International Treasury & Cash Management (Advanced)

Introduction
Corporate Treasury Today
The evolution of treasury and cash management as critical functions in the company

• Risk Management in treasury
• Funding the operating cycle
• The importance of cash and liquidity management
• Trends in today’s treasury market
• Organisation and structure of treasury in MNCs
• Managing treasury as a global process
• The changing role of the corporate treasurer
• Centralising treasury functions
• Treasury in an ERP world
• Passive or active treasury models

Risk, Funding & Exposures

Risk management strategies in treasury

• The right treasury policy
• Identifying exposures and strategies to manage them
• Categories of Financial Risk
• Understanding the instruments for hedging and risk mitigation
• Defining an appropriate Hedging strategy
• Transactional, Cash Flow and Balance Sheet Hedging
• Risk models – VAR

Funding, Yield Curves, Fair Value Accounting

Optimising Funding/Investment choices

• FX Funding (T+2), Local market T or Cross Currency Pool
• Borrow, Spot, Invest – Using FX Currency Swaps
• Managing to the yield curve
• Implied future LIBOR rates from yield curve
• Matching duration of funding to cashflow
• Fair value accounting for IRS and other derivatives
• Impact of tenor on cost of funds and investment returns
• IAS 39 and IFRS 9 – Fair value accounting

Exercise – Impact of Basel III on bank pricing

Cost of Tier 1 capital to banks and impacts on pricing for bank products

• Basel III – Impact on Corporate Treasury
• How Basel III impacts banks and their products

Treasury Centralisation and structures

How centralised should a treasury be today?

• Levels of treasury responsibility
• Decentralised, distributed or centralised treasury
• Full centralisation – regional or global?
• In-house banking – what are the advantages and disadvantages?
• Outsourcing treasury functions
• Typical treasury structures
• What fits your size of organisation?
• Passive or active treasury processes
• Centralising exposure management – intercompany FX

Optimising Global Liquidity Management

Creating visibility and mobilising liquidity globally

• Principles of Liquidity Management
• Summary of Notional pooling vs Target Balancing
• Documentation for notional pooling
• New developments in cross-border pooling
• Understanding cross-border rules and impact in cash concentration
• Cross-currency pooling structures – Interest Optimisation
• Interest Enhancement Opportunities
• Multi-bank concentration structures
• Leveraging trapped liquidity
• Hybrid structures combining cash concentration with notional pooling
• ‘Follow-the-sun’ and ‘Against the sun’ structures
• Creating a global liquidity structure
• Tax and legal issues in documentation
• Generating active or passive income
• Impact of IAS 39 and Basel II/III

Choice of treasury vehicle for liquidity

Case Study: Chocoholics

Understanding the flows, risks and treasury metrics of a multinational

• Mapping flows, currency balance, exposures
• Intercompany flows, liquidity and bank relationship impacts
• Treasury metrics and prioritisation

Tax Efficient Structures

Intermediating flows and exposures in a tax optimised way

• Reasons for establishing treasury centres vehicles
• Which locations are right?
• Tax implications of a treasury vehicle
• Tax neutral or tax advantaged
• Impact on OECD BEPS rules on treasury centres
• Popular legal structures – Europe, Off-shore, Asia Pacific and LatAm

Trends in Treasury Management

What treasurers are saying at EuroFinance conferences as the key issues for the year ahead

End of Day 1

Working Capital and Commercial Flows

Key principles of Working Capital Management and maximising efficiency of commercial payments and receipts

• Cash Conversion Cycle – CCC, DPO, DSO, DIO
• Cash Management efficiency techniques
• Funding working capital and releasing under-utilised cash
• Weighted Average Cost of Capital
• Optimising financial metrics – off balance sheet

Intermediating Commercial Flows, Payments Factories and Shared Services

Shared service centres and payment factories – tools to optimise treasury and take control

• The business case for shared services
• Benchmarking SSC processes
• Centralising vs Outsourcing
• Benefits of centralising administrative processes
• Creating efficient accounts payable processes
• Role of ERP systems in commercial flows
• Using commercial cards and p-cards for procurement and T&E
• Integration with procurement systems and platforms

Techniques for Commercial Flows

New challenges when regionalising commercial flows

• What can be achieved in ERP
• ‘On behalf of’ collections and payments (POBO/COBO)
• In-house cash banking
• Case study – Treasury ERP

Domestic Payments

How money moves and settles domestically

• Domestic Clearing Infrastructure and key concepts
• Changing payments infrastructure
• Eurozone payment and clearing options – Life after SEPA
• Comparison of regional systems – Americas/African/European/ Asian examples
• Specialised local instruments
• Emerging Payment methods – Faster Payments, Mobile, Blockchain, Open Banking, API and PSD2

International Payments

Moving money across borders efficiently to minimise charges and loss of availability

• SWIFT and International money movement
• Using intermediary or correspondent banks
• Serial Payments vs Pay Direct with Cover
• The types of messages and when they are used
• Regional Payment systems
• Using BICs, IBANs and UIDs
• Implications of OFAC and AML
• Currency check collections and bankers drafts
• Letters of Credit and Documentary collections

Account Structure for Commercial & Treasury Flows

Principles for account location – where to hold them and how to manage them

• Easy countries and problem countries – examining different scenarios
• Integrating resident and non-resident accounts
• Impact of Euro/SEPA on account structures
• Importance of establishing correct ownership
• Incorporating netting, inter-company funding and centralised liquidity
• Approaches to regional and global liquidity management structures
• Centralised or decentralised account structures
• Linking in a treasury centre or an in-house bank
• Integrating concentration, notional pooling, POBO/ROBO, interest optimisation, interest enhancement and funding

The Evolving Regulatory and Governance/Risk Frameworks

Treasury compliance and policy challenges

• Framework of policies and procedures
• Impending Money Market Fund Reforms EU and US
• Compliance – AML and KYC procedures for banks and treasurers
• EMIR and Dodd Frank reporting
• Intercompany loan pricing considerations

Principles of Working Capital & Cash Management Efficiency

Working capital – what is a ‘sufficient’ cash buffer?

• Order to Cash and Purchase to Pay cycles
• Eliminating cash cycle times
• Automation of receivables matching
• Electronic bill presentment and payments
• E-invoicing and dispute management

Supply Chain Financing

The new face of trade solutions in your supply chain

• The financial supply chain
• P&L vs balance sheet management
• Measures of working capital performance
• Examples of ‘buy-side’ and ‘sell-side’ financing
• Supplier financing programs
• Achieving off-balance sheet financing
• Accounting implications of receivables finance
• Electronic solutions and technology developments
• Documentation and logistics

Exercise – Improve liquidity or improve Return on Assets

Using financing to deliver cheaper funding and/or improving financial ratios

End of day 2

Building Treasury Dashboards with Business Intelligence

How to use the latest business intelligence and TMS systems

• Key reporting components, KPIs, KRIs and KLIs
• Data visualisation and charts
• Data warehouse, data layer, analytical model
• Including data from ERP, Excel models, rates services
• Delivery on mobile, tablet and PC
• Commonly used reporting platforms

Cash Forecasting

Cash forecasting precision is critical for funding efficiently and managing cash

• Objectives of Cash Forecasting
• Long, Medium and Short term
• Direct vs Indirect method
• Statistical vs Items level forecasting
• Models for Cash Forecasting (Miller-Orr, Baumol)
• Separating Payables and Receivables
• ERP Bank reconciliation
• Tools for Forecasting

Leveraging an ERP for Treasury

Integrating ERP systems into today’s treasury – the new treasury models and next level of efficiency

• Treasury systems versus ERP systems
• Cash management and cash forecasting modules
• Integrating In-House Cash modules
• Role of treasury in ERP process definition
• Implementing receivables matching in ERP
• Aligning ERP with Treasury
• ERP Deployment and new business models
• Challenges of Implementation
• Technology Platforms for Payments Factories
• Payments Factory as an alternative to ERP

Treasury Technology

Assessing the critical functions of a treasury management system

• Functionality of Treasury Systems
• Web based FX trading
• Treasury functionality within ERP systems
• Selection, implementation and integration of treasury management systems
• Latest trends and enhancements
• Benchmarking your system
• How much customisation
• System integration case studies

Banking Systems & Corporate SWIFT

Linking electronic banking and SWIFT to the corporate treasury management system

• Typical bank proprietary channels
• Multi banking aggregation
• Corporate access to SWIFT – MA-CUGs and SCORE
• SWIFT FileACT and FIN
• SWIFT Bureau, SWIFT Alliance Lite 2, or direct connection
• Proprietary or Industry standards
• Managing the documentation issues
• Objectives for systems integration
• Control, contingency and security

Integration and International Standards

What to look out for in different technology choices – avoiding ‘the bleeding edge of technology’

• Current internationally accepted standards
• ISO20022 vs EDIFACT, ANSI, iDoc
• Work flow management and reconciliation
• SAP Financial Services Network (FSN)
• eBAM, SWIFT 3Skey and Reference Data
• Emerging technologies

Fraud and CyberCrime

• Treasury policies to protect your treasury
• Common cyber attacks today
• Phishing, spoofing and social engineering
• Hardening systems and firewalls
• Encryption and authentication controls
• Recovery plan from a cyber attack

Selecting Banking Partners

Understanding what is ‘best practice’ (mandates, relationship) when choosing bank relationships

• Critical requirements for multinational corporates
• Bank geographic strategies
• Local or regional banks?
• Supporting credit banks
• Approaches to pricing and service quality
• Corporate organisation matches
• Right bank or right solution

The International RFP process

What to look for in structuring a good RFP or tender document to get the best proposal from bankers

• Selecting a bank and services
• The tender document – what to include
• RFP Process checklist – what should your expectations be?
• Handling the short-list and negotiation meetings
• Identifying and pre-qualifying banks
• How banks structure their proposals
• How to evaluate the bank responses – benchmarks, formats

Class Exercise: Choosing the right bank

Prioritising your banking requirements

• Selecting banks for cash management services in a foreign country
• Focus on corporate requirements and bank selection process
• Impact of credit on relationships
• How banks propose viable solutions and differentiate themselves

What to expect in the future

What to expect in the coming year and beyond

• Policy agenda issues for treasurers
• New banking products
• Key infrastructure developments

Course wrap-up

• Summarising Treasury Management
• Treasury Management Quiz
• Review of Objectives
• Lessons learned

End of course