The COVID-19 crisis has brought new opportunities for treasurers to position themselves as strategic business partners – but there are still challenges to overcome.

As the role of the treasurer has evolved in recent years, one of the most important changes has been the greater focus on partnering with the business and playing a more strategic role. And plenty of progress has been made in this regard. A report published this year by the Association of Corporate Treasurers (ACT), The Business of Treasury 2020, found that in 85% of the organisations surveyed, treasury is recognised as a strategic business partner.

Of course, what this means in practice can vary considerably between organisations. For one thing, business partnering is about building relationships across the organisation. In an article published by Treasury Today earlier this year, Alex Young, head of Corporate Sales for GTS EMEA at Bank of America, explained that “treasuries are like a hub with many spokes reaching out to various functions and units across the business.” He added that treasurers have expanded their engagement with areas including accounts payable, accounts receivable, procurement, inventory management and sales, as well as interacting with departments like audit, HR and legal.

More recently, the COVID-19 crisis has presented additional opportunities for treasury to take on a more strategic role within the organisation – for example, by supporting boards with greater visibility over risk and liquidity, or by facilitating the rapid transition to new business models. And according to the 2020 AFP Strategic Role of Treasury survey, 83% of treasury professionals “believe there is a greater or significantly greater value assigned to treasury” during the crisis.

Adding value

Moving forward, corporate treasuries expect to be involved even more closely in the strategic decision-making process. Nordea’s Treasury 2025 survey, published last month, found that 76% of respondents expect the treasury to be moderately or highly involved as a strategic partner for management by 2025.

This is a goal that many treasury teams are actively working towards. “We want to be business partners, with value added offerings, so that we can really drive the business and help it move forward,” says Christopher Emslie, Asian Regional Treasurer at General Mills. “This means helping people make better decisions that can save money, drive the business and make things easier and simpler.”

Obstacles to overcome

For some treasury teams, however, there may be some significant obstacles to overcome when looking to take on a more strategic role. For example, the Nordea survey found that less than a third of treasury respondents believe business leaders see them as a strategic partner in the area of digital business transformation.

“The positive forecast by members of the treasury is not reflected by those working in the wider business,” commented Johan Trocmé, Nordea Corporates, Institutions & Investment Banking, in a press release. “A common complaint about the treasury is that as a department it is too detached from the rest of the business. If the treasuries want to become more involved in more strategic decision making, as they expect to, they have a lot of people to win over.”

In light of these challenges, the Treasury 2025 report recommends five steps that treasury teams can take in order to achieve their business partnering goals:

• Build bridges and change perceptions.

• Demonstrate relevance.

• Become an innovation role model.

• Build the skills needed for innovation.

• Leverage new business models.

To conclude, the COVID-19 crisis has brought more opportunities than ever for treasurers to take on the role of strategic business partner. But in order to maintain this position in the years ahead, treasurers should be aware of the obstacles they may need to address along the way, as well as the steps that may enable them to build on the current momentum.