For corporate treasurers, the current environment is fraught with challenges, from navigating the evolving macroeconomic climate to managing the risk of geopolitical tensions. At the same time, treasurers are seeking to secure long-term funding and optimise the capital structure of the business, while also harnessing the opportunities presented by newer technologies and supporting their companies’ sustainability goals.

These changing priorities were illustrated by the recently published EACT Treasury Survey 2024, which polled the views of around 250 group treasurers across Europe. The results of the survey, which has been running for eight years, were analysed with the support of PwC Treasury Practice.

Focus on funding

One notable finding is that long-term funding is identified as the top priority for treasurers, up from sixth place in 2023. Other leading priorities include cash flow forecasting and capital structure, followed by digitisation of treasury, working capital management optimisation, and bank relationships.

According to the report, the sharper focus on long-term funding illustrates the importance of this topic for companies with net debt when it comes to ensuring long-term viability. “This is due to the rapid and violent rise in interest rates in 2023 (not yet reflected in last year’s results), the banking crisis last Spring and the strategic repositioning of certain banks in terms of the sectors they cover,” the report notes.

David Stebbings, Director, Head of Treasury Advisory at PwC, observes a key point to note in this year’s survey is a sharpening of priority on those topics that have a financial impact on the business, either directly or as a result of process improvement – “so funding, cash forecasting, capital structure and working capital management all feature in the top six.”

Where the top two priorities are concerned, he notes long-term (re)financing – either via banks or via capital markets – and cash flow forecasting are core aspects of the job, and have always been of high importance to treasurers. “In this year’s survey, however, they are back as the top priorities as many look to refinance debt borrowed at historically low rates post-Covid, and to improve their forecasting of liquidity in an ever-changing financial environment.”

Technology and digitisation

The survey also asked treasurers about the innovations they intend to use in the next 12 months, with switching to cloud solutions, data analytics, APIs and Treasury as a Service (TaaS) emerging as top priorities. Other innovations, such as cryptocurrencies, AI and Distributed Ledger Technology (DLT) -derived technologies, are ranked lower.

As the report notes, “It looks like treasurers have many other technical priorities before considering these new technologies or being in a position to use them. They may want to first fix current systems around TMSs, enhance current IT architecture and hyper-automate processes further before using other new technologies.”

Stebbings observes that technology and digitisation still feature highly, “particularly around the switch to cloud solutions, use of data analytics and real-time reporting, and the use of APIs to connect to banks and internal systems.” However, he adds that “difficulties in standardising processes, the lack of change resources and particularly budget constraints are holding back change in this area.”

Investing excess cash

Turning to investments, the survey indicates bank term deposits of less than three months are the preferred option for treasurers seeking to place excess cash in the short-to-medium term, cited by 70% of respondents. Other popular options include money market funds and savings accounts.

“Despite the various banking crises in the past 20 years and the growing number of alternatives, bank deposits continue to be the preferred option for treasurers when investing excess cash short term,” says Stebbings. “Maximum duration is generally under three months, given the need to meet accounting requirements to classify the investment as cash and cash equivalent, although many will be shorter to meet liquidity and counterparty risk requirements.”

Supporting the ESG agenda

Finally, the report illustrates some of the ways treasurers are supporting their companies’ Environmental, Social and Governance (ESG) agenda, from revising processes and reducing business travel to issuing green bonds and investing in sustainable investment instruments.

“ESG, whilst not making the top six priorities, continues to be a focus for treasurers, whether it’s by meeting the requirements for regulatory reporting on treasury items, issuing green debt or supporting the wider business to meet and report on its ESG targets,” says Stebbings. “Only 20% of those surveyed said that they are not involved in the ESG agenda at their company.”