Best practices in treasury and finance

Treasury Practice

Best practices in treasury and finance

Published: Jan 2025

Treasury Today’s Future Treasury & Finance Leaders Forum London chapter brought together an elite group of industry trailblazers and Adam Smith Awards Alumni to showcase winning strategies for awards’ submissions, discuss harnessing the power of technology, and share top tips for career progression and team management.

Treasury Today’s Future Treasury & Finance Leaders Forum London 2024

November 2024 saw Treasury Today’s Future Treasury & Finance Leaders Forum take place in London. The event brought together a group of influential treasury and finance practitioners, many of whom are past winners of the Adam Smith Awards and Within Awards, together with partner Infor Nexus.

The forum’s aim is to create an elite network connected with the other groups across the world – including APAC and The Americas – where treasurers and finance professionals can delve into greater detail to solve the challenges that they face, both as individuals and organisations.

Sophie Jackson, CEO at Treasury Today, and co-facilitator Joy Macknight, Editorial Consultant, invited participants to share their experiences of the awards programmes, including our flagship Adam Smith Awards, which was launched in 2008 to recognise excellence and innovation in the corporate treasury space.

Winning an award gives treasury an opportunity to raise its profile and reputation internally and externally, boost morale in the team and drive employee motivation, and attract and retain talent.

Shona Blackmore, Director, Financial Operations at cruise holidays company Carnival UK, commented on the significance of winning a treasury excellence accolade. “Awards like these highlight the importance of the back office,” she said.

Fireside chat with Alejandro Guerrero, Infor Nexus

Alejandro Guerrero, Vice President Strategy and Growth Initiatives, Infor Nexus, identified three important trends in treasury and finance. First is the increased focus on environmental, social and governance (ESG) priorities and embedding ESG into reporting.

“ESG will impact everything corporate treasurers do,” he said. “To access preferential or affordable credit, for example, you will need to clearly demonstrate sustainable practices in your supply chain.”

Trade digitisation is another trend to keep watching. “There are many market initiatives around recognising electronic documents as valid legal documents, such as electronic bills of lading, which will continue to unlock opportunities for efficiencies across Trade Compliance and Finance,” said Guerrero.

The third trend is advances in supply chain financing (SCF). “Most of the SCF opportunities to date have been focused on approved payables financing, but now we’re seeing greater adoption of financing further upstream in the supply chain,” he reported.

Yet, there remains an estimated US$2.6trn lending gap for small and medium-sized enterprises. One of the main reasons, according to Guerrero, is that many financial institutions don’t have the appetite, bandwidth or wherewithal to onboard and serve the long tail of suppliers.

He advised treasurers to look at SCF through the lens of optimising opportunities through digitisation, as well as supporting suppliers through onboarding and know your customer processes, so treasury becomes an extension of their SCF programmes and can capture a wider range of suppliers.

Diversifying the number of banking relationships can also help to remove some of the barriers to an effective SCF programme. “Oftentimes with a single finance provider, there are restrictions in the programme’s coverage, whether jurisdiction or supplier size, or an increase in business continuity risk, as many experienced during the Covid-19 pandemic when banks were quick to withdraw or reduce credit lines as credit quality deteriorated,” said Guerrero.

Therefore, setting up a programme that includes multiple SCF providers will improve resiliency. “This will allow you to potentially seize a bigger portion of the spend by capturing more suppliers, as well as creating healthy competition between the financial institutions that participate in the programme,” he said.

Profile raising

Many of the attendees like Blackmore had previously been recognised in Treasury Today’s Adam Smith Awards programme, with some winning multiple honours. To highlight their success, Macknight asked several winners what taking home an Adam Smith Award or Within Award meant to them professionally and personally.

Kemi Bolarin, Head of Treasury – Europe, GXO Logistics, a US global contract logistics company, said that picking up the Woman of the Year EMEA Award in 2023 amplified her advocacy for women in treasury and thanked Treasury Today for taking the lead in profiling women treasurers for more than two decades. “It’s all about representation – winning such an award raises your visibility,” she observed.

Bolarin consciously works on developing the next generation of female treasurers by motivating young women at primary and secondary schools. “We can raise the profile of treasury, letting women know that there is someone like them in the profession and there is no barrier to entry,” she added. “This is my way of paying forward.”

Stefan Windisch, Global Head of In-House Bank, Roche

Stefan Windisch, Global Head of In-House Bank at Swiss-based pharmaceutical giant Roche, explained how the nominations process was managed internally to ensure a coherent suite of submissions. Roche is a frequent nominee with numerous wins over the last 17 years, including among others Special Recognition Award 2024 (Martin Schlageter), Overall Winner Judges Choice 2023, A Rising Star 2023 (Franca Aeby) and Highly Commended Winner Best in Class In-Country Treasury Solution 2022.

For Windisch, the awards are important to help the treasury team to remain visible internally and externally. “We use this as a channel to talk about new developments, to connect and collaborate with others, spread the word and stimulate innovation in the banking world,” he said.

Carnival UK was awarded Overall Winner Harnessing the Power of Technology in 2018 for its crew payroll initiative. Blackmore remarked on how treasury technology and the treasury function has evolved over the past six years.

“Much has happened in treasury since 2018, including the Covid-19 pandemic, and we are still dealing with the Covid hangover,” she said. “In a large corporate like Carnival, decision-making can be slow and it has gotten even slower since the pandemic, so adopting new technologies is a real challenge for treasury.” Her experience resonated with many of the treasury and finance professionals in the room.

“Fundamentally, it is a company-wide IT project. We had to push to be included and to explain what we do in treasury, or we would have ended up with a system that didn’t fit our needs.”

Julia Donegan, Global Treasury Director, Newell Brands

She said that today the treasury team is focused on exploring business intelligence tools, such as Microsoft Power BI, and data analytics, as well as reviewing and retiring incumbent systems. “Then we can start thinking about modernising our technology stack and, hopefully, move more swiftly in adopting new technologies in future,” she said.

Pepco Group, a European variety discount retailer, won Overall Winner Best Supply Chain Solution in 2022. It is a large organisation, with 5,000 discount retail stores across Europe, and purchases around €2bn in stock from Asia per year on 30-day payment terms, which takes about 120 days to sell. Growing at 10-20% per year meant significant net working capital outflow.

When Alan Chitty, Group Treasurer – Tax, Procurement and Sustainability, joined Pepco four years ago, creating a supply chain finance (SCF) programme was top of his agenda. “It was a cross-functional initiative, involving purchasing, finance, IT and project management teams,” he said.

The BB/BB- rated company quickly saw working capital improvements. It has €500m utilisation of its SCF programme, which saves it €12m in interest each year, reported Chitty.

“The benefits from the SCF programme gave us the impetus to implement a treasury management system (TMS), as well as improve cash pooling and foreign exchanged transaction management,” he said.

Today, 700 factories in Bangladesh, China and India are part of its SCF programme. Next steps is looking further into the supply chain. “We are exploring how to start financing before suppliers invoice us, which would position us as the main buyer, as well as provide them with funding to make sustainability improvements to their factories, for example,” he explained.

In addition, the Pepco treasury is also looking at dynamic discounting, where a business customer can receive a variable discount on an invoice if they pay it early.

Getting the most out of tech

After a networking break, Macknight hosted a panel discussion on harnessing the power of technology, a perennial topic for treasury and finance professionals worldwide. As in other industries, the tech environment in treasury and finance has undergone vast changes in recent years to increase automation and reduce errors.

Séverine Le Blévennec, Global Head of Treasury at Aliaxis, a global pipes and fittings company, which picked up the Best in Class Treasury Solution in Latin America 2024, pointed to the rise of application programming interfaces (APIs) to deliver instant data flows. Another trend she highlighted is the emerging partnerships between TMS and fintechs. On one hand if a fintech is purchased by your TMS provider, it creates obvious synergies. But on the other hand, such consolidation can also take place with another TMS provider and the fintech support model could be affected. So, it is important to understand the strategic roadmap of fintechs you want to implement and how this could fit with you company treasury technology ecosystem.

She added that robotic process automation (RPA) is ever easier to implement and is surprisingly not as widespread as she would expect given the high ratio benefits versus cost, effort and risk. With regards to generative artificial intelligence (GenAI) its value is still to be unlocked further than the basic applications. “While there are many hurdles to seeing the real value, we are looking to GenAI to increase our productivity,” she said. “Overall, technology is much more accessible to treasury than ever before.”

Marc Andre Mohn, Director, Corporate Treasury, adidas

Marc Andre Mohn, Director, Corporate Treasury at German sportswear manufacturer adidas, which was a Highly Commended Winner of Best in Class Treasury Solution in the Middle East 2024, pointed to the fact that banks were also working with fintechs to offer better service to their corporate clients and create a win-win situation through these partnerships.

adidas, like many other corporates, is currently implementing SAP S/4HANA, as all enterprises using SAP ERP must migrate by 2027. “It is quite a journey, but we hope that this will make it easier to apply certain technology connectors,” said Mohn.

Newell Brands, a US manufacturer of consumer and commercial products which was Overall Winner of Best Transaction Management Solution 2024, is also implementing S/4HANA, which is a “difficult and long process”, according to Julia Donegan, Global Treasury Director.

“Fundamentally, it is a company-wide IT project. We had to push to be included and to explain what we do in treasury, or we would have ended up with a system that didn’t fit our needs,” she said. “We developed expertise within our team to ensure that we understand the ins and outs.”

In her opinion, most treasury teams are struggling to keep up with the pace of technology change. “We know what we want to do and many banks are developing great tools, but we’re not able to move fast enough to implement them,” she said.

From conversations both on and off stage, it is evident that many are still heavily reliant on Excel spreadsheets for their day-to-day activities.

Most treasury and finance teams don’t have dedicated technology resources at their disposal, so establishing good relationships with the IT team and communicating well ahead the IT resource requirements can help get more out of tech. Further Le Blévennec believes that empathy goes a long way towards selecting and prioritising technology projects that will unlock the most value for its team and the organisation as a whole.

“It’s absolutely important that as you develop things, you have empathy and reach out to all the people involved in or knowledgeable about the process you are revampint as they will help you design a much stronger solution,” she said. She recommended using instead a technology that is best fit long-term, not necessarily a buzzword, with an eye on future scalability.

Roche’s Windisch agreed that communication is key. “Many new IT people with a different skill set are supporting our move away from spreadsheets to dashboards and analytics solutions,” he said.

“In a large corporate like Carnival, decision-making can be slow and it has gotten even slower since the pandemic, so adopting new technologies is a real challenge for treasury.”

Shona Blackmore, Director, Financial Operations, Carnival UK

Roche was able to shift an IT person from the analytics team into its treasury team. “They help by translating our needs into what an analytic engineer understands,” he explained.

When thinking about how GenAI is going to impact treasury and finance, Le Blévennec believes that it can help treasury to increase productivity, integrate unstructured data, and improve data analytics and cash flow forecasting. However, she remains cautious regarding data auditability.

“There are many potential use cases for GenAI, but we must keep in mind the mantra that in treasury we leverage the big amounts,” she said. “We need to find a solution to implement GenAI in a way that we are not subject to more risk by wanting to go one step too far.”

According to Windisch, Roche is exploring large language model (LLMs) algorithms to possibly help its mailbox respond quicker to repetitive questions. “We have a centralised mailbox representing the in-house bank internally, which colleagues have to spend time responding to questions. Using LLMs, we can free up resources and make the response more sophisticated with additional information,” he explained.

adidas’s Mohn believes that GenAI could help to overcome the complexities of collecting information for forecasting purposes. “Forecasts are incorrect mainly because of gaps in the information flow,” he said. “I think that AI could help us to improve predictions.”

The final part of the panel discussion looked at how to future-proof treasury and finance. Le Blévennec advised creating a vision of the desired end state which then allows to plant the seeds of change in advance whenever there is an opportunity, even years in advance.

“For example, I know that one day I wanted to include the legal entity identifier in our payments, so I pushed that via several channels. As our accounting team kick started the implementation of S/4HANA, I ensured the LEI field was included in the master data specifications so we are prepared to include it in our payments once banks are ready. And of course we include that requirement in all our banks RFPs. In the meantime, it started to gain traction with regulatory bodies and also with some banks! Similarly, we are ready for ISO 20022 in most of our countries,” she said.

“Knowing what your next step is means that you’re not always just reacting to market changes or emerging technologies.”

Personal and professional

Sophie Jackson hosted the workshop part of the forum on sharing experiences of managing and leading, as well as evolving technical skill sets and expertise, navigating conversations and relationships, career progression and good corporate citizenship.

There was consensus that good communication is critical when it comes to team management, especially being transparent, honest and clear around expectations. Celebrating achievements is also seen as very important, as is empowering team members to project manage their career.

Le Blévennec remarked on the importance of continuing to learn and also teach, whether that is teaching your boss, colleague or subordinates. “My approach is more like a network of people than a pyramid,” she said. “By the time they leave my team, they have learned a lot and built their CV. Of course, I take the risk that they are more marketable every month, but they are happy to learn and usually want to stay.”

While many in finance and treasury are introvert by nature, another participant observed that, as a leader, it is important to become comfortable communicating to wider audiences. This will also help in navigating relationships with business units outside of treasury and finance, which can be tricky but incredibly important in raising treasury to a strategic level within an organisation.

Building a treasury from scratch can be useful in helping the business to understand how the team can help them, rather than just being a function that issues edicts about what they are allowed to do, according to another attendee. “Throughout the year, we’ve been presenting what we do to various functions that we don’t typically speak to on a daily basis – this has gone down very well so far,” one attendee commented. “Aligning treasury and finance key performance indicators with those of other teams is critical to take the whole organisation forward.”

Thinking about transferrable skills and stepping stones to career progression, Treasury Today has launched a new podcast series called ‘Ask A CFO’ looking at the unique career paths and personal journeys of past and present CFOs across the world. Attendees discussed different opportunities in their careers which allowed them to gain new skills.

The discussion centred on the skills and roles within treasury and finance, emphasising the analytical nature of treasury and its strategic value. Le Blévennec highlighted the importance of diverse experiences, such as lobbying for regulation change, participating in legal negotiations and transfer pricing discussions, to widen their knowledge.

The conversation also touched on the benefits of moving sideways within the organisation to gain new perspectives and skills. Additionally, the importance of building and maintaining professional networks was stressed, as well as the value of corporate citizenship and equity in senior finance leadership.

The forum concluded with a call to action for participants to consider what it means to be a good corporate citizen and how they can contribute to a progressive agenda.

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