Treasury & cash management
of the work. There was this sheer volume of work and it was all really strategic – and really important. It really threw a spotlight on the treasurer.” “From the get-go, it was all liquidity, liquidity, liquidity, and CFOs and executive boards needed to know what was happening,” Stockmann continues. “People who had been cash-rich before suddenly weren’t and they needed to understand their position – they needed cash flow forecasts, which they maybe hadn’t had to look at before. There became a much greater awareness of what the treasurer did.”
Growing profile It hasn’t always been this way. The role of the treasurer has often been poorly understood, due in part to a lack of worldwide cohesion within the sector. “If you look across the UK and Europe, treasury is pretty developed,” Stockmann suggests, pointing out that the ACT was formed back in 1979 in recognition of the growing importance of treasury management. “If you look to say, the US, it’s still pretty strongly cash- focused except for the largest organisations. If you go to Asia, the Middle East and Africa, often organisations still don’t have a specific treasury function – over time we’re seeing that change.”
Start-ups and tech companies in particular are increasingly recognising the inherent risk of not having a treasurer. They’ve realised that the role of treasury is unique compared with other aspects of money management. Stockmann says the differences between treasurers and, for example, accountants or financial controllers, are now much better understood. “If you are accounting for control, you’re often looking historically – you may still be forecasting, but you’re often looking on the basis of what you’ve already seen,” she explains. Conversely, treasurers are focused externally and on the future in terms of dealing with investments or raising funds. Throughout the pandemic, the ACT and other international organisations like the EACT have provided support for treasurers, from technical guidance and Covid checklists to videos and how-to guides to help with equity, resilience and FX risk management. A key element of that support, explains Stockmann, has been raising awareness of mental wellbeing, especially during such an unpredictable period of activity. She says in this regard, treasurers have long been used to the pressures of the job. “Treasurers have always had to work very hard and for very intense periods,” she explains. “If you think about the role, there will suddenly be something that they need to do, say a deal, where they’re really flat out. So they have, generally speaking, got a good level of resilience, and that held them in good stead.”
That resilience proved particularly valuable at the start of Covid when treasurers were forced to work from home. The transition, says Stockmann, was relatively smooth. “There were a few niggles with
Finance Director Europe /
www.ns-businesshub.com
banks that found it harder to adapt and there were some delays in getting set up, but treasurers themselves adapted well.”
Tech transformation
These cultural changes are being accompanied by technological shifts. Stockmann says that the uptake of new technology during the pandemic was noteworthy in a sector that has often been reluctant to embrace change. The ACT’s 2021 Business of Treasury Survey, for its part, found that 55% of treasurers said the pandemic had accelerated the rate of adoption of technology within their company. However, the survey also found that treasurers had spent less time than anticipated on technology, and the time that was spent on new gadgets was often geared towards working from home capabilities rather than more fundamental transformations.
“Treasurers have always had to work very hard and for very intense periods... There will suddenly be something that they need to do, say a deal, where they’re really flat out. So they have, generally speaking, got a good level of resilience.”
That’s not surprising, Stockmann suggests, given the unique set of circumstances treasurers have faced over the past 18 months. A lot of investment in machine learning and AI, for example, was put on hold. “Now that we’ve gone through the harshest months of Covid, people have started to pick up on that again,” she explains. “In terms of technology, though, treasurers have always been a little bit ‘let’s wait and see.’” Even so, the ACT reported that around 80% of treasurers surveyed said they were interested in technology, with younger treasurers and those from ethnic minorities particularly eager to put it through its paces.
“Over the past few years, there has been a fear that machines might take away our jobs,” says Stockmann, adding that it’s not a concern unique to treasury. She points out, however, that an average multinational might have four people in a treasury team. “Strip out the very, very large companies that might have 600 treasurers, and the average drops to about two people to do everything – FX management, liquidity management, investment, raising of funds,” she says. “So other than in those very, very large organisations, most companies won’t have the means for a reduction in numbers.”
Instead, the sector can use technology to free treasurers up to concentrate on more value-added and strategic work. Much of the time, Stockmann says it’s about exploiting technology and having the system perform the tasks that human beings simply cannot do: “And here we’re talking about big data,” she says.
39%
The percentage of treasurers that are working more closely with their boards as a result of Covid.
60% ACT 31
The percentage of treasurers that say they need to improve their people management skills.
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