Kyriba: 7 Experts on Activating Liquidity

Sponsored by
Experts on
Activating Liquidity
Leverage technology to optimize treasury and finance,
extend visibility and controls, and maximize
enterprise value.

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INTRODUCTION
Active Liquidity Management
Managing liquidity has never been easy, but new technologies are making it easier. With ease comes speed,
accuracy and efficiency, enabling treasury to more effectively see, move and protect cash and generate increased
business value. However, activating liquidity while navigating volatile markets can be difficult. So how does
treasury leverage technology to activate liquidity and generate new growth, and what does it gain by doing so?
With the generous support of Kyriba, we explored this question in greater detail by asking seven treasury
management experts from different industries the following questions:
1. How does expanding the scope of treasury to be inclusive of cash, risk, payments and working capital
increase enterprise value?
2. How do you most effectively manage FX risk exposure, and why is it important to do that?
3. What are the advantages of centralizing and standardizing global payment processes through a
single system?
4. What are the advantages of centralizing the management of free cash flow and liquidity in your organization?
5. What level of integration is necessary to get a true, real-time view of cash and liquidity, and how would that
real-time data enhance decision making and performance?
Their insights are collected in the five chapters of this eBook. In reading them, I was struck by how different the
challenges are for their businesses and how they all benefit from greater visibility into cash, payments, risk and
working capital. If you are involved in treasury and finance, I believe you will appreciate this glimpse into the value
of a holistic treasury view.
© 2020 Mighty Guides, Inc. I 9920 Moorings Drive I Jacksonville, Florida 32257 I 516-360-2622 I www.mightyguides.com
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All the best,
David Rogelberg
Editor

3
CFOs have a tough balancing act – trying to pursue strategic growth initiatives while minding the right level
of risk. And recent global events have exacerbated this challenge.
The answer to solving this problem lies in Active Liquidity – an approach to treasury and finance that elevates
the impact of liquidity to generate new market value, even in volatile markets.
Kyriba is excited to sponsor this eBook, in which seven treasury leaders lend their expertise to the concept
of Active Liquidity and the key pieces that it encompasses – optimizing cash, payments and risk to generate
business value.
You will find in this eBook that Activating Liquidity puts organizations on a path to new value creation,
enabling them to:
• Expand the abilities of treasury and finance, using liquidity as a lever to build value
• Extend visibility and controls to see, move, protect and grow cash
• Transform data into intelligence and drive action to maximize enterprise value
Kyriba is a proud sponsor of this Mighty Guide, and we hope that the insights given by these treasury
executives give you a deeper understanding of the benefits of Active Liquidity and how insight into global
cash, liquidity and exposure can help you execute your treasury strategies more easily and efficiently. Please
enjoy this guide.
Best regards,
Bob Stark
Vice President, Strategy
Kyriba
Kyriba empowers CFOs and their
teams to transform how they activate
liquidity as a dynamic, real-time
vehicle for growth and value creation,
while also protecting against
financial risk. Kyriba’s pioneering
Active Liquidity Network connects
internal applications for treasury,
risk, payments and working capital,
with vital external sources such
as banks, ERPs, trading platforms,
market data providers, and other
financial institutions. Based on
a secure, highly scalable SaaS
platform that leverages artificial
and business intelligence on an
API-enabled architecture, Kyriba
enables thousands of companies
worldwide to maximize growth
opportunities, protect against loss
from fraud and financial risk, and
reduce costs through advanced
automation. Kyriba is headquartered
in San Diego, with offices in New
York, Paris, London, Tokyo, Dubai
and other major locations. For more
information, visit www.kyriba.com.
FOREWORD

CHAPTER 1
Value of Treasury Management 07
CHAPTER 2
Managing FX Risk 18
CHAPTER 3
Centralizing Global Payments 31
CHAPTER 4
Working Capital Management 44
CHAPTER 5
Holistic View 57
TABLE OF CONTENTS
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MEET OUR EXPERTS
ADAM DAY
AVP & Associate Treasurer,
Rutgers, The State University of
New Jersey
PATRICK GRAMLING
Chief Financial Officer,
The IRONMAN Group
ANTHONY KWONG
Deputy Chief Financial Officer,
Gemini Rosemont Commercial
Real Estate
ROB MACNEIL
Global Treasury Risk Manager,
Cooke Inc.
KJELL AANSLOEKKEN
Director of International Treasury,
MTD Products Inc
TOM PITTET
Vice President, Investor Relations,
Chart Industries, Inc.
MATTHEW HANSEN
Assistant Treasurer,
Marriott Vacations Worldwide
Corporation

Payments can be simple — with Kyriba
DRIVE
INNOVATION
IMPROVE
EFFICIENCY
DEFEN D
AGAINST FRAUD
WORKDAY
ER P
INTERNA L
SYSTEM S
TREASURY
MANUAL
PAYMENTS
BANK S
BANK S
BANK S
NON-BANK S
FRAUD
DETECTION
BANKING
CONNECTIVITY
FORMAT
TRANSFORMATION
PAYMENT
CONTROL

7
VALUE OF TREASURY
MANAGEMENT
CHAPTER 1
Treasury plays different roles in different
organizations, but many companies, particularly
global organizations and those with complex
funding requirements, have found value in
making treasury a more strategic player in
cash and liquidity management. In looking
more closely at what treasury has to offer, it’s
apparent that its value goes beyond just greater
operational efficiencies.
We explored treasury’s role by asking our experts
the following question:
How does expanding the scope of
treasury to include cash, risk, payments,
and working capital increase its value to
the enterprise?
7

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“When you look at cash, risk, payments and working
capital holistically, you’re able to manage them more
closely and make better decisions about tradeoffs.”
Cash, risk, payments and working capital are all closely related, and managing
them involves tradeoffs. When you look at these elements holistically, you’re
able to manage them more closely and make better decisions about
those tradeoffs.
For most traditional higher education institutions, cash flows are relatively
predictable and consistent. The tuition cycle drives much of this flow. There’s
also research, which can be variable but is typically steady. With research,
you have expenses such as payroll and supplies; you then invoice the sponsor
after the fact. Those expenses tend to be consistent, without huge spikes.
Invoicing and cash receipts tend to be consistent, as well. Endowment
income is also part of the pie. All endowments work more or less the same
way: They have a return target, which could be something like seven, eight
or nine percent annualized. Then, a distribution policy sets a value for
distribution to the university—say, four percent—the idea being that it can
go on forever. The goal of the endowment is to earn enough to keep up with
inflation, provide a predictable distribution to the university and maintain its
value indefinitely.
Adam Day is AVP & associate
treasurer at Rutgers University,
with responsibility for the university’s
treasury function including day
-to-day treasury operations, cash
and liquidity, investment of working
capital, management of debt
and the internal bank, and oversight
of the risk management
and insurance function. Adam is a
certified treasury professional (CTP)
and holds a BA in economics from
Rutgers University and an MBA from
NYU’s Stern School of Business.
Adam Day,
New Jersey

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We try to forecast and manage our cash and our investments
closely to avoid borrowing too much or not investing enough.
That practice extends to many things, including operational cash
flow, capital investments and risk. For instance, how much do we
self-insure versus spending on purchased insurance? How do we
manage interest rate risk and foreign exchange risk? A holistic
view of treasury makes it possible to balance all these things.

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“Poorly managed treasury can have a big negative effect
on enterprise value. Companies don’t go bankrupt because
they report bad numbers. They struggle because they run
out of cash.”
If you want to feel the pulse of a company, dig into treasury. That’s where
you will see what’s happening. Accounting and financial reporting often
tend to be after the fact. You record what happened, but there’s nothing
you can really do about it because it’s not actionable. Treasury is where
you can really feel the lifeblood of the operation, and a big part of that is
looking forward. You’re trying to preemptively avoid any type of risk: You
are engaged in liquidity planning.
Treasury plays a crucial role in creating value in the business, whether
it’s managing liquidity to support internally funded initiatives or enabling
borrowing or buying back stock. That forward-looking perspective helps
avoid issues that can negatively affect value. The flip side of the value
question is that poorly managed treasury can have a big negative effect
on enterprise value. Companies don’t go bankrupt because they report
bad numbers. They struggle because they run out of cash. Anticipating
liquidity needs and having access to liquidity in the right place and at
the right time is crucial.
Kjell Aansloekken is the director of international
treasury with MTD Products Inc, a global
manufacturer of outdoor power equipment
based in Valley City, OH. Kjell led the
implementation of Kyriba at MTD which
has transformed the treasury processes
company wide and allowed for standardization,
automation and efficiency improvements.
Prior to MTD, he was the treasury manager
with IMG Worldwide and treasury analyst
and later treasury manager with Electrolux.
Kjell has 16 years of in-depth treasury experience
after two years of accounting experience
with a firm in his native country of Norway.
Kjell Aansloekken,
MTD Products Inc

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It seems that more and more demands are being placed on treasury these
days. It’s no longer just about moving operating cash around or ad hoc
management and operational questions about where the money is going.
Organizations are looking for proactive cash management. They want to see
how corporate activities are being funded and how debt is being managed at
all times. Strategic involvement by treasury is critically important to manage
capital more efficiently and in ways that reduce an organization’s
risk exposure.
Treasury decisions trigger other decisions that have a cumulative effect on
how the business moves forward. That forward-looking perspective—and
applying it more strategically in the business overall—enhances the
business’ value.
Starting his career in Hong Kong
in Asia’s financial hub, Anthony has spent
his early career in financial accounting,
reporting and compliance. With global
vision being cultivated, he moved to the
U.S. and is currently deputy chief financial
officer of Gemini Rosemont, a commercial
real estate investment firm based
in Los Angeles. He is running local
and international finance and treasury
management, financial accounting
and tax for global investors in this real
estate investment platform.
“Organizations are looking for proactive cash management.
They want to see how corporate activities are being funded
and how debt is being managed at all times.”
Anthony Kwong,
Real Estate

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“The more treasury is involved, the more that other
parts of the business listen to treasury or involve
it in the decision-making processes, the better off
the organization is as a whole.”
Treasury has the ability to increase enterprise value if it is
structured the right way. Some companies keep working capital
management within the treasury realm, and some do not. The
treasury mindset of being as aggressive as possible in managing
working capital coupled with treasury’s knowledge of the tools
available to do that enable the business to get the greatest value
out of its working capital. Sometimes, companies make accounts
payable and receivable back-office functions. As a result, they aren’t
pushed to be as aggressive as they could be with working capital or
work to maximize those numbers.
From an insurance perspective, risk management is really just
balance sheet management. It’s a question of deciding which risk
you want to take off the table and pay for and which risks you’re
willing to take within the organization. In the end, it’s a cash and
balance sheet management decision. Treasury adds value there.
Tom Pittet is the vice president, investor
relations at Chart Industries, Inc. (NASDAQ:
GTLS). He joined the company in April of 2017
serving as the director of treasury and has
served various roles in investor relations, tax
and treasury. Prior to joining Chart, he served
various roles with Fiserv, Inc (NASDAQ: FISV),
Global Payments, Inc (NYSE: GPN), and United
Parcel Service, Inc (NYSE: UPS). Mr. Pittet
holds a Bachelor of Business Administration
in computer information systems from
Georgia State University and is a certified
treasury professional.
Tom Pittet,

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One thing that’s often difficult for treasury is bringing value to the
business. Treasury works in capital markets to provide liquidity
for the organization; beyond that, treasury is more a cost center
that maintains bank accounts and manages cash. Without
becoming more strategic and looking at the overall company and
cash flow, it’s more difficult for treasury to add value. The more
treasury is involved, the more other parts of the business listen to
treasury or involve it in the decision-making processes, the better
off the organization is as a whole.

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Having a total view of all aspects of cash and risk is critical, and actively
managing liquidity increases enterprise value. Even for companies that are
not publicly traded, if you take a step back and think of it as the value of
the enterprise, making yourself more liquid increases value to the extent
that you’re able to meet future obligations, make investments and grow. It’s
critical, and it requires close management daily.
To gain that view, treasury must work closely with accounts payable to
manage payments. It must manage cash and finance working capital.
Treasury must touch everything that has any effect on cash. If it’s coming in
the door, treasury needs to see it. If it’s going out the door, treasury needs to
see that, too. If it’s financial risk, treasury needs to manage it. Treasury must
be involved in planning for all these things. When it is, treasury increases
the value of the enterprise as a whole.
Rob MacNeil leads global treasury at Cooke
Inc. Before joining Cooke, he worked in
corporate treasury for a multinational oil
company and in corporate banking for a
Canadian bank. He earned his Master’s
in Business Administration from McGill
University and his Bachelor of Arts from
Hamilton College. Rob is a Chartered
Financial Analyst charter holder and
received the certified treasury professional
designation from the Association of
Financial Professionals.
“Making yourself more liquid increases value to the
extent that you’re able to meet future obligations, make
investments and grow.”
Rob MacNeil,
Cooke Inc.

1515
Matthew Hansen has nearly twenty
years of experience working in global
financial markets. He joined Marriott
Vacations Worldwide Corporation in 2005
and currently serves as the assistant
treasurer, where he manages the
company’s capital markets activities and
interest rate / currency risk management
programs. Matt earned a BS from the
University of Central Florida and is a
CFA charterholder.
“Efficiencies are gained and cost-saving opportunities arise when
less human resource time is required . . . . With that, you get better
liquidity management, improved cash forecasting, more accurate
identification of currency risks, optimization of working capital and
improved bank relationships.”
Matthew Hansen,
Marriott Vacations Worldwide Corporation
When you talk about active liquidity management, you’re talking about
moving from operational treasury management to strategic treasury
management. Moving to strategic treasury management has several benefits.
Efficiencies are gained and cost-saving opportunities arise when less human
resource time is required for the day-to-day blocking and tackling of treasury
operations. In this way, the treasury team spends more time on strategic
initiatives, which enables it to take on more of a leadership role in the
organization. With that, you get better liquidity management, improved cash
forecasting, more accurate identification of currency risks, optimization of
working capital and improved bank relationships.
A strategic treasury team can positively impact the weighted average cost
of an organization’s capital, and that flows straight to the bottom line in the
form of net profit on the income statement. In addition, treasury can optimize
working capital and minimize the amount of debt outstanding at any given
time. That, too, affects the bottom line, which drives stakeholder value and
shareholder value within any publicly traded company.

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“As the company improves its ability to manage its
cash, we can put more cash to work.”
In our business, treasury handles everything related to cash
and working capital management, including accounts payable,
accounts receivable and foreign exchange risk management.
We put on events all around the world, and the cash these
events generate funds new events. The more cash trapped on
our balance sheet that we can unlock, the more events we can
acquire without having to find other sources of capital.
This process increases the value of the business because
as the company improves its ability to manage its cash, we
can put more cash to work. We put on 250 events a year
throughout the world and we have more than 100 bank
accounts around the world. At any given time, we have a lot of
cash on the balance sheet. Our growth is based on our ability
to either build events from scratch or acquire existing events.
Value grows as we grow the business, so being able to unlock
trapped cash is a way to continue to grow our business.
Patrick Gramling, chief financial officer of
The IRONMAN® Group, has more than
15 years of experience as the leader of
finance/accounting teams. Since joining
The IRONMAN® Group in 2012, he has
completed a sale of the company, an
IPO, two refinancings and more than
40 international acquisitions. Prior to
IRONMAN, Patrick served as an EY
assurance partner, where he had more
than 19 years of experience.
Patrick Gramling,
The IRONMAN Group

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Key Points
• Cash, risk, payments and working capital are all key
factors in activating corporate liquidity, but managing
them involves tradeoffs. When you look at them
holistically, you can manage them more closely and
make better business decisions.
• A strategic treasury team can affect the weighted
average cost of an organization’s capital and that flows
straight to the bottom line in the form of net profit on the
income statement, which drives stakeholder value and
shareholder value.
• The more treasury gets involved and the more other
areas listen to treasury or involve it in the strategic
decision-making processes, the better off the
organization is as a whole.

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MANAGING FX RISK
CHAPTER 2
The risk of losing money through poor foreign
exchange (FX) management is an ongoing concern
for companies that have global operations. Lack
of visibility into currency exposures and inaccurate
forecasting make FX risk-mitigation decisions
difficult, yet taking no action can be just as costly as
taking the wrong action.
To learn more about how people manage their FX
risk and why it’s important to do so, we asked our
experts the following question:
How do you most effectively manage FX
risk exposure, and why is it important to
do that?
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“Managing FX risk for ongoing business activities is
challenging because it requires predictive analysis based
on a lot of internal information about incoming and
outgoing cash.”
There are two aspects to FX risk management. There is the accounting
translation risk of cash sitting in overseas bank accounts and the gains
or losses you can realize when you repatriate that cash. Then, there’s the
transaction risk of business activities, such as receivables or payables, in
those foreign currencies. Both of these risks can affect profit and loss.
Managing cash in foreign banks is a traditional treasury management
function carried out through a treasury management system that tracks bank
balances. Managing FX risk for ongoing business activities is challenging
because it requires predictive analysis based on a lot of internal information
about incoming and outgoing cash. That information may be scattered
around the organization. It could be in an enterprise resource planning (ERP)
system as payables and receivables, but then there are contract-based
activities that have not yet been recorded as a payable or receivable. As a
result, it’s difficult to find the information that will give you the predictive
insights you need to manage FX risk for business activities. It requires
relationships with local business managers, a process for collecting that
information and making sure that those managers understand what you need
and why it’s important. Tools that consolidate that information are a big help
in managing FX risk.
Adam Day,
New Jersey
-to-day treasury Operations, cash

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“Accurately understanding your FX exposure is key
to hedging properly and avoiding costly mistakes.”
Accurately understanding your FX exposure is key to hedging
properly and avoiding costly mistakes. If you think you have a
certain exposure but it’s something different from an accounting
perspective, putting a hedge against that exposure could create an
entirely different situation. You’ve paid to put an FX trade in place
and you’ve put your balance sheet out of balance, which increases
your risk. Now, you have a compounding problem. It’s vital that the
information coming into your process is 100 percent accurate and
that you understand how all the pieces fit together. Otherwise, you
could be creating FX exposure instead of mitigating it.
To avoid that and properly manage risk, your organization
requires access to all the information coming into treasury. It
must understand where information gaps exist. Every company
is different. Some have the luxury of all the information coming
through one channel into one system, which makes it easy to pull
that information out. Most organizations, however, have multiple
back ends—a challenge when the company is global and dealing
with different currencies.
Tom Pittet,
Tom Pittet is the vice president, Investor
Relations at Chart Industries, Inc. (NASDAQ:

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You really have to understand your back end, how it’s put
together and where the gaps are when you’re trying to
consolidate this information to get a global view. One missing
legal entity or bank account can throw off your hedge.
We work with Kyriba to monitor our exposures in real time.
Kyriba gives us the insight we need to make decisions about
how much we want to hedge. Once we get to the point that
we’re hedging, then we’re working with our partner banks or
placing hedges online through our brokerage accounts to
execute those trades. We monitor the activity, which enables us
to stay on top of our FX exposure.

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Visibility into cash flow across the different currencies that affect your
business is essential. We have tools in place that give us a good sense
of our exposure, both from a cash flow and a balance sheet perspective.
We have a policy in place and we’re active and opportunistic in how we
manage our foreign exposure.
We actively monitor about 20 currency pairs, 10 of which directly affect
our operations because of our business activities in particular countries.
Many of the world’s businesses sell in U.S. dollars despite not being in the
United States. We try to give our customers the ability to pay in their local
currency because we’re comfortable that we can manage that risk. That
helps us provide benefits to our customers that may not be offered by
other suppliers. So, we actively use currency management to potentially
gain additional business.
“Visibility into cash flow across the different currencies
that affect your business is essential.”
Rob MacNeil,
Cooke Inc.

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“Companies that are not confident in their data can find
themselves executing on lower hedge ratios, which would
reduce the effectiveness of any hedge program. Even worse,
they may not feel it prudent to hedge at all.”
Matthew Hansen,
We operate not just here in the United States but in the Caribbean, Europe
and Asia. The FX picture is complicated not just because of the number of
currency risk exposures, but also due to the fact that some markets have
currency controls. For example, in Indonesia we have to be mindful of how
we think about currency risk, not just in terms of our activities but also
with respect to market regulations.
We use our ERP tool to identify currency risk exposures. We have
standard policies that require local teams in foreign markets to coordinate
their cash and currency needs with the centralized corporate treasury
function. That way, we can effectively track the related currency risk
exposures in real time. We execute currency trades through a digital
platform that provides us with currency pricing transparency and
competitive bidding by currency dealers. We use the same platform for
trade settlement. It gives us an efficient end-to-end solution. We would
not have that efficiency through the more traditional methods of currency
trading over the phone and currency settlement over email.
CFA charterholder.

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The key to making all this work is visibility into your cash flow and
currency data. Companies that are not confident in their data can
find themselves executing on lower hedge ratios, which would
reduce the effectiveness of any hedge program. Even worse,
they may not feel it prudent to hedge at all given the uncertainty
and lack of confidence they have in the data. Also, they would
miss natural hedging opportunities. Hedging currencies through
derivatives involves carrying costs that you can avoid if you can
take advantage of natural hedging opportunities. That becomes
difficult without good data visibility.

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Any large company engaged in global transactions needs to pay close
attention to its FX exposure. That requires systems that can monitor
cash and currency data and track hedging instruments. There are many
ways to hedge FX. Treasury relies on expertise, software tools, currency
reports and real-time cash analysis to manage these elements. Treasury
must understand what’s happening in the countries in which the
company operates. Otherwise, the loss could be significant.
Our business acquires commercial properties in the United States,
so we don’t have significant risk exposures from foreign currencies.
We monitor currencies, but not to the same extent as companies that
manage many global transactions every day.
Our greatest exposures from foreign currency involve the capital
injection to our fund and distributions to international investors.
However, those are predictable. We know that when we earn money we
will be moving capital into our fund, so it becomes a matter of timing.
“Treasury relies on expertise, software tools, currency
reports and real-time cash analysis to manage these
elements. Treasury must understand what’s happening in
the countries in which the company operates. Otherwise, the
loss could be significant.”
Anthony Kwong,
Real Estate

26
“Uncontrolled variances in areas like FX create
uncertainty that can be challenging to manage. We want
to make sure that we protect ourselves economically
against known volatilities.”
The best way to manage FX exposure depends partly on the type of
business you’re in. For example, is your business publicly traded or
privately held? Is it a high-margin or low-margin business, and how much
impact does currency volatility have on that margin? How do you sell
product internationally? Some companies need to keep a close watch on
operational and currency data; others perhaps, not so much.
In our case, we are not a publicly-traded company. We have a little more
flexibility to take a holistic economic view of how to manage FX and not
just attempt to reduce the impact to EPS for any given reporting period.
We ship product that’s built in the United States overseas, charging
for that inventory in U.S. dollars. In a way, we’re exporting our currency
exposure. Now in treasury, we inherit that exposure. For example, when
an overseas affiliate buys that inventory, we are giving them U.S. dollar
exposure. We manage that process by hedging the exposure from a
settlement perspective. We track forecasts and sometimes purchase
orders and invoices to our overseas affiliates to estimate the exposures.
The focus is on reducing risks and protecting our margins.
Kjell Aansloekken,
MTD Products Inc

27
Tracking FX risk is important and can have a big impact on
our financials. Uncontrolled variances in areas like FX create
uncertainty that can be challenging to manage. We want to
make sure that we protect ourselves economically against
known volatilities.

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“The risk of not having good data about the cash
you have and where best to keep it is that you run
the risk of that currency devaluing, and then all of a
sudden you have less money.”
At the present time, we have no automated way to manage FX
exposure. We manage currency risks with forward contracts and certain
other derivatives, but we currently don’t have any automated way to
do that. We have someone go to all our foreign bank accounts online
every day, download the balances, and then key the numbers into a
spreadsheet. In that way, we have a daily running total of our balances
by currency.
To some extent, we are naturally hedged against currency fluctuations.
A large portion of our revenue comes from event registrations. In nearly
every country where we operate, we accept registration fees in the local
currency. We also pay our bills in the local currency. So, to the extent
that our expenses match our revenues, there’s no real currency risk. The
risk we have concerns the amount of local currency we take in above
what we pay out in that local currency. We don’t have a formal process
yet to manage that, so it’s a risk for us.
Patrick Gramling,
The IRONMAN Group

29
We are implementing a treasury management system right now
that will enable us to track currencies across different banks,
giving us real-time access to that information. We have a way
to get all the currency information from all the bank accounts
into one place so that we can then absorb that information,
in real time, into our treasury management system. The
treasury management system will really help us manage cash
movements back and forth among countries. Eventually, it will
help us predict our currency needs going forward with greater
accuracy and more historical balance, enabling us to move our
cash more proactively.
The risk of not having good data about the cash you have and
where best to keep it is that you run the risk of that currency
devaluing, and then all of a sudden you have less money. That’s
the real risk for us: not being able to move cash because you
don’t have enough insight to know whether you should or can.
You always run the risk that just sitting there, your cash is
evaporating. Our new treasury management system will enable
us to make better decisions about that.

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Key Points
• Companies that are not confident in their data can find
themselves executing on lower hedge ratios, which
would reduce the effectiveness of any hedge program.
• Treasury has the expertise to manage FX risk, but it
needs tools that give it visibility into what currencies it
has exposure to and where those exposures lie. It must
understand what’s happening in the countries in which
the business operates.
• Managing FX risk requires predictive analysis based
on internal information about incoming and outgoing
cash. To avoid creating exposure rather than mitigating
it, you need access to currency data that is 100 percent
accurate, complete and timely so that you can act on
that information and protect against currency risk.

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CENTRALIZING GLOBAL
PAYMENTS
CHAPTER 3
Global payments are a continual challenge for
treasury because of the number of people and
banks involved in making payments, the need to
track a complex array of payment instructions
and the possibility of both internal and external
payment fraud. Centralizing payments makes
these challenges easier to manage, but
centralizing payments can itself be a challenge
for some businesses.
We took a closer look at global payment issues
by asking our experts the following question:
What are the advantages of centralizing
and standardizing global payment
processes in a single system?
31

32
“Dealing with foreign payments adds an extra layer of
complexity that makes it more difficult to mitigate fraud.
Centralizing all payments through treasury can help
reduce the opportunity for payment fraud.”
There are two big challenges related to global payments. The first is having
payment instructions in advance. Without that forward-looking information,
you’re operating in a spot environment. The key is having the payable
information as soon as possible—maybe 45 days in advance. Ideally, you
want that information in your system. Then, you can decide whether to hedge
before the actual payment execution.
The other big challenge is protecting against payment fraud, whether
domestic or international. Multiple risks exist here. The most common risk
is business email compromise. Such compromise can lead to a change in
vendor payment instructions so that the next time an invoice is processed,
you’re sending it to a fraudster instead of to the actual vendor.
Adam Day,
New Jersey

33
Fraud in international payments can be particularly challenging
because of language and time zone differences. In addition,
vendor relationships are often held locally rather than through
a central or corporate procurement or accounts payable
department. When changes are made, the process becomes
cloudier. It’s not necessarily the trained procurement person who
knows the correct process for validating a change. Such people
are dealing with their own internal departments and differing
systems may handle different aspects of the relationship. For
instance, vendor self-enrollment may be done in the United
States, but not for foreign payments. Dealing with foreign
payments adds an extra layer of complexity that makes it more
difficult to mitigate fraud. Centralizing all payments through
treasury can help reduce the opportunity for payment fraud.

34
“A centralized system greatly reduces the chance
of payment fraud, a growing area of pain and
concern around the world.”
Key advantages of a centralized payment system are visibility and
control for the treasury department. We don’t want treasury to get in
the way of doing business, but we do want to have that final check.
Ultimately, treasury has full responsibility for all the bank accounts
and all the cash in the organization. We want to make sure that all the
checks and balances are designed so that treasury gets a last look.
Treasury is there to create the mechanism for the payment so that the
business can operate. We’re there to make sure there’s enough cash or,
if we have to borrow, we’re sure the liquidity is there. We need to know
that we’re going through the optimal bank accounts and currencies.
Having one system and one point of visibility enables us to do that
with two or three staff members as opposed to 20 staff members
around the world looking at everything locally.
Another big advantage of a centralized payment system is scalability.
With a centralized system, it’s easier for treasury to ask the technology
provider to set up a new vendor or new bank and get the data flowing.
It all happens in the background with little paperwork.
Tom Pittet,

35
Also, a centralized system greatly reduces the chance of payment
fraud, a growing area of pain and concern around the world. With
a centralized system, treasury can quickly find all the account
reconciliation information it needs to research a questionable
payment. Without that information, some staff member may
have to call somebody in the United Kingdom or China or Hong
Kong to do the research and then get back with the information.
Treasury may need to sign in to 15 different bank platforms, with
everybody’s bank statements a little different. That’s just to find
the transaction. Then, there’s the research to see if something
isn’t right. Having all that information in one spot and being able
to click through it in real time enables you to work quickly and
efficiently with minimal staff involvement.

36
One centralized, global payment system makes it possible to create one
standard payment process. For example, we’re creating a centralized
process in which AP owns the vendor relationship and treasury owns
the cash. It is a segregation of duties. AP is given a budget, speaks to
the vendors, manages invoicing and initiates payments. Treasury makes
cash available for those payments and releases payments, to the extent
that the payment runs remain within budget. This approach provides
checks and balances in the payment system and it is uniform globally. It
also provides a structure that helps prevent payment fraud.
We use Kyriba’s payments and fraud modules to help mitigate both
internal and external payment fraud. Centralizing the payment process
and creating the segregation of duties helps eliminate opportunities for
internal payment fraud. To address external payment fraud risks, we
use Kyriba’s fraud module, which enables us to set up scenario-based
payment screening. In this way, we can screen for irregular payment
scenarios, such as sending payments to sanctioned countries, paying
a vendor multiple times in error, paying vendors in different currencies
than you’ve paid in the past, ensuring that that payment for that vendor
is executed based on the same instructions as the last payment, and
monitoring any changes in existing vendor details.
“A centralized payment system creates checks and
balances that help mitigate internal and external fraud
while standardizing the payment process globally.”
Rob MacNeil,
Cooke Inc.

37
A centralized payment system creates checks and balances that
help mitigate internal and external fraud while standardizing the
payment process globally.

38
“The payment policies we have in place ensure a consistent
process throughout the organization, and that results in better,
more effective liquidity management.”
Matthew Hansen,
We have a treasury management system that provides us with a global
view of our payments process. It enhances our disbursement controls.
We’ve set the system to automatically flag disbursements that meet
certain criteria. For example, if a disbursement is set up that’s over a
predefined dollar threshold, the system forces additional review. The
entire system has helped not only with the payment processing timeline
but also with better disbursement controls.
We have standards and policies that apply globally throughout the
organization. They enable us to accommodate local market conditions,
requirements and regulations. For greater tax efficiencies, we concentrate
cash at the corporate or international hub level, which enables us to
minimize our operating cash needs regionally. We typically do that
through automatic sweeps, which makes global cash management
efficient. The payment policies we have in place ensure a consistent
process throughout the organization, and that results in better, more
effective liquidity management.
CFA charterholder.

39
The advantage we gain from our global payments platform is assurance
that we’re making legitimate, timely payments. When working with
global investors and global vendors, questions about payments always
arise usually through email from different time zones. There are always
due diligence issues, especially now, in the current unpredictable fraud
environment. The treasury team needs to be sensitive about all of these
payments and we rely on the system to track our counterparts so that
we know if we’re receiving invoice emails from someone outside our
vendor list. A single payment platform mitigates some of these issues.
“When working with global investors and global vendors,
questions about payments always arise.... A single payment
platform mitigates some of these issues.”
Anthony Kwong,
Real Estate

40
“When we implemented our payments platform, a big win
was standardizing the payment processes across the
company. The payment system has [also] made us more
bank agnostic.”
Before we implemented a payment platform, we were decentralized and not
standardized from a process perspective. Most payables were made locally
using bank platforms and payments were not automatically generated.
Invoices and AP records were printed and then someone would manually
enter the information in a bank portal. It’s actually not that uncommon for
corporations to operate that way.
When we implemented our payment platform, a big win was standardizing
the payment processes across the company. No matter which enterprise
resource planning system the invoice came from, it went into a single
payment platform. That enabled us to maintain the vendor database in the
platform as well. We use the platform to run batch payments and send
them to the banks. For us, it was all about having one process. Visibility into
flows was crucial and we could make sure we had total control throughout
the world.
Kjell Aansloekken,
MTD Products Inc

41
We are now able to work toward centralizing more processes.
You can even start looking at things like shared service centers
to improve daily treasury operations. The platform has affected
our workflow in other ways, too. For instance, it has made us
more bank agnostic. Regardless of which bank holds our bank
accounts, we keep our payment processes the same from a
treasury perspective.
We’ve also lowered the risk of fraudulent payments through
improved visibility into the payment processes the platform
provides. It’s a huge risk to businesses in today’s environment.
We had to standardize payment processing and take as much
risk out of it as we could.

42
“When the treasury management system has been
fully implemented, we will be able to manage bank
transfers from one portal. This improvement will save
considerably on the labor involved, and that change
will be tangible to the business.”
One group of people from one office handles all of our global AP. The
treasury team makes sure that payments are made from the right
banks in the right currencies. The process is complicated because we
have to manage it on a bank-by-bank basis and we have at least 100
bank accounts globally. We have people signing in to each bank and
initiating electronic funds transfers.
When the treasury management system has been fully implemented,
we will be able to go to manage bank transfers from one portal. This
improvement will save considerably on the labor involved, and that
change will be tangible to the business. The treasury management
system will enable us to be much more efficient in how we make
payments, which will in turn enable us to grow further before we need to
add staff.
Patrick Gramling,
The IRONMAN Group

43
Key Points
• A centralized payment system creates checks and
balances that help mitigate internal and external fraud
while standardizing the payment process globally.
• Centralizing payments through a treasury management
platform makes you bank agnostic. From treasury’s
perspective, the payment process becomes the same
regardless of the bank or location.
• Having standardized payment policies that are
consistent throughout the organization results in better,
more effective liquidity management.

44
WORKING CAPITAL
MANAGEMENT
CHAPTER 4
Liquidity management is critical for providing
the business with the working capital it needs
to operate. Global businesses take different
approaches to managing their working capital,
and the way free cash flow varies considerably
by business type. Yet, all companies benefit
from optimizing their working capital, ultimately
allowing for increased business value.
To find how different organizations actively
manage liquidity and working capital, we asked
our experts the following question:
What are the advantages of centralizing
the management of free cash flow and
liquidity in your organization?
44

45
“Where the treasury management platform becomes so
important to us is in forecasting cash requirements.”
To answer that question, it helps to understand some of the peculiarities
of liquidity management in higher education. Higher education is a special
animal in terms of working capital. In most corporations, cash is owned
centrally. Everything is given up by the subsidiaries and it’s up to central
management to decide what to do with the cash. Some may be used to build
new facilities, develop new products or buy back stock. In higher education,
the cash we have and manage is an aggregate of all the units, schools and
departments. It’s cash those departments own and it has accumulated over
the life of their business activities, which for some schools can be hundreds
of years. Treasury can’t just spend it.
For example, even if we have the cash to fund a new building, we can’t use
that cash unless the department that will own the building owns the cash to
build it. We have to borrow for capital projects when a department doesn’t
have the cash, even when other departments have cash but aren’t building.
Adam Day,
New Jersey

46
We look closely at our expectations for borrowing versus use of
cash and we segment our cash into three tiers of investments.
The first is a longer-term tier invested in long-duration fixed
income and some equities. We have a middle tier that’s put
into one- to three-year fixed-income investments that we don’t
expect to touch for a few years. The largest bucket is short
term and follows the twin-peak curve of our tuition cycle. We
manage that closely through fixed-income investments and
money market funds. We also manage the short-term tier to be
as close to zero as possible at the low points in our
cycle—summertime and December, when tuition money has
been spent. Some years we’ll be a bit over; some years we’ll
issue commercial paper to bridge a month or so. That is
generally how we manage working capital.
We also have to balance the debt side, so we’re planning our
capital spending and our borrowing. We actually use an internal
bank structure to give loans to internal departments for capital
projects. We manage our weighted average cost of capital on
the whole and then charge a blended rate internally.
Where the treasury management platform becomes so
important to us is in forecasting cash requirements. From
a treasury perspective, we are not concerned about which
department owns which cash. For treasury, it’s more about the
scenarios in which cash is being spent. There are the normal
things, such as payroll and vendor payments, but we try to
predict the timing of the big drivers such as tuition and
capital spending.
The latter requires being close to the capital planning process
and understanding which new buildings are being built, how
much money is going to be borrowed and how much is going to
be equity or from our cash balance.
We have built forecasting into our treasury platform, and we’re
constantly refining the predictive models. Over time, that will
be a big help as we better understand the biggest material
drivers of our inflows and outflows. When we refine those
categories and see the history, then we can use that information
in treasury’s relationship with facilities so that they understand
how important it is for us to know cash flow schedules. They
have their own systems and eventually we will tie their systems
into the treasury management system to strengthen
our forecasting.

47
“Having the kind of view that a treasury management
system provides when it’s tied into other business
systems, banks and investments is essential for
forecasting and balancing working capital.”
Ours is one of those organizations where working capital is managed
outside of treasury, but we work closely with those people and
we’re all incentivized to make sure that our working capital is at an
appropriate level. We have a treasury management system that talks
to our enterprise resource planning (ERP) system, our banks and our
investment platform. This is essential for managing working capital
as closely as we do. We continuously look to see if our payables and
receivables financing programs are right for us. We are continuously
looking at our customer terms and supplier terms to get them to the
appropriate levels. So, we’re aggressive on the working capital side. Cash
is the lifeblood of any business, so it’s important to make sure that terms
are set up on payables and receivables so that the working capital is
appropriate for the business.
In our industry, our partners are flexible with us and happy to discuss
working capital. There are many ways to manage it and banks provide a
great medium for accelerating those payments and making other kinds
of arrangements. Having the kind of view that a treasury management
system provides when it’s tied into other business systems, banks and
investments is essential for forecasting and balancing working capital.
Tom Pittet,

48
“Liquidity and working capital management is central to our
business and a key function of treasury.”
Matthew Hansen,
Marriott Vacations Worldwide
Corporation
Liquidity and working capital management is central to our business
and a key function of treasury. In addition to our vacation exchange
business, we really have four business lines. We develop and sell vacation
ownership products, we manage vacation ownership resorts, we rent the
inventory at those resorts to the extent that they’re not yet sold and we
finance the purchases of timeshares. Approximately 62 percent of our
sales volume is financed by our customers through us.
One of the largest and most important sources of liquidity for us, which
is similar to others within the vacation ownership industry, comes by
way of the asset-backed securities market. Most of our customers who
choose to finance with us do so through a loan with a term of 10 years,
so it’s important that we can enhance liquidity by way of our securitization
program, which enables us to pull forward cash that otherwise we would
only be realized over the course of 10 years. In this way, we can improve
our cash-conversion cycle. We typically issue debt in that asset-backed
securities market once or twice a year. We also have a warehouse liquidity
facility with our bank group that enables us to monetize those receivables
between term securitization transactions.
CFA charterholder.

49
One other way we manage working capital is on the inventory
acquisition front. We’ll work with capital partners to source
inventory, using what we refer to as a capital efficient inventory
acquisition model. That model enables us to delay the capital
deployment for the inventory purchase until we really need the
inventory and the inventory is in a finished goods state.

50
Cash is the lifeblood of every organization. For a business to be a
successful company, it must proactively manage its working capital
sensibly and in a forward-looking way. We use a treasury management
system to enhance our cash management process and we are currently
designing a modest investment program to support our cash needs. The
treasury team must have visibility into everything that affects liquidity
and drives the need for working capital.
In our business of investing in commercial properties, the money we
invest is tied up in equity until we sell the property and can recycle the
money in five or 10 years. Our real estate fund’s working capital comes
from leases, mortgage financing and recapitalization. We work with
a variety of lenders with a goal of always improving the process and
transaction efficiencies. Corporate treasury really needs to understand
what happens on the operations side and it has a significant role in
determining how money is spent and how mortgages are structured.
“Cash is the lifeblood of every organization. For the
business to be successful, it must proactively manage its
working capital sensibly and in a forward-looking manner.”
Anthony Kwong,
Gemini Rosemont Commercial Real Estate

51
“Treasury’s function is to manage our working capital to
support our programs and our own operational needs.
Without that, the business would suffer.”
When it comes to liquidity and capital management, we are still not fully
automated. We are working on establishing a cash pool or liquidity structure
in Europe, which is something we have had in North America for a while.
That will help us significantly in our daily operations. We are currently
funding about a dozen countries on a regular basis through trade payables
and intercompany loans. Centralizing and automating the working capital
management will enable us to improve the processes. In addition, treasury
manages external debt through normal bank relationships and a few
instruments we have with other lenders.
One challenge for us is that our business is cyclical. We build spring/
summer inventory in the fall/winter, then we sell most of those products,
such as lawnmowers, in the spring and summer. In the summer, we build
snow equipment. There is six months of lead time between building
inventory and sales, and our spring/summer line is larger than the fall/
winter line. As a result, we go from being net investors for part of the year
to being net borrowers at other times. We manage this cycle through a
revolving line of credit with our bank group similar to most other corporates.
Kjell Aansloekken,
MTD Products Inc

52
We also have a supply chain program that we run with some
of our larger suppliers. We have finance programs that we run
for some of our customers, as well. We have a dealer network
program that provides them with good financing to help them
through the seasonal cycles. They often buy equipment in
January and they may not sell until August. If the customer is a
”big-box” retailer, it may not be a big issue because they closely
manage their working capital and have other sources of financing.
But smaller customers may not have the working capital to buy
the inventory they need when they need to buy it. We have dealer
programs like that for North America, Europe and Australia.
Treasury’s function is to manage our working capital to support
these programs and our own operational needs. Without that, the
business would suffer.

53
We require working capital financing due to the nature of our business.
For us, managing working capital means closely monitoring the cash
conversion cycle, specifically days sales outstanding and days payable
outstanding to ensure that we’re neither lagging too much on cash
coming in the door nor accelerating our payments and paying too
quickly. When you’re managing both ends of the spectrum in terms
of cash coming in and cash going out, centralized working capital
management improves your cash position and helps to self fund your
working capital needs.
In addition, to the extent that you can improve the cash available for
working capital and rely less on external financing, you become more
flexible in dealing with other demands on capital such as investments
and acquisitions.
We actively review the types of financing available for our business.
For instance, we’re working on expanding our supply chain financing.
Providing our suppliers the ability to get paid sooner without shrinking
our DPO. That’s an example of how we can manage working capital in a
way that drives mutual value for us and our suppliers.
“When you’re managing both ends of the spectrum in terms of cash
coming in and cash going out, centralized working capital management
improves your cash position and your working capital financing.”
Rob MacNeil,
Cooke Inc.

54
“The new treasury management system we are currently
implementing will . . . enable us to manage bank balances
more closely so that we won’t need to have as much cash in
reserve in our banks around the world. This system will free
up working capital that we can put toward new events.”
We proactively manage working capital with a 52-week cash forecast
that boils down to a 13-week rolling forecast by currency and country.
Every week, we look at our cash balances across all the different
countries and currencies and then determine if cash needs coming up
based on scheduled events and registrations. We move cash around
to make sure that we have enough money to make the payments we
need to make without triggering tax liabilities. We currently manage
all of that through spreadsheets—a cumbersome and painful process
that requires people grinding through data every day. The process is
fairly accurate and the team is good about reviewing everything, but
mistakes still arise. Some days we have false alarms or we worry that
we’re running low on cash somewhere, only to find out that there was
a mistake on a spreadsheet. Although we manage working capital
centrally, our current, manual process is inefficient and not a lot of fun.
Patrick Gramling,
The IRONMAN Group

55
The new treasury management system we are currently
implementing will automate a lot of those liquidity
management tasks, making that process much easier and
more efficient. It will also enable us to manage bank balances
more closely so that we won’t need to have as much cash in
reserve in our banks around the world. This system will free up
working capital that we can put toward new events. It will also
reduce foreign currency exchange and task liability risk as we
transfer funds between banks to provide working capital for
events. All these improvements in liquidity management will
provide value to the business.

56
Key Points
• Cash is the lifeblood of the business. For the business
to be successful, it must proactively manage its
working capital in ways that are forward-looking and
sensible for the business.
• When treasury is overseeing both incoming
and outgoing cash, centralized working capital
management improves your cash position and your
working capital financing.
• Having a treasury management system that talks
to ERP systems, banks and investment platforms
enables close management of working capital and
gives you more flexibility in using that capital to
improve overall business performance.
• Supply chain finance programs can help preserve
cash longer on the balance sheet and increase free
cash flow, which is a big benefit to companies with
seasonal businesses.

57
HOLISTIC VIEW
CHAPTER 5
Active liquidity management requires an
accurate, real-time view of data on every factor
that affects cash, risk, payments and working
capital. That level of visibility in turn requires
integrations between systems inside and outside
the organization.
To learn more about where treasury groups are in
their efforts to improve visibility into such areas
and the advantages of a holistic view, we asked
our experts the following question:
What level of integration is necessary
to get a real-time view of cash and
liquidity, and how would that real-time
information enhance decision making
and performance?
57

58
“If you can get AR and AP information straight from the
source, that’s going to help with cash flow forecasting.”
A holistic, real-time view is ideal. If you can get accounts receivable (AR) and
accounts payable (AP) information straight from the source, that’s going to help
with cash flow forecasting.
For those of us in higher education, such data would provide granularity. Our cash
roughly follows an 80-20 rule, where 20 percent of the cash flow categories are
responsible for 80 percent of the material cash flows. As long as we have a handle
on that 20 percent, we feel comfortable in the investment and borrowing decisions
we’re making. But we also need to maintain a cash buffer. We work with a $40
million or $50 million buffer on our checking account. If we are able to integrate
our enterprise resource planning (ERP) system and our capital planning system, we
would have better data and be able to reduce that buffer by $10 million, $20 million
or $30 million and put that money to better use elsewhere, such as investing it or
avoiding having to borrow it.
Modern, cloud-based ERP systems do not always talk to other systems
effectively. File systems for cloud-based applications are not easily customized,
and integrating them is often more complicated than just having an application
programming interface. The limitation is how quickly and easily you can integrate
the systems. As technology evolves and integrations become easier, the value of
integrating those systems will definitely provide added benefit.
Adam Day,
New Jersey

59
“When systems are talking to each other, you’re much
closer to having a real-time view into your cash position
and liquidity needs.”
Matthew Hansen,
It’s possible to have a solid view of liquidity without a huge amount of
integration. For example, if your treasury management system is set up
broadly throughout the organization to capture all your bank accounts
globally and you have an accurate cash forecasting model, you should
have a good real-time picture of your cash position. Where you really
gain through integration—for example, if a Kyriba system is talking to
a PeopleSoft system—is in efficiencies. You can now automate journal
entries so that you don’t have staff accountants creating journals and
introducing errors. The same advantages come from integrating market
data-providing solutions such as interest rates and currency rates used in
the general ledger to revalue assets and liabilities. Revaluation becomes
a more automatic process rather than one that requires manual entry.
Manual entry is prone to error and takes longer to complete.
When systems are talking to each other, you’re much closer to having
a real-time view into your cash position and liquidity needs. That view
improves forecasting cash needs and with that potentially comes a more
efficient use of debt facilities—perhaps lower draws on debt, which leads
to lower interest costs hitting your income statement.
CFA charterholder.

60
True real-time visibility requires a lot of integration between the
corporate and operational sides of the business. Treasury needs to
understand both perspectives and gather all that data so that it can
manage cash in a way that supports and strengthens the business.
A treasury platform that integrates with other business systems
makes it possible to quickly resolve questions that otherwise can take
a long time to answer. This efficiency can be as simple as account
discrepancies that take hours to resolve manually, time that is not being
spent working on more valuable issues, such as how better to use cash
to help the business grow. There is great value in consistent, efficient
treasury operations.
“A treasury platform that integrates with other business
systems makes it possible to quickly resolve questions that
otherwise can take a long time to answer.”
Anthony Kwong,
Real Estate

61
“The treasury management system has taken over a lot
of the nonvalue-added, labor-intensive tasks that prevent
treasury professionals from doing what they actually
should be doing, which is to become a strategic partner in
the business.”
We have found that making our treasury management system the “system of
record” and having everything go through one system has transformed the way
treasury works. For our treasury group, we consolidate everything that affects
liquidity, all our bank statements, all the forecasts, all our foreign currency
exchange (FX) contracts, and all of our debt and investment funds through the
treasury management system. We can see at any time, today or historically,
exactly what levels of liquidity or amount of FX contracts we had. We are able
to do a lot of our cash accounting from the treasury management system as
well. We use the system to do a lot of our accruals for financial instruments,
which we can automatically post into our ledger. We even do the
mark-to-market calculation in the system the same day we close the books. It’s
all automatic—with almost no manual input.
Just a couple of years ago, we got our mark-to-market information as PDF
reports from our nine different trading banks. Then, someone had to manually
organize them all into one spreadsheet. It was the same for bank account
information. We have at least 20 banking relationships around the world where
we manually managed the balances daily. A few years ago, a big part of what
we did throughout the day was pull bank statements from the banks’ websites
to show that we had liquidity there.
Kjell Aansloekken,
MTD Products Inc

62
That was a big part of what cash management was—pulling
bank statements and dumping the data into a spreadsheet
that you would then organize in a way that makes sense. We
had people doing this for hours, all the while hoping they were
actually getting everything right. That’s one reason treasury
historically tried to work with as few banks as possible. When
you’re running a global operation, however, you’re forced to deal
with multiple banks.
One of the most important criteria for us in selecting a treasury
management system was to have only one pipeline going in
or out of the company to a payment processor or reporting
aggregator. This single pipeline makes it much easier to work
with multiple banks; it makes you more bank agnostic in the
way you manage cash as well. We wanted to have one pipeline
that we knew was extremely secure, that went from our
environment to the provider’s environment. From that point, the
provider would take over parsing out payment files, reporting
files, reconciliation files and any other types of data.
Now, when we come in in the morning, everything is already
there, organized the way we want to see it. If I want to drill down
and see what happened early in the day in Italy, I can do that
with the click of a button. Recently, auditors asked for bank
statements for one of our affiliates for the full year. I was able to
download that information in less than 10 seconds.
The treasury management system has taken over a lot of the
nonvalue-added, labor-intensive tasks that prevent treasury
professionals from doing what they actually should be doing,
which is to become a strategic partner in the business and
focus on helping it grow and run more profitably. When you
are able to manage liquidity more effectively, you can improve
forecasts, which makes for better business decisions. It all
fits together.

63
It’s imperative that you have all your major systems connected and
sharing information—your treasury management system, trading
platforms and your ERP system. If you don’t have active connectivity
between these platforms, you will spend more time on manually
tracking your cash position and ensuring that you’re making the right
decisions. Instead of a report being automatically generated, individuals
will have to go to different portals and pull the information. If you have
connectivity between your trading platform and your other systems, you
will be able to execute FX transactions and create hedges, and those
actions will sync up with all the other systems.
Cash is real-time. If you’re trying to make a decision based on a cash
position that is multiple days old, by the time you’re ready to make your
decision, the data has already changed. In contrast, if data is posted in
real time, it’s easier to effect change with more relevant data. Having
essential systems connected in this way improves reporting and uses
fewer resources to generate better information. By generating better
information in a timely manner, you make better decisions to manage
working capital and liquidity. If you can’t see the data in a timely manner,
then it’s hard to use that data effectively to make risk management
decisions or to make decisions that affect working capital financing.
“If you can’t see the data in a timely manner, then
it’s hard to use that data effectively to make risk
management decisions or to make decisions that affect
working capital financing.”
Rob MacNeil,
Cooke Inc.

64
Before we connected our treasury management system to our
other platforms, it would take us anywhere from multiple days to
a week to gain visibility of our global cash. We currently get global
cash every morning.

65
“With a technology platform, many of the problems
associated with manual data collection go away. The
technology is working in the background. You know
where your cash is, . . . and now you have real-time
cash flow forecasting.”
As a corporate executive, I want to know where my cash is in real time.
Different businesses define real time in different ways. Personally, I want
to know where every dollar is in every bank account as of last night. This
becomes a complex data-gathering exercise if you’re trying to do this
work in real time, especially globally.
If you don’t have a technology product that can consolidate all your cash
data and connect to other platforms, you’ll be pulling data from bank
websites and putting them in a spreadsheet. That’s manageable if you
only have a few banking partners. If you have a lot of banks, you will
need more staff and time to do it manually. In addition to those costs,
you have issues with human error or delays if people are out of the
office. Now take that a step further: You want to look at your interest rate
hedges and all the information related to them. When you start looking
at all the different components for making hedging decisions and you’re
doing that manually, that’s when your staff numbers start to get big.
Tom Pittet,

66
With a technology platform, many of the problems associated
with manual data collection go away. The technology is working
in the background. It’s meaningful to have full functionality
either within one technology solution or through add-ons.
Recently, companies have become more open with integration.
It has become much easier to integrate your favorite treasury
management system with banking and trading platforms for
specific purposes so that information flows freely. You just need
somebody to sign in to the system, make sure there are no errors
with data coming in, and all your cash balances are right there,
ready to go. You know where your cash is and you can layer on
your FX positions and look at your debt positions. You know
in real time how many payments are in your system waiting to
go out for approval. You can build that information into your
cash flow forecasting and now you have real-time cash flow
forecasting. This forecasting is extremely valuable for managing
working capital from a cash perspective. Debt management,
interest rate management, working capital decision making and
liquidity forecasting become much better when you have
real-time information.

67
“Real-time data access and visibility are critical because of
the speed of business. The farther out we can forecast, the
smarter we can be about how we move cash around so that
we don’t have inefficient cash movements.”
We are living in an age when not having real-time visibility can create a hole
in your business. That’s different from where we were just a decade or so
ago. Real-time data access and visibility are critical now because of the
speed of business.
In our business, the need for real-time data is clearly illustrated by two
routine aspects of our operations. One is event registration: 60 percent of our
revenue comes from event registration and those registrations come to us
through a third-party provider. Currently, our systems are not integrated with
that vendor’s systems.
Right now, we track registrations from our third-party service provider
simply by looking at the number of registrations. Several factors complicate
this method. One is that we run 250 events every year worldwide, which
means that we’re tracking a lot of event registrations in a lot of currencies.
Furthermore, not all registrations for a given event are priced the same. It’s
not a matter of simply multiplying the number of registrations by a dollar
amount. To find out how we’re doing on registration revenue, we collect
registration data daily by manually going online and retrieving it from our
registration vendor.
Patrick Gramling,
The IRONMAN Group

68
Then, we send that information to finance so that they can
interpret what that means in terms of cash and revenue. From
finance, it goes to treasury so that we can make projections
about future registrations and revenue, which is itself
challenging because the velocity of registrations is
constantly changing.
When we can link our systems to the registration vendor’s
systems and have access to real-time cash flow information,
we will be much better at projecting how much cash we’re
going to have in the next 13-week rolling cash cycle. We will be
much more nimble in how we manage that cash. Integrating
those systems, which is something we are working on now,
will make our cash forecasting faster and more accurate.
The second aspect of our business that will improve with
real-time data visibility is how we manage cash movements
between banks. Although our current visibility is considerably
better now than it was in the past, lack of real-time visibility
reduces precision in our cash forecasting. With better
forecasting, we can move money between banks more
efficiently. For example, we may have a bill coming due in
Germany that will be paid in euros, and we move cash to
Germany to cover that bill. At the same time, we may be
sitting on extra cash in Canada, and we know it will be a
while before we need Canadian dollars. We would take some
money out of Canada and move it to Germany to make that
payment, making sure that we’re not creating unwanted tax
consequences. We move money between currencies often.
From a forecasting perspective, the question is why we
needed to move money to Germany. It could be that we
needed to make payments in Australia and had extra
euros, so we moved euros to Australia to make payments
there. But in doing so, it’s possible that we created a future
shortfall of euros that required us to move Canadian dollars
to Germany. With better visibility and forecasting, we could
have avoided extra transfers by picking a good time to move
Canadian dollars directly to Australia. Real-time visibility into
registrations, cash positions and billing around the world is
important to us. The farther out we can forecast, the smarter
we can be about how we move cash around so that we don’t
have inefficient cash movements.

69
Key Points
• When a treasury management system is
integrated with other business systems, many
of the problems associated with manual data
collection go away. You know where your cash
is and you are able to pull in FX positions, debt
positions, forecasting and everything you need for
better liquidity management.
• Being able to see all your data in a timely manner
makes it easier to use that data to make better
risk-mitigating decisions or other decisions that
affect working capital financing.
• A treasury management system that is integrated
with banks and other business systems takes over
many nonvalue-added, labor-intensive tasks that
prevent treasury professionals from making more
strategic business decisions.

70
Optimize Cash.
Enhance Working Capital.
Transform Payments.
Protect Against Risk.
ACTIVATE LIQUIDITY AS A
DYNAMIC VEHICLE FOR GROWTH.

Kyriba: 7 Experts on Activating Liquidity

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