Uplifting Treasury’s Mandate to Strategic Partner of the CFO’s Office

Learn how elevating Treasurers to the position of strategic business partners can help CFOs ensure they are making the most of an under-used function, with Treasurers providing the maximum potential value.
Greg Carlson

Greg Carlson

Managing Director, Riveron
Download Slides

Session Summary:

Takeaway 1
Learn the top priorities for the organizations for a forward-looking treasury

Key Points

  • 83% of treasury leaders believe there is a significantly greater value assigned to treasury during the COVID-19 crisis
  • Effectively using treasury-specific technology to achieve the objectives.
  • Focus on digital acumen, communication, and strategic thinking to better collaborate with key stakeholders.
  • Understanding operational drivers and collaboration with operational leadership is critical to next-gen treasury functions
Takeaway 2
Learn the treasury KPIs that help the treasury department to add more value to the CFO’s office

Key Points

  • Unlock the cash through Integrated Working Capital Management.
  • Optimize the returns through Capital Discipline & Allocation.
  • Manage all the risks through Enterprise Risk Management.
  • Improve business insights through Advanced Analytics & Decision Support Systems.
Takeaway 3
Learn how AI and automation could help Treasury professionals become strategic advisors of the CFO

Key Points

  • Leverage data analytics and data visualization tools to streamline Cash/Debt Management, Financial Reporting & Exposure Management.
  • Save valuable time through enabling process automation and AI/ML tools in Payment & Credit/Collections.
  • Leverage analytics and the industry’s top visualization tools to manage working capital better.
Show More

Greg Carlson: 0:00
Hello, folks, I hope you are all enjoying the conference. I wish I could be with you in person. But unfortunately, I had a positive COVID test over the weekend, and unfortunately could not travel to be with you today. But I think as we’ve all learned over the past few years, we have to remain flexible. And, most importantly, the show must go on. So thanks to the HighRadius team for your flexibility and allowing me to record this session. Despite the fact that I’m not there. I hope that this is informative, and that you learn a lot and that it informs and continues to make your conference experience a positive one. By way of introduction, my name is Greg Carlson, I am a managing director with Riveron, I lead our finance transformation practice, which focuses on partnering across the office of the CFO to bring not only strategic but also tactical solutions to improve how finance and accounting operates. And this is pretty wide-ranging, it can include organizational change, it can include process change, and certainly, technology is a big piece of it. I know you’re getting a good dose of technology at the conference. But I think it’s important to note that in most cases, it’s not just or processor technology. In most cases, it’s all three working together in an integrated way to help finance and accounting functions operate more efficiently and more effectively. Before I jump into the content, just a few quick words on Riveron and who we are and how we work with our clients. Riveron is a cross-line service advisory firm. We have approximately 650 advisory professionals, we work and operate in almost every major market in the US and have a global reach a large portion of our clients are global have global operations, and we work around the globe with them. Our specialty and heritage is really serving the office of the CFO. And we do that across a variety of service offerings, including transaction services, helping companies buy, sell and integrate accounting and tax advisory. So a wide range of technical accounting, technical tax matters, and advising our clients on those matters. Performance Improvement, so pretty traditional management consulting offerings across all your core functions, technology. So we have technology capabilities to select, implement, and integrate technologies. And then lastly, turnaround and restructuring. So helping distressed companies work out and get on the path to healthier operations. The topic for moving on the topic for today is how treasury can uplift its mandate to a more strategic business partner. And that’s not only a strategic business partner, to the CFO, and other finance colleagues, but also strategic business partner to operations stakeholders, and how treasury can play a key role in driving enterprise value.

Greg Carlson: 04:37
And I’m probably gonna have about 20 minutes to prepare content and my thoughts are to cover really four main topics. First, the demands on the treasury function. Those are evolving, and they are multi-dimensional. And honestly, in my career, I haven’t seen it treasury have to work around and face and support so many different types of challenges. And recognizing those demands and challenges and the role that treasury plays certainly can help you be more prepared. All I’ll highlight several priorities and differentiators that I see strategic treasuries undertaking, there’s certainly a difference between a strategic treasury and a transactional treasury. And I’ll highlight those things that I think strategic treasury organizations are doing differently. And talk about how we are advising our CFOs and treasurers along the way, as they look to uplift their mandate. Depending on time, I do have a few examples that I can get into to share how specifically we are assisting treasuries, and how we see treasuries, uplift and evolve to a more treasury, strategic organization. And then last one. Lastly, I’ll leave you with a couple of takeaways, some pillars that you can think about as you go back to your organization and think about your priorities for the year. So let’s go ahead and step into the content. And as I mentioned, there’s a wide array of challenges that the treasury organization is facing today. It’s a complicated playing field. And many of the challenges that you see on the slide here, require treasury involvement and partnership. Historically, treasury hasn’t always had a seat at the table when it comes to these sorts of things. But more and more with COVID being a catalyst, treasuries are having a seat at the table to help companies solve these problems. You know, certainly, if you think about challenging market conditions, rising interest rate, lender pressure, treasury is right there and traditionally has been if you think about deal activity. In supporting that, and integrating transactions, treasury is playing a larger and larger role. Some of the emerging supply disruptions that we’ve been faced with that is, you know, certainly something where a strategic treasury can step in and help navigate. The point being, that there are a wide array of challenges that are multi-dimensional, they are changing. And as a result, companies really need treasury to be at the table, to bring their expertise to help navigate and solve for these challenges. So I suspect that a lot of these are probably familiar to you. And it is something that we see and help our companies navigate on a day-to-day basis. So what are if we think about the challenges, what are the things that we see treasury’s doing to help companies and their business partners navigate those challenges? I think the first thing I’ll point to is treasury has always had to have an eye for value creation. Yes, traditionally, treasury as has been largely a support function, a back-office function, if you will. But there are several ways for the treasury to create real economic value beyond traditional treasury operations activities, all hit on a few very specific examples on the next page. But these opportunities in these examples, the common theme is really around the balance sheet.

Greg Carlson: 09:35
As far as I’m concerned, treasury plays a key role in owning the balance sheet and plays a key role in being a steward of the balance sheet. The trend of treasury as a business partner is nothing new. But the trend around treasury as a value creator, it is new and has accelerated as a result of COVID. And you see the stats on the page there, I think that’s pretty interesting. It’s from a recent AFP survey where greater than 80% of treasury leaders believe that there’s been a greater value assigned to their role since the emergence of COVID. So, you know, even over the last couple of years, the role of treasury has shifted quite drastically. Next, I guess we can’t be at a technology conference without talking about digital adoption, based on Riveron’s experience, and other third-party studies, a majority of treasuries are well, we think behind the curve, in adopting key technologies, to enable in some cases, even the most basic and foundational treasury processes. It used to be if you had a treasury management system, you were cutting edge. Now, it’s certainly more, it’s about more than just your treasury management system. There’s a whole universe of enabling technologies out there like artificial intelligence, blockchain, data management tools, data visualization, visualization tools, and a whole host of process automate automation technologies. And this digital adoption priority is certainly something that is being prioritized, it takes an investment. And it’s not something that happens overnight. But it’s become more and more of a priority as we move forward. The next priority that I’ll highlight is really about your people. And the capabilities that are needed for treasury to play a key role in helping their stakeholders deal with those challenges that we spoke about on the previous page. Labor shortages continue to be a challenge for all companies are investing in their current resources to support upskilling to support their team developing new capabilities, like digital acumen, analytical skills, more advanced project management skills to be that value business partner. And you know, an added bonus of this investment in the team is it’s a, it’s a retention tool. We’ve seen companies that invest back in their workforce in a meaningful way, it certainly supports and aids in retention and retention. And then lastly, there continues to be the continued priority around business partnership. This concept certainly is not new. So I will spend a ton of time talking about it. But I think the trick here is about how that business partnership can lead to value creation back to the priority on the far left. And so as it moving on, as it relates to value creation, I want to highlight a few very specific ways, I see treasuries partnering to provide differentiated services. Certainly, there are many ways treasuries can create value through more traditional operations activities, like what you see there in the light blue. And I don’t want to minimize the importance of this, they remain super important and essential to day-to-day operations. But if we think about today’s environment, these more traditional operations activities can be viewed as largely table stakes and they need to be viewed they need to be executed as efficiently and as effectively as possible.

Greg Carlson: 14:36
On the differentiating activities and in the orange. These are things that we’re working with clients and recommending to clients. They invest in these capabilities to create differentiating capabilities that drive that extra level of enterprise value. And there’s several of these, I’m calling out three here that I think, have a lot of momentum, and I think are rising to the top as it relates to differentiators. And the first is around working capital management. The point I’d like to get across here is, there are many stakeholders, and who influence working capital. But often, there’s no one who truly manages it holistically. Treasury often has to deal with the consequences of poor working capital management, but on their own can’t really do much to optimize working capital. And I find that the treasury’s who play a more active role in integrated working capital management, defined as helping structure and rollout holistic working capital processes, bringing together the key stakeholders who execute those processes, and providing a level of governance and oversight over those working capital processes. Those who those treasuries who do that tend to have a much better cash conversion cycle relative to their peers. And end of the day, it unlocks cash, and it’s important. So it’s more about how treasuries approach this and the role they play in helping drive it which, which I think is a change from a traditional, a traditional way of working. The next thing I’ll highlight is around capital discipline and an allocation. So how is that different than traditional cash management and traditional Cash forecasting. So certainly, treasury plays a key role in managing and forecasting cash and keeps an eye on the balance sheet metrics. However, treasuries is usually not involved in more capital budgeting decisions, and having a seat at the table, around how capital gets allocated across the company. And I think this is a another opportunity for the treasury to really come to the table alongside FPNA and operations to support decision making around major capital spend, as I mentioned earlier, about treasury being a key steward of the balance sheet, playing this role and being actively involved, as it relates to capital discipline, capital allocation, can really help assist with optimizing returns. Lastly, there’s there’s enterprise risk management. The concept of this certainly is not new. But in a non financial services environment where a company may not have a chief risk officer, that role needs to fall to the to the treasurer, and the broader treasury organization. And in that situation, the mandate needs to be broader than just managing financial risks. Managing corporate insurance, there’s a handful of other enterprise risks that companies face day in and day out that with a treasury playing a key role there in defining, implementing and rolling out an enterprise risk management program. It’s proven to be a real differentiator. So that’s another area that I wanted to highlight. And together, these table stakes and differentiating areas of focus can help treasury’s uplift that mandate from being more transactional to being more strategic.

Greg Carlson: 19:15
So lets at the bottom, you see the advanced analytics and decision support. So let’s pivot the conversation here back to technology and further highlight how large of an opportunity technology continues to be, in our opinion, it’s the link that brings everything together and plays the central role for everything above that bottom line there to that bottom row there to run efficiently and effectively. So based on some, additional external perspective here based on Riveron’s project experience and some additional third-party research, treasuries are still quite behind as a relates to the adoption of technology. In fact, what I find surprising is that most of the table stakes activities, just you’re pretty traditional treasury operations activities. In a lot of cases, those activities are still not appropriately enabled by a technology, that now obviously, depending on the type of company, the size of the company, that varies quite widely, but holistically, that still remains a significant opportunity for companies out there. And you can see, you can see what the matrix we identified a number of treasury activities and the sort of technologies out there that are available to support everything from technologies that are pretty traditional in terms of your treasury management systems and your reporting tools to some of the things that some of the technologies that we think are more emerging, like machine learning, and artificial intelligence and blockchain. So the takeaway here is pretty clear. And that is that there remains a significant opportunity to continue to focus on increasing technology adoption, across the treasury Department. So I was hoping to use this slide as an opportunity to drive some more dialogue. But I’ll still pose the question. And maybe the HighRadius representative there can help facilitate some discussion after I sign off. But you know, where are you in your adoption of enabling technologies? Are you know, where you want to be? Are you at the point where you have a roadmap, but you’re behind? Or have you not started? And you don’t have a plan? I suspect, since you’re there at a technology conference, I suspect that maybe I’m speaking to folks that are maybe a little bit more overachieving and fall within ARB. But I think it’d be interesting for that dialogue to emerge amongst one another. And as you as he talks about it, maybe sharing some stories around what’s worked well, and what challenges you faced, would be beneficial for one another. So let’s, let’s go ahead and bring it home here just for the sake of time. Like I said, I have a couple of examples here, you’ll see this, I think you’ll have access to this content. So you can read this when you receive it. But as it relates to some major takeaways here, based on what we talked about, I think I’d like to focus on really three major takeaways. The first is operational excellence. So doing the basics really, really well. The those table stakes activities foundational, using enabling technology, do those really, really well. And embed metrics and a continuous improvement attitude to be able to continue to monitor improve how you work. The second key takeaway is around cache optimization. So the ability to obtain real-time visibility and make accurate data, make accurate decisions around your, your cash position. And that also includes the integrated working capital management. So playing treasury playing a key role in working capital management. And then lastly, it is about the technology. It’s about deploying the tech stack that supports operational excellence and allows the team to free time and free up time and focus on some of those more strategic and differentiating activities and initiatives. Related to this, and equally important is the ability to upskill the team and help your workforce increase their digital assets. Those two have to go hand in hand. So, with that, again, I apologize for not being able to be with you. Hopefully you find the content informative and happy to connect and continue the conversation outside the conference. With that, I’ll go ahead and sign off and turn it back over to the HighRadius representative. Thank you, and enjoy the rest of the conference.

Enjoyed the Session?
Here are some other sessions you might be interested in

Relearning Treasury: Whatever You Know is WRONG!
Craig  Jeffery

Craig Jeffery

Managing Partner, Strategic Treasurer
Radiance speaker's company logo
Success Story: Scaling up Receivables Forecasting at Danone North America with Artificial Intelligence
Jacob Whetstone

Jacob Whetstone

Director, Invoice to Cash, Danone North America
Radiance speaker's company logo

Experience the Power of AI-Enabled Receivables
& Treasury Applications

Schedule a free demo