk management—including one who implemented a new RMIS (risk management information system) that allows the risk team to track on-the-ground activities at multiple customer-facing locations.

NeuGroup members are creating risk teams within finance that rethink risk from a top-down perspective.

In response to rising commercial insurance premiums and other factors, NeuGroup members are taking proactive steps to fortify risk management strategies. One option that came to light at a recent session of NeuGroup for Risk Finance and Insurance: creating a risk management team that sits within finance and is empowered to work with safety, claims and insurance teams to foster a company-wide culture of risk awareness.

  • Members at the session shared insights on the road to better risk management—including one who implemented a new RMIS (risk management information system) that allows the risk team to track on-the-ground activities at multiple customer-facing locations.

Strategic location. Some members said their companies’ safety teams work well within operations, with insurance and claims units residing elsewhere. Others emphasized the value of a centralized team that sits within finance.

  • One member commented that sitting within finance gives the risk team wide-ranging visibility into activities like upcoming mergers and acquisitions.
  • This structure also allows the team to partner closely with treasury, which provides insight into liquidity—a key component when determining the corporate’s risk tolerance, dependent on its ability to absorb unexpected losses or expenses. 

The language of risk. Because these risk teams’ collaborative ethos extends beyond operations within finance, they also lead to strong partnerships with ERM, legal, compliance and internal audit teams.

  • A key step that made it easier for one member to work closely with these teams was to create a standardized language around risk, coming to a shared understanding of the meaning of phrases like “high risk” and “critical risk,” including monetary value and likelihood of occurrence.
  • The member said these teams have quarterly meetings with their closest business partners, emphasizing the value of proactive discussions on risk reduction. This regular interaction allows for strategic conversations focused on preparing for potential future risks, rather than only collaborating when there is a problem to solve.

Empowered business partners. One critical strategy employed by some members is a two-pronged approach to promote safety at each of a company’s buildings: centralized teams that work to reduce risk through efficiently designed processes, complemented by onsite safety professionals that partner with the business by leveraging their on-the-ground perspective into trends and hazards.

  • Using the company’s RMIS, onsite safety teams report and track any incidents at their locations. The data is then consolidated into dashboards, enabling stakeholders to have a predictable and understandable view of the company’s exposures.
  • By establishing a culture of shared responsibility, this approach motivates all members on the team to become true partners to the business, actively contributing to risk management discussions and decision-making processes.
  • For one member, a RMIS system was quickly tested after implementation when the company had to make changes to its operational plans nearly overnight. The central teams responded swiftly by establishing streamlined checklists for the onsite safety employees, which facilitated implementation of new processes for escalations and interventions.
  • This collaborative approach ensures that risks are identified and addressed in a timely manner, fostering a proactive risk management culture throughout the organization. As a result, the company is better equipped to anticipate and mitigate potential risks, safeguarding its operations and financial stability in an ever-changing business environment.
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Talking Shop: Does IA Need Technical Accounting Black Belts?

Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: In the world of accounting standards, a material weakness is “a deficiency, or a combination of deficiencies, in internal control over financial reporting (ICFR), such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”

  • The Sarbanes-Oxley Act (SOX) required companies to start testing for material weaknesses and have outside auditors review their controls. Corporates are required to publicly disclose any material weaknesses in ICFR.
  • The phrase has appeared recently in articles about: New York Community Bancorp uncovering material weaknesses tied to internal controls related to a loan review; and chemical maker Chemours evaluating one or more potential material weaknesses in its financial reporting.

Member question: “Does your audit committee (AC) expect your internal audit team (not SOX) to have strong GAAP expertise to be able to identify non-compliance in technical areas? Do you have auditors who are basically black belts in technical accounting skills?”

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: In the world of accounting standards, a material weakness is “a deficiency, or a combination of deficiencies, in internal control over financial reporting (ICFR), such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”

  • The Sarbanes-Oxley Act (SOX) required companies to start testing for material weaknesses and have outside auditors review their controls. Corporates are required to publicly disclose any material weaknesses in ICFR.
  • The phrase has appeared recently in articles about: New York Community Bancorp uncovering material weaknesses tied to internal controls related to a loan review; and chemical maker Chemours evaluating one or more potential material weaknesses in its financial reporting.

Member question: “Does your audit committee (AC) expect your internal audit team (not SOX) to have strong GAAP expertise to be able to identify non-compliance in technical areas? Do you have auditors who are basically black belts in technical accounting skills?

  • “We have a material weakness in revenue for GAAP non-compliance that was missed for several years by our external auditors, by management, by SOX, and by internal audit. There was a calculation of revenue recognition that was not in strict compliance with GAAP. It was not material enough to require restatements of prior years or quarters, thank goodness.
  • “So we are grappling with how responsible IA was in not catching this. We do operational audits (but basically never a pure financial audit for GAAP compliance) and our team members generally have Big Four (or public accounting) backgrounds, with an average of about 7 years of experience, many in low-cost locations).
  • “My AC chair asked what level of GAAP knowledge did my team have; I said I have no black belts or even auditors who are super technical in any particular accounting processes. Does your team have these skill sets? Open to your opinions as well.”

Peer answer 1: “Our team makeup is very similar to yours, but I also own SOX. My AC has never expressed expectations that we be experts on GAAP, nor do I think it is reasonable for them to do so given the breadth of our responsibilities.

  • “It seems to me that the question, rather than each group’s capabilities, is why existing key controls were insufficient or ineffective to catch it and why the external auditors, between their independent controls testing and substantive testing, also did not catch it.”

Peer answer 2: “I can almost exactly replicate the first response. I’ll add that my team has no black belts and two-thirds of them are offshore.”

Peer answer 3: 
“I have not had super-technical accountants in IA teams in my current or prior roles. I think it’s beyond the expectations in the IIA standards for IA to be equipped to substantively validate complex accounting positions. I would expect IA to have enough financial literacy to test management’s own controls over risky areas, i.e., whether they had the relevant expertise on their team and had done the necessary white papers/reviews on a complex topic.”

Peer answer 4:
 “My AC has not asked this question. However, I would expect the AC and our external auditors to assume that internal audit has the responsibility to assess the design of ICFR, unless there’s another third line function that has this responsibility within the org. In the context of the third line responsibility, I see two frameworks relevant to an expectation over the use of knowledgeable personnel:

  1. The IIA Global Internal Audit standards (2024), Principle 3, ‘Demonstrate Competency’ (specifically, standard 3.1 “Competency”)
  2. COSO Principle 16, specifically ‘Points of Focus, Uses Knowledgeable Personnel.’ Evaluators who perform ongoing and separate evaluations have sufficient knowledge to understand what is being evaluated.”

NeuGroup Insights reached out to the questioner, who provided these additional comments and insights:

  • “I have never viewed IA as being responsible for GAAP compliance in general, unless an audit objective/scope was specifically defined as such. From a third line of defense standpoint, I leave GAAP compliance governance with the SOX group.
  • “By design, internal auditors would not possess this specific set of skills as we need to cover very broad areas. For SOX, this is a different conversation, and should be designed to catch material weaknesses before they happen.
  • “The IA function does independent testing of management SOX controls (utilizing a third-party public accounting firm), and I feel some ownership for not catching it. However, management owns the control environment with the technical accounting positions, and the IA SOX testing function is more about confirming the execution and documentation (IPE) of the control.”
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Balancing Act: A Former Auditor’s Perspective on Financial Risk

A Bristol Myers Squibb risk manager shares how a balanced approach to controls can optimize treasury efficiency.

The multifaceted job of financial risk management within corporate treasury includes the effective use of controls to mitigate all sorts of potential threats to a company’s financial stability. But don’t let controls get out of control—implementing too many of them to manage financial risks can inadvertently create operational risks.

  • That’s a key takeaway from a recent NeuGroup conversation with Bill Brewer, associate director of financial risk management at Bristol Myers Squibb. You can watch a video clip from the interview by hitting the play button below.
  • “If you have five different controls and you need to get a payment out in a certain amount of time, those controls may slow down the process,” Mr. Brewer said, illustrating the point. “While you might reduce the risk of sending out a payment to the wrong address, you might end up increasing the risk of not sending out payments on time.”

A Bristol Myers Squibb risk manager shares how a balanced approach to controls can optimize treasury efficiency.

The multifaceted job of financial risk management within corporate treasury includes the effective use of controls to mitigate all sorts of potential threats to a company’s financial stability. But don’t let controls get out of control—implementing too many of them to manage financial risks can inadvertently create operational risks.

  • That’s a key takeaway from a recent NeuGroup conversation with Bill Brewer, associate director of financial risk management at Bristol Myers Squibb. You can watch a video clip from the interview by hitting the play button below.
  • “If you have five different controls and you need to get a payment out in a certain amount of time, those controls may slow down the process,” Mr. Brewer said, illustrating the point. “While you might reduce the risk of sending out a payment to the wrong address, you might end up increasing the risk of not sending out payments on time.”

An audit perspective in treasury. Mr. Brewer’s skill at walking the fine line between operational efficiency and effective controls is rooted in his background in internal audit at BMS. The perspective he brings to treasury includes the view that risk mitigation controls are more effective when they are preventive rather than “detective,” or those that are used to detect an issue after it has occurred.

  • Mr. Brewer joined treasury at BMS 2020 and the team he’s on today oversees FX hedging, interest rate risk, commodities exposures, counterparty risk and risk in the BMS short-term cash portfolio.
  • In an upcoming episode of NeuGroup’s Strategic Finance Lab podcast, he will dive further into his view of risk management as well as treasury’s partnerships with other teams at BMS, his path through finance and his approach to designing automations.
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C2FO’s CEO: Early Payment Proponent, Financial Friction Foe

The views of Sandy Kemper—entrepreneur, rancher and former bank CEO—on the Strategic Finance Lab podcast.

C2FO CEO Sandy Kemper, in a Strategic Finance Lab podcast interview you can listen to now on Apple and Spotify, describes how the fintech he founded in 2008 provides fast, flexible access to low-cost working capital to suppliers, some of whom struggle to get bank loans.

  • C2FO’s platform enables large corporations to pay their suppliers early in exchange for a discount set by the supplier. Mr. Kemper says early payments help eliminate “friction” in a banking system he calls antiquated and rife with pain points.
  • Those pain points can put small and midsize businesses—some owned by women and minorities—at a disadvantage because of how heavily-regulated banks view risk, he says.

The views of Sandy Kemper—entrepreneur, rancher and former bank CEO—on the Strategic Finance Lab podcast.

C2FO CEO Sandy Kemper, in a Strategic Finance Lab podcast interview you can listen to now on Apple and Spotify, describes how the fintech he founded in 2008 provides fast, flexible access to low-cost working capital to suppliers, some of whom struggle to get bank loans.

  • C2FO’s platform enables large corporations to pay their suppliers early in exchange for a discount set by the supplier. Mr. Kemper says early payments help eliminate “friction” in a banking system he calls antiquated and rife with pain points.
  • Those pain points can put small and midsize businesses—some owned by women and minorities—at a disadvantage because of how heavily-regulated banks view risk, he says.

Sandy Kemper, C2FO

A rancher with a banking background. As he tells NeuGroup founder and CEO Joseph Neu, Mr. Kemper’s opinions about the banking system are grounded in hands-on experience in an industry whose role in economic growth he greatly respects. Raised by a family of bankers, he rose through the ranks and served as chairman of the board and CEO of UMB Bank and CEO of UMB Financial.

  • Mr. Kemper, who left banking to start his first technology company, Perfect Commerce, lives with his family on a small ranch in Kansas City, Missouri. They raise and care for horses, sheep, chickens and bees. In the podcast, he discusses lessons he’s learned from nature and ecosystems.
  • He also talks about how early payments and better access to working capital for suppliers can help corporations trying to reduce carbon emissions in their supply chains. C2FO, he says, is hearing large companies say this about their suppliers: “Let’s reduce their cost to borrow and have them be able to get more margin and more profit and, because of that, help us make our supply chain carbon neutral.”
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Talking Shop: Bank Criteria for Granting Deposit Rate Premiums

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The Federal Reserve’s 11 increases in the fed funds rate since March 2022 have changed bank deposit dynamics. NeuGroup senior executive advisor Jerry Olivo, a former banker who leads NeuGroup for Regional Bank Treasurers, says the higher rate environment means institutions now have to compete for so-called sticky deposits as customers move money elsewhere.

  • “Many banks will offer a premium rate for the deposit types they value if they have seen a runoff of those deposits as clients move into higher-rate money funds or Treasury bills,” Mr. Olivo explained. “They will not offer the premium for other types.”
  • Banks are more willing to pay higher rates for funds that are likely to remain on deposit during a time of liquidity stress. Those include retail accounts as well as commercial operating accounts and deposits of clients with good, longstanding relationships with the bank, according to Mr. Olivo.
  • Given that banks evaluate the “stress liquidity attributes of a deposit” and use that analysis to decide when to pay premiums, corporates can position a portion of their deposits for higher rates by better understanding the attributes that banks seek in a deposit, he added.

Member question: “I am curious if anyone is willing to share the types of criteria or qualification to grant deposit rate premiums? We look at each customer/account on a case-by-case basis, but want to start using a more formulaic approach with criteria for our salesforce to reference when making requests for rate premiums. Any information is appreciated.”

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: The Federal Reserve’s 11 increases in the fed funds rate since March 2022 have changed bank deposit dynamics. NeuGroup senior executive advisor Jerry Olivo, a former banker who leads NeuGroup for Regional Bank Treasurers, says the higher rate environment means institutions now have to compete for so-called sticky deposits as customers move money elsewhere.

  • “Many banks will offer a premium rate for the deposit types they value if they have seen a runoff of those deposits as clients move into higher-rate money funds or Treasury bills,” Mr. Olivo explained. “They will not offer the premium for other types.”
  • Banks are more willing to pay higher rates for funds that are likely to remain on deposit during a time of liquidity stress. Those include retail accounts as well as commercial operating accounts and deposits of clients with good, longstanding relationships with the bank, according to Mr. Olivo.
  • Given that banks evaluate the “stress liquidity attributes of a deposit” and use that analysis to decide when to pay premiums, corporates can position a portion of their deposits for higher rates by better understanding the attributes that banks seek in a deposit, he added.

Member question: “I am curious if anyone is willing to share the types of criteria or qualification to grant deposit rate premiums? We look at each customer/account on a case-by-case basis, but want to start using a more formulaic approach with criteria for our salesforce to reference when making requests for rate premiums. Any information is appreciated.”

Peer answer 1:
 “We don’t have a formulaic calculation or process for exception pricing. I would say we utilize ‘informed subjectivity.’ Our profitability team has created an easy access customer relationship link that captures the entire relationship, so we can determine the depth of the relationship. That, combined with daily cost of funds and internal approval levels, allows us to target reasonable pricing levels.”

Peer answer 2: 
“I would agree that ‘informed subjectivity’ would describe our process. We do establish no-call exception guidelines where the line of business can approve certain exceptions without escalation to senior managers. Over that level, exceptions need approval by me or the executive in charge of the line of business. Only the most sensitive requests usually make it to that level.”

Peer answer 3:
 “We have established exception-pricing authority relative to the level of the fed funds upper bound rate. Bankers and our deposit working group have specified levels of authority in basis points relative to that rate, and we adjust that authority as necessary.”

Final thoughts. 
Reviewing the answers, NeuGroup’s Mr. Olivo observed that a subjective, qualitative approach to determining deposit premium criteria is common. However, he said more regional banks are going down the path to create a more structured liquidity and pricing model.

  • “Deposit pricing committees within the banks are looking to define and implement these pricing criteria so that their client-facing teams can make quick decisions when in the field rather than have to come back for centralized approval—without overpaying for less valuable deposits,” he said. “For large corporate clients, there may be more one-off negotiation based upon the relationship, but with upper bounds established via qualitative and quantitative criteria.”
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Shifting Tides: The Role of DEI Firms in Capital Markets

New NeuGroup Peer Research shows DEI firms enjoy support among corporates but face headwinds in the current ESG climate.

A new NeuGroup survey reveals that 66% of corporate treasuries include diverse-owned firms in their capital markets deals, including bond underwriting, commercial paper (CP) and open market repurchase (OMR) programs. The survey, conducted in collaboration with Sustainable Fitch and the National Association of Securities Professionals (NASP) in December 2023, explored the level of engagement between treasury and diverse-owned firms.

Shifting winds. 
NeuGroup members who responded to the survey cited two top reasons for awarding minority-owned firms a share of treasury’s capital markets business. Chief among them is supporting the company’s diversity objectives, listed as a benefit by 87% of respondents (see chart), followed by sending a positive message to employees, suppliers and customers (78%).

New NeuGroup Peer Research shows DEI firms enjoy support among corporates but face headwinds in the current ESG climate.

A new NeuGroup survey reveals that 66% of corporate treasuries include diverse-owned firms in their capital markets deals, including bond underwriting, commercial paper (CP) and open market repurchase (OMR) programs. The survey, conducted in collaboration with Sustainable Fitch and the National Association of Securities Professionals (NASP) in December 2023, explored the level of engagement between treasury and diverse-owned firms.

Shifting winds. 
NeuGroup members who responded to the survey cited two top reasons for awarding minority-owned firms a share of treasury’s capital markets business. Chief among them is supporting the company’s diversity objectives, listed as a benefit by 87% of respondents (see chart), followed by sending a positive message to employees, suppliers and customers (78%).

  • These benefits illustrate both a weakness and a strength in supporting continued or expanded corporate engagement with diverse-owned banks and broker-dealers. Because they are related to companies’ overall commitment to DEI, they leave these firms vulnerable to shifts in the social, political and economic environment.
  • “The environment in 2024 is not what it was in 2021-22,” noted one respondent in a follow-up conversation. Indeed, several companies have made headlines by backing away from earlier ESG commitments and reducing the size of their DEI teams—one aspect of the social component of ESG.
  • “We have used diverse firms for a number of years, purely because it’s an effective way to demonstrate these are organizations we believe in,” one respondent said. “The danger is that if the company’s commitment to the issue wanes, it is no longer a big motivator.”

Investors and capital. The third most common benefit (72%)—access to a diverse investor base—indicates that minority-owned firms have an important and continuing role to play in executing corporate capital markets transactions, one with economic value. One member also highlighted the firms’ analytical skills related to investors. “The diverse-owned firms conducted much better analysis ahead of a bond deal,” one respondent said. “They looked at our overall debt investor base and dug deeper to find out, for example, what percentage of bonds is held by different types of investors, like insurance firms.”

  • But corporates allocating fees (share of wallet) typically award the most lucrative roles to banks that commit capital to their revolvers; most diverse-owned financial institutions lack the capital needed to support those credit commitments. As a result, over three-quarters of respondents that work with diverse-owned firms on bond deals use them as co-managers as opposed to being active book runners that earn higher fees.
  • “Our current pricing approach requires a bank to take trading risk,” explained one respondent. “The problem is that they lack the capital to support the types of transactions we undertake.”
  • Another member said, “At a certain point, we will be cannibalizing the fee pool for banks that are providing us capital. Continuing to grow our business with all but the largest diverse-owned firms may be a challenge in this environment.”

A different type of capital. The key for maintaining and growing diverse-owned firms’ share of corporate capital markets deals is to not compete with big banks, but to offer more reasons for treasuries to award them higher fees. “The firms need to find the one thing or value they can deliver and do it consistently,” one member said. “They need to offer something that differentiates them from other firms.”

  • Minority-owned firms often play active roles in CP and OMR programs because those do not require capital commitment. In fact, some treasurers said they use diverse-owned firms exclusively in their CP and OMR programs.
    • “We get better execution than we do with bulge-bracket banks because the smaller institutions pay more attention to our business,” explained one respondent. “We found that they actually outperform the bulge-bracket banks.”
  • As noted above, another area where some diverse-owned firms already shine is offering a unique point of view on the market and providing deeper and more insightful analysis. “They have to compete on intellectual capital,” said a respondent. “We partner with DEI firms that offer something unique and value added.”
  • He added: “If I get 100 emails from banks with their market insight every day, the only one I read is from a diverse-owned firm. They bring a different geopolitical and economic perspective that I don’t get anywhere else.”
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Seeking Solutions, Pushing Banks for Change on Signer Management

As NeuGroup members unite to lobby banks, digital signer portals from Citi and J.P. Morgan create buzz.

Frustration with the inefficiencies of tracking and updating signers on bank accounts has pushed some members of NeuGroup for Global Cash and Banking to form a subgroup to present a united front in asking banks for digital solutions and standards that will provide real-time visibility to signer data (Step 1) and, ideally, make it possible for that data to flow directly into treasury management systems (TMSs) and other corporate databases (Step 2).

  • “How can we collectively tell the banks we’re done waiting for this to get handled over the next 10 years, and to put the resources to it?” one member asked during a December session. “I’d rather have banks focus on that in the near future, rather than talk about AI.”

As NeuGroup members unite to lobby banks, digital signer portals from Citi and J.P. Morgan create buzz.

Frustration with the inefficiencies of tracking and updating signers on bank accounts has pushed some members of NeuGroup for Global Cash and Banking to form a subgroup to present a united front in asking banks for digital solutions and standards that will provide real-time visibility to signer data (Step 1) and, ideally, make it possible for that data to flow directly into treasury management systems (TMSs) and other corporate databases (Step 2).

  • “How can we collectively tell the banks we’re done waiting for this to get handled over the next 10 years, and to put the resources to it?” one member asked during a December session. “I’d rather have banks focus on that in the near future, rather than talk about AI.”
  • The good news is that some banks, including Citi and J.P. Morgan, are in different stages of offering digital signer portals and platforms to corporates. Members participating in rollouts of these solutions are sharing information on their capabilities and the experience of working with the banks to improve the offerings.
  • NeuGroup is committed to facilitating dialogue between banks and corporates to address this and other issues with electronic bank account management (eBAM). Existing NeuGroup members who are interested in participating or getting more information can reach out to peer group leader Julie Zawacki-Lucci via email.

Signer pain. A key frustration for treasury teams responsible for BAM is the time-consuming, manual nature of confirming with banks the names of signers on what can be thousands of accounts at dozens of banks spread across the globe—information needed for external audits, SOX compliance, fraud prevention and other reasons. Members also describe sending endless emails to obtain data and correct inaccuracies in bank records that have not been properly updated.

  • “It’s frustrating managing an Excel spreadsheet and trying to keep up,” one member said. Another agreed: “Even knowing who your signers are at any given point—the annual process is painful.” She added, “Today, if I needed to get reports on all those who have portal access across our banks, there are reports and visibility into users and accounts that I can run and see. My position is that the banks should have signatories set up in a similar manner.”
  • One factor that has inhibited progress, members said, is that many banks don’t have fast, digital access to signer information and documents. “Banks are telling us they also grew through acquisitions and are trying to consolidate systems on their end as well to gather that data,” one member said. “Even on their back end, it didn’t seem like there was an automated process they have for tracking signers,” another added.

Citi’s digital solution. One member at the December session told peers about what Citi calls its Digital Signer Management program that sits inside CitiDirect, the bank’s global, digital banking platform. “This new portal will allow us to see our signers that Citi has on file currently and, when we need to, we can use it to launch and initiate a signer update,” she said.

  • Citi confirmed to NeuGroup Insights that its portal gives clients the ability to maintain signer information and submit documentation online globally. The bank reviews changes and performs automated signer maintenance in a global, centralized signer database. Clients have access to real-time reporting to view signer details and create on-demand signer summary reports.
  • Citi’s work on the signer solution started three years ago and required combining local repositories of signer information and documents into one, global, digital repository to create “one source of truth,” said Magdalena Mielcarz, Global Head of Onboarding-Platforms & Data Services. This allows a treasury team to have visibility through the portal of all of their signers in multiple branches or countries, eliminating the need to ask the bank for signer summary reports.
  • The NeuGroup member whose company is now using Citi’s Digital Signer Management program is one of more than 300 corporates that Citi has invited to use the solution, which now covers bank accounts in 44 of the 95 countries where Citi has on-the-ground presence.
  • The companies invited so far have a majority of their accounts in those 44 countries. Citi, which went live with the offering in June 2023, will “start opening the gates a lot more this year” as it plans to add more countries, according to Ms. Mielcarz.
  • Julie Betts, a Citi director who has played a key role in the bank’s digital onboarding and Digital Signer Management program development, elaborated on the advantage the signer program provides, for example, when updating a person’s signing authority in multiple locations, formerly a decentralized, prolonged process.
  • “Now, this solution allows our clients to update one or more signers in multiple locations through a single, digitally initiated request; this allows Citi to make the requested changes at a personal level, instead of on an account-by-account basis,” she said.
    • “So if you’re updating Sally and she’s left the company and Jane is taking over, we allow the client to do that as one activity instead of having to go to 44 different countries. So that’s a huge, fundamental change from a client perspective in how they manage signer updates today.”

Working with J.P. Morgan. One member of the global cash and banking group told peers about her company’s use of Authorized Signer, a solution offered by J.P. Morgan through its Access platform that she said “has been great” in the US. Her team worked with the bank extensively to address differences between signers listed in the portal and the company’s own records. Discrepancies have been resolved successfully and the portal “can help with FBAR reporting as well,” she said.

  • A J.P. Morgan spokesperson described the solution, launched in 2022, as “a self-service tool for clients to have visibility and reporting of account and entity signers, simplifying the process for treasury teams,” adding that it allows new clients to view and export their signatories for reporting and other purposes.
  • Access Authorized Signer is available to “all new clients and current clients are being migrated to the tool,” the spokesperson said. It’s being used in “several countries across North America, EMEA, APAC and LatAm.”
  • For the member using it, the solution is a significant improvement over what had been a very decentralized process that “was all in spreadsheets,” she said. The portal offers the visibility and centralization the member wanted. It does not currently enable updating signer data within the portal; but requesting updates through email is not a problem for her.
  • “It’s going to be great when all banks are offering” similar digital signing portals, she said. However, “having to log into each portal and run a report is still going to be time consuming.” Another member said, “What I don’t like is that you have to go through a portal.” That leads directly to the other major issue for corporates joining forces: the desire to have signer data flow from banks to their TMSs.

Step 2: Standardization, APIs and TMSs. Yet another member, commenting on the solutions offered by Citi and J.P. Morgan, said she was “happy there was some small movement in the right direction. I think it’s a good Step 1. Step 2 would be getting that information into whatever work station you’re working with,” meaning a TMS.

  • Most everyone agreed with that assessment. But they also said that will require banks to agree on standard file formats and to work with TMS vendors. “I’d rather this be bank agnostic,” one member said. “We need it in our databases.”
  • That won’t happen overnight. “Banks are not ready is what I’m hearing,” one member said. She added that her TMS vendor is “not set up in a way to take all of that data and do something with it. You almost have to push in both directions or else it doesn’t move.”
  • Pushing is exactly what the subgroup of the global cash and banking group will be doing in the weeks and months ahead, supported by NeuGroup. A draft list of priorities written this week includes: “Future Consideration—automatic transfer of data (via API) to TMS or other system to help us consolidate signers across various banks.”

Bank agnostic? Looking into bank-agnostic fintech solutions to relieve signer management pain is also on the agenda of some NeuGroup members. One member who saw a fintech demo its solution said, “it seemed like a great product.” But his company is using an eBAM tool offered by its TMS vendor. Another member said his company tries to create solutions on its own. “We typically choose to build over buy,” he said.

  • Whatever road corporates go down, one thing is clear, according to Ms. Zawacki-Lucci, the NeuGroup peer group leader: “The bottom line is that banks must digitize the signer information they have been warehousing in antiquated ways,” she said. “Where the technology for bank portals exists, it is unacceptable that the information isn’t readily available to managers of those accounts.”
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Sharpening Treasury’s Strategic Profile Means More Collaboration

Members share the rewards and obstacles of collaborations with FP&A, tech, tax and other functions.

Top treasurers are growing into more strategic roles and playing a greater part in decision-making at companies where finance is valued as true partner of the business. The function’s broader profile means treasury teams need to collaborate effectively and frequently with a variety of other functions within the enterprise. Doing that well ultimately pays off, but isn’t always easy.

  • In a recent session of NeuGroup for High Potentials, treasury managers and analysts shared experiences, triumphs and challenges of working with their most frequent collaborators. One consistent theme: It’s worth making an extra effort to foster strong relationships.

Members share the rewards and obstacles of collaborations with FP&A, tech, tax and other functions.

Top treasurers are growing into more strategic roles and playing a greater part in decision-making at companies where finance is valued as true partner of the business. The function’s broader profile means treasury teams need to collaborate effectively and frequently with a variety of other functions within the enterprise. Doing that well ultimately pays off, but isn’t always easy.

  • In a recent session of NeuGroup for High Potentials, treasury managers and analysts shared experiences, triumphs and challenges of working with their most frequent collaborators. One consistent theme: It’s worth making an extra effort to foster strong relationships.

Figure out FP&A. Treasury’s often uneasy collaboration with FP&A primarily revolves around forecasting—which the functions approach from different perspectives. So it’s no surprise members reported varying degrees of responsiveness when seeking help or information from FP&A teams. One member found the remedy for slow response times is putting treasury and FP&A under the same organizational umbrella.

  • “We started under the controllership and then moved under FP&A; we actually work much closer with FP&A now that we’re part of the same org, particularly on the cash forecast, aligning the direct and indirect approaches,” he said. “We’ve gotten much higher quality data, and obviously much better responsiveness now that we have the same goals.”
  • Another member sits on treasury’s capital markets team and said FP&A is a vital partner. “If we have board presentations coming up and slides we need help on, they can do that,” he said. The collaboration helps on capital allocation issues, “whether it’s the timing of repurchases, or when to issue bonds: When does the cash come in, and when does the cash go out?”

Technology ties. Most members have some support from corporate IT, but some feel they’re left to manage complex implementations themselves. Treasury at some tech companies, meanwhile, has greater access to IT budget and more latitude to experiment and collaborate. Regardless, regular meetings with tech teams can help overcome obstacles.

  • One member at a tech firm collaborates on a nearly daily basis with a dedicated fintech team that helps manage the TMS and adds value in other ways. “I feel like they sometimes have a different insight into what new business lines we’re going into and vice versa, so I pretty frequently touch base with that team,” she said.
  • Not everyone is in that position, of course. One member whose technology budget was recently slashed said she “doesn’t have anyone that supports us.” Treasury is in charge of the TMS and connections to banks, and only gets help from corporate IT on what she called “enterprise projects” like updating the company’s ERP.
  • While a lack of technology support can be a pain, strong relationship management can pay dividends, one member said. “Having gone through an ERP change and implementation, it really helps having a good relationship with our enterprise applications team who manage any internal software,” he said.
    • “What’s been really great is educating and teaching them treasury concepts—so they can then know what we need. Even not having a dedicated team, having close relationships and even just having recurring meetings with them has been really helpful for our team.”

Adjusting the payments machine. Multiple members are transitioning from a transactional focus on payments to a more strategic approach. Treasury teams that now prioritize smarter decisions on fund allocation and banking relationships need close collaboration with AP and AR.

  • “Treasury was very much a payment machine, we generated wires and all that kind of stuff,” one member said. “In my role now, we do move money around, but it’s usually more strategic: Where does the money need to be in the bank account?”
  • “There are a lot of guidelines and policies on payments that we have been a part of as they’ve been built up over time,” another member said. “As long as everybody is following those guidelines, we know what to expect from a cash perspective. Those kinds of things are part of the structure that’s put in place so we don’t have to have the day-to-day interaction with AR and AP.”

Sizing up tax and accounting. Nearly all members said the majority of accounting and tax operations are done separately from treasury, with interactions limited to reviewing, auditing or on a one-off basis—though some teams maintain more collaborative relationships.

  • One member has a dedicated accounting team within treasury that helps with day-to-day operations. “They come to us for verification, so we’re doing the accounting on the back end and then when it posts in our system,” he said. “We verify with controllership that it’s posting exactly what we thought. So that one is a shared function.”
  • Members from larger corporates said they typically have smooth collaboration with tax teams on day-to-day operations. “It’s tax and treasury work hand-in-hand every day,” one member said. “Operations fly!”
  • That’s not always the case for smaller teams. One member from a less mature company said, “For us, working with tax has been challenging. Sometimes it’s been working for different purposes—we are in separate departments and they roll up through controllership, and we roll up through corporate finance. They don’t have the same priorities at an organizational level.”

The spirit of collaboration. One member, describing treasury’s mostly non-existent relationship with procurement, neatly captured the spirit of the ideal state of his team’s interaction with all other functions: “Our day-to-day jobs don’t align, but we collaborate when our strategic objectives do.”

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Battling Bias To Boost Small Businesses: C2FO CEO Sandy Kemper

The CEO of a working capital platform says early payments can level the field for minority- and women-owned businesses.

slowing US economy and elevated interest rates are putting renewed focus on working capital management and the obstacles faced by many minority- and women-owned small businesses in obtaining bank loans in the current regulatory environment. One way around the problem: early payments that allow vendors to get paid faster and offer buyers a discount.

  • In a NeuGroup video you can watch by clicking the play button below, C2FO founder and CEO Sandy Kemper advocates for solutions and platforms like the one his company offers that bypass traditional loan processes where banks must assess credit risk, putting smaller businesses at a disadvantage.
  • Early payments address what Mr. Kemper describes as bias. “The only way you’re going to solve bias, or to a degree, perceived prejudice in the financial system, is to stop the process and the need to risk underwrite,” he says in the video. “When somebody gets paid early, there’s no risk to it.”

The CEO of a working capital platform says early payments can level the field for minority- and women-owned businesses.

slowing US economy and elevated interest rates are putting renewed focus on working capital management and the obstacles faced by many minority- and women-owned small businesses in obtaining bank loans in the current regulatory environment. One way around the problem: early payments that allow vendors to get paid faster and offer buyers a discount.

  • In a NeuGroup video you can watch by clicking the play button below, C2FO founder and CEO Sandy Kemper advocates for solutions and platforms like the one his company offers that bypass traditional loan processes where banks must assess credit risk, putting smaller businesses at a disadvantage.
  • Early payments address what Mr. Kemper describes as bias. “The only way you’re going to solve bias, or to a degree, perceived prejudice in the financial system, is to stop the process and the need to risk underwrite,” he says in the video. “When somebody gets paid early, there’s no risk to it.”

Less friction. The full conversation between Mr. Kemper and NeuGroup founder and CEO Joseph Neu will be released in the coming weeks on NeuGroup’s Strategic Finance Lab podcast. The interview includes the former bank CEO’s insights on reducing “friction” in financial marketplaces and how he applied his friction reduction mindset to the art market. Mr. Kemper—who lives with his family on a ranch along with horses and sheep—also discusses lessons he’s learned from nature and ecosystems.

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Talking Shop: Limits in Treasury for Approving Funds Transfers

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: Setting limits on the size of funds transfers that individuals on a treasury team can approve is a basic part of effective risk management, good governance and sensible treasury policies. The question is how to determine the dollar amounts. For context on the issue, NeuGroup Insights reached out to members with longtime experience in treasury.

Editor’s note: NeuGroup’s online communities provide members a forum to pose questions and give answers. Talking Shop shares valuable insights from these exchanges, anonymously. Send us your responses: [email protected].


Context: Setting limits on the size of funds transfers that individuals on a treasury team can approve is a basic part of effective risk management, good governance and sensible treasury policies. The question is how to determine the dollar amounts. For context on the issue, NeuGroup Insights reached out to members with longtime experience in treasury.

Whom do you trust? 
One of our veteran treasurers said trust is a major piece of the equation, both in selecting which team members can approve wire transfers and in determining the limit amounts. “The number is inconsequential compared to the trust factor,” he said.

  • His trust depends in part on the person’s level of experience and training. For a more junior member, the number “is big enough that they’re approving the things that come from the AP group from our shared service center. And small enough that I’m not worried we’re going to break the bank.”

How big are the wires? Setting limit levels requires knowing the amounts that treasury has had to approve in the past. “When thinking about approval levels, you may have a treasury director that can approve payments up to a certain dollar amount, an AT up to an amount above that and then the treasurer above that,” a different member said. “When you think about the appropriate dollar amounts for each of those people, you need to understand the dollar range of payments to be made.”

  • “To set the approval levels, you look at the history of payments over a certain time period (i.e., one month, one quarter, etc.). You don’t want to have a situation where the treasurer needs to approve all payments over $250,000 and they then find themselves approving 90% of the payments. You need to strike an appropriate balance to establish what they need to approve.”

Member question: “What limits for approving/releasing funds transfers within treasury do you have by level? Do you delineate limits between external transfers vs. intercompany account transfers?

  • “I am working on proposing increasing limits to approve/release wires handled by treasury. Although I have no limit as treasurer, the head of [treasury] operations only has $5 million, so there are a lot of wires that I end up releasing. We also have an additional director with a $500,000 approval/release limit.”

Peer answer 1: “Given that the sizes of organizations are different, I think instead of looking at the dollar amount, you need to look at the dollar size distribution of the payments and decide what the appropriate approval levels are. The backdrop is that by the time the payment comes to treasury, it would have gone through an internal approval process.

  • “By setting the level too low, as you said, you end up releasing everything. Also, you may want to have separate approval levels for reoccurring payments, such as debt principal and interest payments since those are known upfront.”

Member response: “Good suggestion on looking at payment distribution, which we are in the process of doing to derive a recommendation. In terms of internal approvals, many of our payments are for treasury related items, so we are usually the ones who have approved the item for payment.”

Peer answer 2: 
“The treasurer and assistant treasurer have unlimited limits, primarily due to the potential for large internal transactions and milestone payments. A third individual in treasury has unlimited limits for internal transactions but has an external limit of $25 million.”

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Taking Advantage of the Cloud Stall

Smart treasuries are building and testing solutions to drive transformation, not waiting for cloud-based ERP implementations.

By Joseph Neu

NeuGroup’s 2024 Treasury and Finance Agenda Survey provides a backdrop that helps illuminate how smart treasuries are not letting what I have dubbed the “cloud stall” impede their progress toward digital transformation. The stall occurs when treasury waits for an enterprise to implement a cloud-based ERP—and the treasury functionality ERP vendors are developing—to drive technological advancement. By contrast, smart treasuries are taking advantage of the waiting time created by the cloud stall to experiment and build their own solutions, sometimes with help from internal and external resources.

  • These treasuries are implementing a new-generation of cloud-based applications that can be deployed quickly, are relatively inexpensive and integrate well in a cloud architecture to analyze data to drive decision-making. They provide an example of what others would be well advised to emulate to avoid a stall that sends the treasury plane falling from the sky.

Smart treasuries are building and testing solutions to drive transformation, not waiting for cloud-based ERP implementations.

By Joseph Neu

NeuGroup’s 2024 Treasury and Finance Agenda Survey provides a backdrop that helps illuminate how smart treasuries are not letting what I have dubbed the “cloud stall” impede their progress toward digital transformation. The stall occurs when treasury waits for an enterprise to implement a cloud-based ERP—and the treasury functionality ERP vendors are developing—to drive technological advancement. By contrast, smart treasuries are taking advantage of the waiting time created by the cloud stall to experiment and build their own solutions, sometimes with help from internal and external resources.

  • These treasuries are implementing a new-generation of cloud-based applications that can be deployed quickly, are relatively inexpensive and integrate well in a cloud architecture to analyze data to drive decision-making. They provide an example of what others would be well advised to emulate to avoid a stall that sends the treasury plane falling from the sky.
  • Recent examples of how smart treasuries at NeuGroup member companies are pushing ahead with self-built treasury technology solutions include a yearslong project at a large manufacturer to transform cash forecasting with the help of data scientist “wizards” who have built a number of algorithmic models based on statistical time theories, machine learning, neural networks and regressions, among other tools.
  • These and other examples, including treasuries building their own data dashboards using Tableau and Power BI or bolting on solutions from third-party vendors, have implications for ERP providers: They may find that their efforts to advance functionality for treasury, aiming to fulfill a longstanding goal to make a dedicated treasury management system (TMS) obsolete, will be too little, too late in comparison to what treasury teams implement while they wait.

The survey backdrop: unrealized expectations. Every year, treasurers predict a significant migration to cloud-based applications, yet adoption is not keeping up. As the chart below indicates, the percentage of NeuGroup members with over 80% of their current finance applications in the cloud is not keeping pace with the expectation to reach that threshold over the next 12-24 months.

Based on discussions with members during 2023, I believe the lengthy timelines for cloud-based ERP migrations may be to blame. You are doing well if you go live on the third scheduled go-live date, and usually that involves compromising on going live with all the desired treasury functionality. Plus, while more enterprises are being convinced that a cloud-based ERP will allow them to forgo a dedicated TMS, the timeline for the ERP implementation causes many to end up making the case for a cloud-native TMS anyway.

Time for TMS transformation. 
Current cloud-native TMS adoption has barely changed since 2022, although the survey shows that the vast majority of respondents (56%) expect to have a cloud-native TMS in place over the next 24 months, and 43% already have one.

  • Even here, traditional TMS providers may see market demand disrupted. This speaks to a lack of implementation resources and longer-than-expected timelines for new application rollouts and upgrades. These may not be as long as with ERP installations; but the question is whether TMS vendors keep up with the pressure for digital accelerations.

Smart automation. While cloud migration has stalled, the implementation of smart automation solutions rose sharply between 2022 and 2023, with more expected this year. Some of the most significant gains were in tools that eliminate manual intervention to free up staff to focus on value-creating work like decision support.

Year-over-year:

  • RPA adoption more than doubled.
  • Advanced analytics solutions adoption surged from 7% in 2022 to 17% in 2023.
  • AI and machine learning jumped from no current adoption to 13%.

Niche systems and API connectivity on the rise. Comprehensive systems change may be lagging, but niche systems enabled by cloud-based application integration or fed from data lakes show a significant rise. The same can be said for API connectivity in general, showing a significant rise in adoption (see charts).

If the niche systems play well with data from other sources and enjoy API connectivity while delivering the functionality leading treasuries seek, it will be easier to retain them once ERP projects are completed—if they are competitively priced. Moreover, the new niche systems may be modules of a single provider that may all but replace the need for a traditional TMS.

Mastering the data.
 Meanwhile, treasuries are focused on mastering data. Bringing it from a variety of sources, including out of the stalled ERP upgrade, into a data lake or warehouse is a major part of this. But the more important piece is master data management. As the chart below shows, less than a majority of respondents will have adopted master data management tools over the next two years, with 31% having them currently.

  • That needs to change. If you have the data housed and mastered, plus tools to analyze it, workflow automation to execute transactions from it and a governance and control overlay, what more do you need?

Final thought. Here’s the big risk for traditional software vendors, starting with ERP providers that are not keeping pace with digital acceleration: Their treasury customers will pull out of the stall and decide they’re flying higher than they would if they waited for a finally-ready-to-go-live, cloud-based ERP. I doubt treasury is alone with this trend. Of course, if all the applications play well with each other in the cloud, then everyone can still win.

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Fitch Economist Olu Sonola Sees Mixed Bag for Corporates in 2024

Companies face cooling inflation but elevated wage growth amid a slowing economy with recession unlikely.

In a Strategic Finance Lab podcast you can listen to on Apple and Spotify, Fitch Ratings’ head of US Regional Economics Olu Sonola paints a relatively positive picture of the economic outlook in 2024, thanks in large part to the strength of the US consumer and declining inflation.

  • “The balance sheet of the US consumer is very, very strong,” he tells NeuGroup Peer Group leader Andy Podolsky in the podcast recorded in December 2023 and sponsored by Fitch.
  • This week, Fitch raised its annual real consumer spending forecast for 2024 to 1.3% from 0.6%, “reflecting the ongoing willingness and ability of consumers to draw down buffers of excess savings.”

Companies face cooling inflation but elevated wage growth amid a slowing economy with recession unlikely.

In a Strategic Finance Lab podcast you can listen to on Apple and Spotify, Fitch Ratings’ head of US Regional Economics Olu Sonola paints a relatively positive picture of the economic outlook in 2024, thanks in large part to the strength of the US consumer and declining inflation.

  • “The balance sheet of the US consumer is very, very strong,” he tells NeuGroup Peer Group leader Andy Podolsky in the podcast recorded in December 2023 and sponsored by Fitch.
  • This week, Fitch raised its annual real consumer spending forecast for 2024 to 1.3% from 0.6%, “reflecting the ongoing willingness and ability of consumers to draw down buffers of excess savings.”

Mixed picture. That said, Mr. Sonola forecasts that both consumer spending and US GDP growth will slow this year from 2023, with negative implications for corporate revenues, especially for companies whose customers are on the lower end of the income scale, he explains in the podcast.

  • And although inflation will slow, companies will not have the same ability to pass on higher costs, he said. Combine that with wage growth that Mr. Sonola says is “still elevated” as well as higher interest expense but lower investment yields and corporates will see an erosion of margins this year.
Olu Sonola, Fitch Ratings

Along with recession, NeuGroup members surveyed in 2023 cited high borrowing costs as one of the top risks for this year. Those fears have tempered as a so-called soft landing for the economy appears more likely. But don’t expect the Fed to cut interest rates in March, Mr. Sonola said. Fitch forecasts cuts in the middle of the year, with the federal funds rate declining 75 basis points to 4.75% by the end of 2024.

  • But he expects highly-leveraged companies with lower credit ratings will need to refinance debt sooner than investment-grade corporates, meaning they “are going to be much more exposed to a higher rate environment,” noting that rates remain significantly elevated compared to three years ago.
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Treasury Leadership Is Alive and Well in Texas

Insights from member meetups in Austin and Houston, distilled by NeuGroup’s founder and CEO.

By Joseph Neu

Treasury leadership is alive and well in Texas. That’s one big-picture takeaway from my trip to the state last week. I was there to talk with treasurers—and leadership was on my mind. Here are some themes that surfaced, divided into three sections:

Why are you a treasurer?
 I asked that question at a salon dinner for members hosted by NeuGroup in Austin. In addition to “why,” the answers also highlighted how each person rose to the position of treasurer.

Insights from member meetups in Austin and Houston, distilled by NeuGroup’s founder and CEO.

By Joseph Neu

Treasury leadership is alive and well in Texas. That’s one big-picture takeaway from my trip to the state last week. I was there to talk with treasurers—and leadership was on my mind. Here are some themes that surfaced, divided into three sections:

Why are you a treasurer?
 I asked that question at a salon dinner for members hosted by NeuGroup in Austin. In addition to “why,” the answers also highlighted how each person rose to the position of treasurer.

  • Quality treasurers beget quality treasurers. What’s interesting is that no one present set out to become a treasurer. Instead, they learned about its attractions and advantages after coming into contact with a high-quality treasury team led by a top-notch treasurer during some phase of their finance career (i.e., on the job and not in school)—either on the banking or corporate side.
  • Strategic, please. Most members in Austin were drawn much more to being a strategic treasurer than one with a more administrative role. Strategic treasurers develop a deep understanding of the business so their teams can enable it. On a lighter note, in many cases, nobody in the company really knows what you do, yet it sounds like you are a supersmart rocket scientist. That gives you some sway to do things that add strategic value.
  • An important stop for CFO. Members were split on whether they wanted to become chief financial officer, with a number saying yes to CFO aspirations and a few saying they would prefer to remain treasurer. All agreed that working with a CFO who had been a treasurer made their jobs easier, especially if the CFO lets the treasurer be the treasurer. A good working relationship between treasurer and CFO is essential.

Treasury KPIs: Are they bold enough? The topic of treasury key performance indicators (KPIs) came up while I visited treasurers in Houston. Here are some discussion points to help answer the question:

  • Be bolder about enhancing business revenue. Efforts to enhance the revenue of the business can always be bolder, according to some back-and-forth among treasurers. Yes, the skewing of treasury KPIs toward cost reduction metrics deepened after some teams sought to profit from financial transactions, e.g., derivatives. But if treasury can instead enhance the revenue and profitability of the businesses it supports, then why not reward the function with profit-oriented goals and objectives?
  • Promote treasury leadership more boldly. The other area to strengthen KPIs is around treasury leadership. In a recent podcast, I discussed the correlation between top-performing companies and treasury leadership with Ron Chakravarti, head of global treasury advisory at Citi Treasury and Trade Solutions. He co-authored a study by Citi GPS demonstrating that companies with superior financial performance have leading treasuries. This should help both inspire treasurers to set bold treasury leadership goals and make the business case for resources to meet bold KPIs.
  • Treasury performance aligned to investors. If your treasury is in doubt about what KPIs to prioritize, think about what investors want. Ron emphasizes that treasury KPIs should be aligned to what matters to investors and that starts with a philosophy and mindset that treasury is there to support top-line growth and profitability. Accordingly, each goal should align to thinking about the business and what it may need to grow.

Development and retention of treasury talent. My conversations in Texas also touched on the critical component of talent in treasury leadership. Three takeaways:

  • Teach treasury well. Treasurers continue to find it challenging to recruit, develop and retain treasury talent, particularly at less senior levels. Thinking back to the Austin discussion about why members are treasurers, it is imperative to teach treasury well to produce future treasury leaders. These leaders will also be attracted to a strategic treasury mindset, so teach that approach.
  • Connect staff with peers to grow knowledge. A big part of learning is found in sharing and learning with peers. In conversations with treasurers about joining NeuGroup, for example, their first reaction is often focused on how it will help their staffs develop professionally. Whether it’s with NeuGroup or another means, treasury leaders develop better with networks that source and validate new ideas and best practices.
  • Be a talent exporter. Great treasury organizations will invariably see top people leave to lead treasury at other companies. One sure sign of a leading corporate treasury is that many of the team’s graduates are treasurers elsewhere, making some treasurer meetups feel like one company’s alumni gatherings. This reality of top talent moving up and out is one reason CFOs who have been effective treasury leaders may try to retain top performers by helping them find compelling career paths within their own organizations, outside of treasury. Exporting talent this way counts, too. The problem is that love of treasury can be hard to undo!
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Dollar-Denominated Bonds in Argentina Draw Corporate Interest

USD-denominated Bopreal bonds offer a way for subsidiaries in Argentina to pay debts owed to US-based parents.

The Argentine subsidiaries of some NeuGroup member multinationals are buying so-called Bopreal bonds that Argentina started selling late last year to help importers pay off debt—including money subsidiaries owe parent companies. The bonds are providing relief to corporates with cash trapped in a country with strict capital controls, hyperinflation and a heavily devalued currency.

  • Bopreals are dollar-denominated but can be purchased with Argentine pesos at the country’s official FX rate. They can only be used to pay outstanding invoices for goods delivered before December 12, 2023.

USD-denominated Bopreal bonds offer a way for subsidiaries in Argentina to pay debts owed to US-based parents.

The Argentine subsidiaries of some NeuGroup member multinationals are buying so-called Bopreal bonds that Argentina started selling late last year to help importers pay off debt—including money subsidiaries owe parent companies. The bonds are providing relief to corporates with cash trapped in a country with strict capital controls, hyperinflation and a heavily devalued currency.

  • Bopreals are dollar-denominated but can be purchased with Argentine pesos at the country’s official FX rate. They can only be used to pay outstanding invoices for goods delivered before December 12, 2023.
  • The bonds offer an attractive option to corporates with limited ways to get money out of Argentina. One of the more popular, called a blue-chip swap, carries an unfavorable, unofficial exchange rate and requires companies using it to wait another 90 days until accessing the country’s official FX market.
  • In recent NeuGroup sessions and online conversations, members have raised questions about Bopreals. To clear up any remaining confusion about these complex bonds, NeuGroup’s Argentina Crisis Community will meet in a virtual session on February 7 with experts from Banco Comafi to discuss upcoming auctions.

Buy, then sell. This week, one member based in Argentina bought Bopreals that will be used to make a payment to foreign vendors. The member plans to sell the securities in the secondary market.

  • In a recent NeuGroup session, Martin Merlo from Banco Comafi said he has seen the bonds sell for 60% to 70% of their original value in the secondary market. The other option would be holding the bonds until maturity, although members have indicated vendors are unwilling to wait years for payment.
  • One benefit of selling in the secondary market, according to members, is that a corporate can then access the blue-chip swap market starting April 1 to raise the remaining percentage of the invoice in USD, while remaining exempt from the 90-day required waiting period—a special exemption for the first series of sales.
  • So, if a corporate were to buy $1 million in Bopreal and sell the bonds, the amount they transfer to the vendor outside Argentina might only be $700,000. Because the vendor still wants the remaining amount, the Argentine entity could do a blue-chip swap to raise the remaining $300,000 without the 90-day penalty.
  • One US-based exporter had been told that accepting the bonds directly from the company’s customers was the only option for payment. But, following conversations with members, he now plans to suggest the buyers in Argentina sell the bonds on the secondary market.

Uncertainty ahead for invoices behind. Two more series of Bopreal bonds are on the horizon, with maturities in 2025 and 2026. The member said these will likely be aimed at smaller companies, as they carry less favorable conditions than the first series, including taxes and restrictions on secondary market sales. (The first series, exempt from the country’s 30% tax on outgoing cash, mature in 2027.)

  • “I don’t think you’ll get better conditions than what you will get now if you want access to dollars,” Mr. Merlo from Banco Comafi said.
  • A member responded, “If you don’t take advantage, those imports might be locked up for a long time.”
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Risk Readiness: ERM’s Key Role in Business Continuity Planning

Amid rising geopolitical, climate and cyber risks, enterprise risk managers play an important part in preparation plans.

Recent natural disasters, cyberattacks and wars in Ukraine and Gaza are underscoring the importance of developing robust business continuity plans (BCPs) to ensure companies can keep operating in the aftermath of a crisis. The current, volatile state of affairs is also drawing attention to the value enterprise risk management (ERM) teams bring to business continuity management, including the identification of risks that could require the use of BCPs.

  • A recent session of NeuGroup for Enterprise Risk Management made clear that collaboration between ERM and business continuity teams is both widespread and essential. Members participate in the development of plans, tabletop exercises, education and risk frameworks for BCPs.

Amid rising geopolitical, climate and cyber risks, enterprise risk managers play an important part in preparation plans.

Recent natural disasters, cyberattacks and wars in Ukraine and Gaza are underscoring the importance of developing robust business continuity plans (BCPs) to ensure companies can keep operating in the aftermath of a crisis. The current, volatile state of affairs is also drawing attention to the value enterprise risk management (ERM) teams bring to business continuity management, including the identification of risks that could require the use of BCPs.

  • A recent session of NeuGroup for Enterprise Risk Management made clear that collaboration between ERM and business continuity teams is both widespread and essential. Members participate in the development of plans, tabletop exercises, education and risk frameworks for BCPs.
  • “We basically make sure that we’re in sync on what they’re seeing,” one member said, referring to his company’s business continuity team. “They talk to some of the stakeholders we do, so we stay pretty aligned with them.”

Different structures, common purpose. Business continuity teams sit within a variety of functions, including ERM, quality, operations, finance and security. Members discussed the pros and cons of business continuity teams consisting of dedicated team members or subject matter experts from multiple teams. Whatever the structure, though, the goal of integrating ERM within the continuity planning process is increasing readiness.

  • One ERM member shares staff with the business continuity team, which spends much of its time going to different units ensuring that plans are in place. Business continuity also connects closely with the crisis management team that sits under corporate security. The key to this structure working is cross-functional collaboration.
  • One member whose business continuity team sits within ERM said this about the BCP: “We set the framework, and we have our critical partners from supply chain, facilities, etc. They have their own designated plans, and we have a requirement where everyone needs to do their tabletop exercise every year. Then ERM provides an update to our board committees.”
  • Another member added, “I’m not responsible, but I partner with our business continuity office. We are doing a relaunch, if you will. We want to restructure it and refine some areas, so I’m partnering with them to help navigate through the company and look at things from a high level, risk-down perspective.”

Calling out climate change. One member mentioned the tornado that destroyed a Pfizer warehouse last summer, another example of the rising risks of natural disasters that ERM must communicate to the C-Suite. “We’re starting to call out climate change to our leadership,” he said.

  • That’s a smart move: This member’s company recently suffered the total loss of a data center that ran local manufacturing in a European country. “So when the flood hit, crisis management runs the show and business continuity comes along to make sure that all the things they’ve been doing in tabletop exercises gets operationalized.”
  • The event revealed the company had key risk management infrastructure in place. “In some ways it was actually pretty remarkable how quickly the team was able to mobilize,” the member said. “Within a week, they pretty much got operations back to normal. Now it’s a matter of going and getting the equipment and rebuilding the data center—ideally in a place that won’t flood.”

Preparation pays off. In NeuGroup’s 2024 Finance and Treasury Agenda Survey, members ranked geopolitical conditions the fourth biggest risk facing their companies. Given that backdrop, companies have tasked risk managers with gaming out scenarios to judge readiness. One member recently reported the results of tabletop exercises to the board.

  • The company has a large credit and collection team in Romania which, due to its proximity to Ukraine, is at risk of a disruption in operations. To test preparedness, the company told the whole unit to stop work for two weeks and focus on longer-term projects. “We turned the whole team off without any warning and looked at how other teams around the world did picking up their work.”
  • The exercise turned out to be something of a success. The member said that there were “a lot of lessons learned. Nobody freaked out.”
  • The member’s company also ran a tabletop exercise focused on Israel a couple of weeks before the war in Gaza began. The timing of the exercise meant “now we can use what we learned then, live for the event itself,” he said.

Aha moments. Another escalating risk causing corporates to reassess their BCPs is cyberattacks. One member had run a mock crisis exercise just the week before a high-profile cyberattack was carried out on another company.

  • “Through that, there were some ‘ahas!’ that this isn’t going to be a 48-hour event. This could be several weeks and the ramifications could go on for several months after that,” he said.
  • Another member sees room for improvement in their business continuity setup. “I don’t think the cybersecurity and BCP are as well integrated as they should be. We are having a tabletop exercise next month.”
  • Several members shared that their companies have a separate cybersecurity council in their corporate structure that must work closely with their business continuity and ERM teams.

Overcoming obstacles. In a perfect world, ERM would work hand in glove with the business continuity team, but in reality it’s not always so simple.

  • One member shared, “I had participated in some of the local tabletops at manufacturing sites some years ago, and now they are managing them more locally.”
  • The company is planning a cyber tabletop exercise, and the member added, “I managed to get myself invited to this cyber tabletop but I had to force my way through the door and promise to not speak.”
  • A different member’s company’s cyber and crisis committees do not yet include IA or ERM in their exercises. The member added, “I have not pushed just yet for that. There are other priorities from a resource, bandwidth standpoint.”
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Speeding Ahead: How EY Fueled a Six-Month TMS Takeoff

Working with EY, one corporate went from the RFP stage to actively making FX hedge trades in half a year.

When one employee responsible for a corporate global order-to-cash process was tasked with upgrading to a new TMS—during a company-wide S/4HANA implementation—she knew she was in for a long and bumpy ride. But with the help of EY, the company was using the TMS for hedging in less than a year, with more functionality still to come.

  • In a recent NeuGroup virtual session, the global process owner who led the TMS implementation presented alongside EY’s Kenny Echendu and Angelina Ilchenko. They shared insights on the journey from RFP to go-live—including why the company started with Kyriba’s FX risk management functionality.

Working with EY, one corporate went from the RFP stage to actively making FX hedge trades in half a year.

When one employee responsible for a corporate global order-to-cash process was tasked with upgrading to a new TMS—during a company-wide S/4HANA implementation—she knew she was in for a long and bumpy ride. But with the help of EY, the company was using the TMS for hedging in less than a year, with more functionality still to come.

  • In a recent NeuGroup virtual session, the global process owner who led the TMS implementation presented alongside EY’s Kenny Echendu and Angelina Ilchenko. They shared insights on the journey from RFP to go-live—including why the company started with Kyriba’s FX risk management functionality.
  • “One of the big value props we had was on FX risk management, because we didn’t have good insight into FX exposure data,” the presenter from the corporate said in the session. “And the reason we did the FX component first was really its speed-to-value,” she added.

Mismatched data. Before the TMS implementation process, the company’s exposure data was spread across a number of ERPs, with details provided via monthly spreadsheets submitted by business units.

  • “The details were in systems that treasury didn’t have access to,” she said. “And we were losing money on hedging because we didn’t get the right visibility into the FX exposure data.”
  • The company’s treasurer wanted a single TMS that would integrate well with S/4HANA and allow the treasury team to have a single source of truth and phase out other legacy systems.
  • “EY helped us in modeling, doing due diligence to help ensure we selected the right solution based on our requirements,” the presenter said. “The FX component that we saw with Kyriba, particularly FiREapps, really won the day, especially with how user-friendly Kyriba is.”

Pre-implementation: cleaning up. Because data was split across several tools and many steps taken were undefined, undocumented processes, the treasury team still had plenty to do before Kyriba was ready to launch.

  • “You should not cut corners in the design phase,” said Mr. Echendu. “Well-documented processes will serve you well.”
  • During the process review, the treasury team discovered a problem: Some business units used different definitions of a monetary asset (e.g., cash and cash investments). This could lead to a major problem given treasury relies on these units to provide exposure data.
    • “We knew that data was going to be a problem, but I must admit we didn’t realize it was going to be quite as big of a problem,” the presenter said. “And that was a big area we spent a lot of time on.”
  • In the planning phase, EY also aided with ensuring each user had the right amount of access. “Understanding how roles, as defined in Kyriba, grant access—that was an area that required a lot of work,” the presenter said. “EY helped us to repurpose the profiles and roles to work for us.”

Going live: improved processes. Within six months of bringing on EY to aid in the implementation, the treasury team began using Kyriba to execute cash flow and balance sheet hedging programs.

  • The presenter highlighted a shift to a unified approach to hedging, using a single rate table across all ERPs. In prior processes, various teams used different tools to pull different currency rate tables based on region and send them to treasury.
    • EY helped discover that the treasury team was converting mark-to-market values to functional currencies of the entities before posting them to a shared database. Subsequently, they were converting these values to USD, which EY recognized as an unnecessary step in the workflow.
  • The company has also automated several accounting processes related to hedging within Kyriba, including generating journal entries for most hedging instruments.

Post-implementation: Change management never ends. EY is now aiding the treasury team as it configures Kyriba’s cash and investment management modules. But as companies enter new phases of TMS implementation, Mr. Echendu stressed that one of the greatest ongoing risks is missed opportunities that arise from resources not being used to their full potential—including employees that operate without proper knowledge of the system.

  • One common issue that causes teams to fail to leverage new systems’ full capabilities is employee turnover—when one, well-trained team member leaves, and the replacement isn’t properly caught up to speed on the project.
  • “After the go-live, change management is often left to the user, especially during the period right after a system launch,” Mr. Echendu said. “So, it can be frustrating, and maybe even lead to abandonment.”

At the end of the session, Ms. Ilchenko summarized the two key takeaways from the process that corporates undertaking a similar initiative should keep in mind:

  1. Don’t underestimate the preparation and planning stages. “We always say that if you plan and design, implementation will go smoother,” she said, emphasizing the importance of training and documentation ahead of the implementation.
  2. Keep working on change management. “Continue checking on how your teams are using the TMS and if they run into any problems after deployment,” she said. “This can help utilize the TMS system in the best way, and not revert back to Excel or manual processes.” Consultants like EY are often retained to facilitate post-implementation reviews which help to sustain and protect the new investment.
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A Citi Expert’s Mission: Help Treasury Leaders Reach New Heights

Citi’s Ron Chakravarti discusses the keys to treasury success on a new episode of the Strategic Finance Lab podcast.

Few people in the world of banking know as much about how corporate treasury teams can raise their games and bring more value to companies than Ron Chakravarti, head of global treasury advisory at Citi Treasury and Trade Solutions. His insights are backed by the experience of advising hundreds of companies looking to improve their management of liquidity, working capital and risk.

Citi’s Ron Chakravarti discusses the keys to treasury success on a new episode of the Strategic Finance Lab podcast.

Few people in the world of banking know as much about how corporate treasury teams can raise their games and bring more value to companies than Ron Chakravarti, head of global treasury advisory at Citi Treasury and Trade Solutions. His insights are backed by the experience of advising hundreds of companies looking to improve their management of liquidity, working capital and risk.

  • In the latest episode of NeuGroup’s Strategic Finance Lab podcast available on Apple and Spotify, Mr. Chakravarti shares those insights with NeuGroup founder and CEO Joseph Neu. Their conversation includes takeaways from Treasury Leadership: Does it Matter?, a Citi GPS study Mr. Chakravarti co-authored.
  • Based on a survey of over 300 Citi clients, the study concludes that companies that deliver superior financial performance also have top-performing treasury leaders and teams.
Ron Chakravarti, Citi

“The data does come through, that treasury leadership does matter,” he says in the podcast. “And the investment and deployment of technology is a key part of getting there.”

  • A self-described “citizen of the world,” Mr. Chakravarti also discusses his upbringing—including stints living in India, the UK, the US, Hong Kong and Singapore—and his lifelong love of reading science fiction.
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