Photo of Tom Surendran, J.P. Morgan and Steven Stewart, Terex.
Steven Stewart
Director Treasury & Accounting
UK
Terex Corporation is an American company and worldwide manufacturer of lifting and material-handling equipment. Terex does business in the Americas, Europe, Australia and Asia Pacific.
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The challenge
For decades, Terex has worked with and inherited many banking partners, leading to a disjointed treasury structure consisting of a patchwork quilt of solutions. Terex, which used prior-day reporting, faced limited visibility and significant challenges in global cash forecasting. Due to the fragmented account structure, cash resided in pockets around the world, with excess cash held by subsidiaries instead of being optimised at the group level.
Terex also relied entirely on manual processes for cash extraction, tracking and movement. The company’s complex structure required the treasury team to physically move cash between entities using extra accounts created solely for intercompany flows. This unnecessary complexity was particularly challenging when moving cash to the US to fulfil high-priority company objectives or repay third-party debt. When the company was short on a particular currency, it would have to perform emergency FX trades. Overall, Terex’s treasury team was strained by the process of ensuring cash was available when and where it was needed.
The solution
When Terex launched its cash management transformation project to streamline processes and improve efficiency, the treasury team took the opportunity to establish a new notional pooling solution. As part of the transformation project, Terex rationalised its banking partners from 20 to nine, then used its treasury technology and banking tools to achieve real-time visibility of cash movement and concentrate cash in a single global liquidity overlay structure. This mobilised an extra 35% of idle cash and helped achieve a 20% reduction in external borrowings.
Terex consolidated cash into a single-entity multicurrency notional pool and automated the solution by connecting the notional pool to regional bank accounts via two-way multibank sweeps, which immediately relieves the treasury team of the burden of making manual transfers. With this solution, Terex can notionally convert currency from the pool for any payments, which eliminates the extra work and cost of making tactical, ad-hoc FX conversions. This allowed Terex to achieve about 40 hours a week savings in terms of time of their global treasury team.
With help from its bank, J.P. Morgan, Terex implemented the notional pooling solution in only seven months, completing the project at the end of 2024.
TEREX Notional Pooling Solution
Best practice and innovation
The approach adopted allows Terex to achieve several objectives:
Gain visibility of their global liquidity position with minimal disruption to existing cash management.
Repatriate cash to the US headquarters efficiently.
Repay third-party debt.
Enhance forecasting based on same-day reporting.
Reduce manual tasks related to cash transfers and ad hoc FX transactions. The latter saves approximately 40 hours per week for the treasury team, allowing them to focus on strategic tasks.
These strategic changes in treasury management significantly optimise Terex’s cash management processes and operational efficiency and were positively received by the C-suite to create a solid foundation to weather any unfavourable changes in the external environment.
Key benefits
Cost savings.
Number of banking partners/bank accounts reduced.
Process efficiencies.
Increased automation.
Risk mitigated.
Improved visibility.
Errors reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
Exceptional implementation (budget/time).
“The difference between the treasury today and before the solution rolled out is night and day. We are seeing very real benefits, and we continue to see them as we go forward. This notional pooling solution has paved the way for Terex’s growth. As we move forward, we can keep growing in a managed way. We don’t have the disjointed approach that we had before,” says Steven Stewart, Director Treasury & Accounting.
Nina Poyet
Executive Director, Global Corporate Banking, J.P. Morgan
Terex notional pooling solution became a true culmination of their treasury transformation journey. Company management achieved impressive results of rationalising banking partners, introduced a new TMS system and made the full use of banking tools to achieve real time visibility of cash movements and concentrate cash in a single global liquidity overlay structure.
The entire J.P. Morgan team congratulates Terex on this award as a high profile recognition of your efforts!
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The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2025 awards attracted 454 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
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