FP&ATechnologyTreasury Management

Sharpening Treasury’s Strategic Profile Means More Collaboration

By February 14, 2024No Comments

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.”

Justin Jones

Author Justin Jones

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