Gone are the days when treasury was regarded as an ivory tower, somewhat detached from the rest of the organisation. More than ever, today’s treasury professionals need to build strong working relationships with a host of other departments across the organisation, from procurement and IT to legal and HR. This may involve overcoming historical siloes, addressing competing goals and addressing knowledge gaps – all of which may require a proactive effort. In a recent Corporate View profile in Treasury Today Asia, Yvonne Teo, APAC Treasury Director at chemical distribution company Brenntag, explains how in a previous role she “single-handedly organised treasury workshops and training sessions for non-finance folks” in order to boost awareness of topics such as working capital and liquidity management.

As well as helping to improve the performance of the treasury as a whole, effective relationships can play an important role in individual career development. In The Business of Treasury 2024 report, published by the Association of Corporate Treasurers, 28% of respondents cited communication and relationship-building skills as a barrier to career progression for treasurers. So how should treasurers approach the task of building closer links with other departments, and what should effective relationships look like? Three treasury professionals share their views.

Treasury and procurement: finessing supplier payments

In many companies, procurement and treasury operate on a somewhat siloed basis. But for Greek aquaculture company AVRAMAR, the two teams have historically been adjacent. And when Marianna Polykrati joined the company as Group Treasurer in 2023, one of her most pressing tasks was to work with procurement to redesign the supplier payments process.

“AVRAMAR works with a large number of fish farms around Greece, and a lot of these processes were decentralised,” she explains. “When I joined two years ago, we identified opportunities to enhance the efficiency and transparency of our payment processes. There were occasional timing and communication challenges that influenced supplier engagement, so we collaborated closely with accounts payable and procurement to map out policies and procedures, gaining a full understanding of the end-to-end workflow.”

By working together, the treasury and procurement teams were able to redesign the entire payments process, from the issuance of purchase orders, approvals flow and invoice handling. This, in turn, has enabled treasury to optimise liquidity across the organisation.

“Part of the initiative was to restore trust and consistency with our suppliers by re-establishing clear credit terms and ensuring timely payments,” says Polykrati. “This supported stronger supplier relationships and helped reduce ad-hoc requests, creating a more predictable and collaborative environment. We’re also working on a supply chain finance programme to further support our supplier base, particularly smaller partners, an initiative treasury is leading in close collaboration with procurement.”

She explains that while procurement and treasury have a good understanding of each other’s goals, treasury tends to take the lead when it comes to driving technological advancement. “When I go out and see treasury solutions, there are a lot of platforms such as supply chain finance or trade finance tools, which we can then introduce to procurement. So, treasury acts as something of a connector there as well.”

Building connections

As well as working closely with procurement, Polykrati says a sizeable portion of her time is spent liaising with the company’s legal team on topics such as KYC procedures and loan agreements. “I also collaborate frequently with accounting, especially accounts payable, as well as with finance and HR on initiatives such as optimising payroll and further automating the personnel and travel expenses processes. And let’s not forget sustainability and ESG. Treasury works as a focal point for the banks and collects data from different departments that is needed to complete ESG reporting for the banks.”

Likewise, the cash flow forecasting process is another activity that requires treasury to collaborate closely with other departments. As Polykrati explains, “You have to improve all your relationships in order to have all the data that comes into the forecast – it’s important to be proactive and understand the pain points.

“We’re aiming to support all departments and identify opportunities for further automation. At the end of the day, it’s about making the best use of people’s time, by minimising manual, repetitive tasks, teams can spend more time on more meaningful and value-added projects.”

Treasury and legal: winning as a team

At Wolters Kluwer, a global leader in professional information, software solutions and services, treasury and legal have a long history of working together effectively – not least because of the positive relationship built by George Dessing, Executive Vice President, Treasury & Risk, and Joost Spiertz, Director Corporate Legal Affairs, who have been working together successfully for about ten years.

While a treasurer and a lawyer may have different perspectives, Dessing and Spiertz explain that it is possible to bring those perspectives together in pursuit of a common goal, in order to deliver a deep impact when it matters most. Key to achieving this is investing in the relationship and keeping both parties updated on developments in the business, as well as the market in which the company operates.

What’s needed for treasury and legal to work together in a positive way?

GD and JS: In order for us to work smoothly, a high level of trust and respect is required, whereby we stimulate an open, engaged and proactive mindset. This can be achieved through transparency, reliability and recognising each other’s contributions.

A good dose of fun and passion is also greatly appreciated, as we need a best-in-class mentality to deliver the value-add, and to ‘aim high and deliver’. The running gag between our teams is as follows: if a CFO asks the treasurer what the solution to ‘one plus one’ is, the treasurer would answer, ‘What would you like to see?’ If a CFO asks the same question to a lawyer, they will say, ‘Let me quickly check this with my external legal counsel.’

How important is teamwork as part of this relationship?

GD and JS: Having strong company values and cultivating them is important. One of our core values at Wolters Kluwer is teamwork, under which we aim to win as a team.

Although we have a lean-and-mean mentality, and have to be mindful of each other’s time, teamwork is all about people. Therefore we dedicate time on a regular basis to come together as teams to discuss the external and internal capital structure of our operating entities. If this is done effectively and efficiently, we strongly believe this will save you time down the line and will engage our teams more closely together.

How do you bridge the knowledge gap between treasury and legal?

GD and JS: Another core value at Wolters Kluwer is that we strive to make things better. Under this shared value we have mutually educated each other on our respective professions. The treasurers can read contracts, and the lawyers have a good sense of the underlying business impact of the financial projects. This helps make collaboration far smoother, and the extra perspective results in an overall better result.

Treasury and FX dealing: strength in numbers

The Thomas Cook India group has a set-up that is both novel and complex. The group’s flagship company, Thomas Cook India Ltd, is listed on the Indian stock exchange and is the country’s largest non-bank foreign exchange (FX) player, as well as being one of its oldest. It functions like a bank, and is also the country’s largest integrated travel company, working alongside its subsidiaries across 28 countries as a conglomerate.

With the company effectively acting as both a bank and a corporate, internal functions such as treasury are able to experience the best of both worlds. The group treasury team handles end-to-end treasury for the companies in India, as well as for the Mauritian holding company called TCIM, which is a holding company to several overseas entities of the group. The team also acts as a treasury support function for entities across the remaining 27 countries.

Meanwhile, the FX dealing room is akin to the forex dealing room of a bank. As such, it undertakes activities such as forex cover (hedging), currency swaps (funds management) and remittances, as well as a variety of FX business activities. “People mistakenly think of the treasury and the dealing room as a team, whereas we are more like a family – a closely knit unit which works together shoulder to shoulder, and has fun together,” explains Vice President & Head – Treasury Amit Baraskar. “There are times where we forget that we belong to two distinct teams, with different lines of reporting.” That said, he emphasises that the dealing room remains fully independent from a control and compliance point of view.

According to Baraskar, this union of teams has achieved much through its synergies, leading the company and individual team members to gain multiple awards and achieve industry recognition across Asia. Some of the most significant results of this collaboration include the following:

• Improved financial efficiency through co-ordinated cash management. Different members of both teams are responsible for handling different ‘kitties’ in multiple currencies, with bank accounts spread across more than 12 geographies.

• Reduced cost of borrowing through strategic funding initiatives. By using currency swaps effectively, the two teams have been able to open new doors and give the company access to funding and investing options which might not be available to a more traditional treasury. If large and sudden funding requirements arise in one unit, they can be met by the other.

• Risk management and hedging. Enhanced risk management leads to better financial stability, while the company’s profit margins are protected from adverse currency movements. Where hedging is concerned, the treasury team is able to consult the dealing room and tap into the team’s expertise when undertaking hedging activities.

• Optimised investments. By tapping into arbitrage opportunities across different geographies, the treasury is able to devise optimum investment strategies for making better returns.

• Navigating Covid-19. During the challenging Covid-19 period, both teams ensured prudent financial management and the availability of funds at optimum rates.

Members of both teams are temporarily aligned whenever the need arises. Likewise, any staff shortages that might arise in the dealing room can be met by treasury team members, and vice versa. As Baraskar observes, “This collaboration sets a beautiful example of 1+1 being 11, and not just 2.”

This year, the team is working to align the mid offices of both the treasury and the FX dealing room into an integrated middle office which can work in a coordinated and synchronised way, ensuring that learnings and best practices are learnt together and harnessed effectively.