Six things to look out for on the way up
And they have tackled them well: These days, managing the complexity of payment streams and exchange rate risks would be inconceivable without a professionally run treasury department. Perhaps the only surprising thing is that this development seems to have bypassed many small and medium-sized enterprises (SMEs).
For many of these firms, telephone trading, a bouquet of banking partners and the good old hoard of cash stashed away in a cupboard are still business as usual. This article briefly explains what steps must be taken so that smaller companies too can get in shape for the treasury needs of the 21st century.
Blind spots and inefficiencies are eliminated, simplifying the decision-making process and allowing better use to be made of available resources.
To inject professionalism into treasury processes and organisations, made-to-measure solutions are now available on the market for corporate customers of every shape and size. Standard TMS systems – available only at enormous expense not so very long ago – can now also be scaled down. Which is good news, as smaller firms in particular often do not need the full spectrum of modern treasury functionality for their business. A global value-at-risk model, for instance, is better suited to large corporations.
On the other hand, virtually every business will derive benefits from system-based scheduling, liquidity forecasts, the inventorying of derivatives and loans, an electronic trading solution and a central payment transaction platform.