How treasury can transform the business

How Treasury can Transform the Business

May 14, 2015, 4:00pmEurofinance Miami

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David FranksTreasury Systems Administrator – Project ManagerDelphi Automotive [email protected]

Steve BullockVice President– North [email protected]

Presenters


Productivity

Financial controls

Global visibility

Effective financial decisions

Single point of data entry Eliminate re-keying errors Improve accuracy and confidence

in analysis

Automate repetitive tasks Shift time from processing to

analyzing Achieve results more quickly

Streamline reporting Automate and schedule

preparation and distribution

Treasury as a strategic partner

Value Creation Hierarchy


Improve data integrity Eliminate reliance on ‘super’

spreadsheets Standardize processes and

procedures

Controlled workflow Separation of duties Reduce SOX audit costs

Centralized audit trails Improve visibility and transparency Better control of workflowProductivity

Financial controls

Global visibility





Productivity

Financial controls

Global visibility


Cash Bank reporting Cash positioning Forecasting LiquidityFinancial positions Investment / Debt Intercompany Foreign exchangeExposures Foreign exchange Interest rate Counterparty / Supply chain




Productivity

Financial controls

Global visibility


Excess cash and liquidity Strategic investing Debt repayment Supplier discountsTreasury movement/analysis Bank fee analysis Search for liquidity Bi/Multi-lateral netting Optimal funding/drawdown Risk Management Better hedging protection Trading diversification Standardized procedures




Productivity

Financial controls

Global visibility


Treasury as a strategic partnerBuild value through collaborative business partnerships Intelligence Insight Analysis

Benefit to the organization:Financial Per-

formance

Risk Man-agement

Operational Improvement

Business Con-tinuity

Regulatory Compliance



Global Visibility Consolidation of positions, forecasts and exposures

Delivers confidence and accuracy for cash and liquidity projections (operational improvement)

Opportunity to optimize returns on excess cash Enables better risk management practiceso Reduced liquidity risko Reduced financial risk (better FX exposure visibility)

Opportunities to Increase Business ValueFinancial Perfor-mance

Risk Man-

agementOperational Improvement


Banking Costs Bank Fee Analysis measures pricing ‘activity’ accuracy In combination with other treasury data, can deliver: o Bank account usage vs. cost – for bank account

optimizationo Total cost of bank relationships, including trading

costs (a.k.a. total revenue banks receive from you)o Spreading around banking business more evenly

Financial Perfor-mance

Operational Im-provement

Opportunities to Increase Business Value


Cybercrime and Fraud Treasury is on the frontlineso Data securityo Protect financial assets

Best practices:o Payment Controlso Outsource data security (the cloud)o SOC1 and SOC2 Audit Reportingo Monitoring and reconciliations

Opportunity to be an example to rest of the organization


Financial Per-formanceRisk Man-agement

Operational Im-provement




Fraud Prevention and Detection

Detection Prevention

Bank account reconciliation Sunset procedures

Application security One-time password, IP filtering

Daily reconciliation Reviewing daily bank transactions Bank fee analysis

Data security Encryption, penetration testing, audit certification

GL reconciliation Monthly true-up of bank to ledger

Bank account management Opening/closing, signatories

Task control center File and task monitoring, approval of workflow

changes

Payments Approvals, limits, automation, authentication

Audit trails Per transaction and system reporting

Financial transactions Controls, limits, settlements


Regulation and Compliance Assessing the impact to the entire business of:o Basel III / LCRo SEC Money Market Fund Reformo FBAR & FATCA

Effect is more than just regulatory compliance What are the opportunities this presents for us? How can we be proactive instead of reactive?



Risk Man-

agementOperational Im-provement



Working Capital Free Cash Flow often a KPI

Treasury determines liquidity and working capital needs

Creates opportunity to collaborate with other teams to affect payables, receivableso Payables Financing o Receivables financing or saleo Metrics to support inventory management


Risk Man-




Mergers and Acquisitions Treasury is key to M&A! Treasurers can help:

o Determine redundancies and cost savings in treasury / banking operations

o Measure impact on credit ratings, borrowing capacity, financial exposures, regulatory compliance

o Assess impact of currency/interest rates on price for and value of acquisition targets

o Advise on ideal capital structure and availability of financing options to finance deal


Risk Man-





Business Expansion Treasury can advise how to grow the businesso Treasury team structure – align financial team

structure with global needs to support businesso Market Expansion – identifying friendly markets

for tax treatment and cash movemento Cash and liquidity deployment – collaborating with tax to optimize cash

deployment/distributiono Payment strategies – Local payments, non-banking payment channels,

mobile payments


Financial Per-formance

Risk Man-agementOperational Im-

provementBusiness Con-

tinuity



Productivity

Financial controls

Global visibility


Treasury as a strategic partnerBuild value through collaborative business partnerships Intelligence Insight Analysis

Benefit to the organization:Financial Per-

formance

Risk Man-agement

Operational Improvement




Use case: Delphi Automotive

Delphi Confidential

Mergers and Acquisitions• M&A Cash Management

Identify Cash Needs

• Liquidity – Quickly identify and analyze available cash by region and by currency.

• Consolidation – Prepare for Cash transactions or Stock Purchase payments.

• FX Risk – Assess and mitigate risk related to payment timing through the hedge process.

• Connectivity – Visibility to new account transactions and balances through Swift and FTP delivery. Improves timing and accuracy of cash position.

• Acquisition Cash Position – Analyze new business units cash needs to determine funding needs.

Delphi Confidential

Mergers and Acquisitions• M&A Cash Management

Bank and Account Management

• Bank Risk – Track and manage bank ratings for acquisition banks. Drive decisions to maintain or migrate accounts to existing banks.

• Signatories – Analyze and track new incoming accounts related to signors. Central Repository for account documentation.

• Cost Reduction – Effectively analyze number of accounts and associated fees.

Delphi Confidential

Divestitures• Unit Sale and Discontinuing Operations

Segregation Activities

• Identify Accounts – Account settings and reference tags allow timely identification of related accounts and balances through reports. Division, Region, Business units etc.

• Signatories – Identify and communicate with bank signors for closing and transferring accounts.

• Cash Consolidation – Cash Position reporting help Identify and move account balances based on the terms of the agreement.

• Regulatory Issues –Address challenges associated with moving cash from regions with governmental restrictions.

• FX and Commodity Risk – Analyze and adjust risk strategy for divested entities.

Delphi Confidential

Divestitures• Unit Sale and Discontinuing Operations

Debt and Investment

• Financial Instruments – Tracking of financial instruments such as Bank Guarantees and Letters of credit linked to divesting entities.

• Intercompany Loans – Identify and Analyze loans for settlement or transfer.

• External Debt – Tracking and central repository for loan documentation.


• Get Involvedo Build relationships that get you “in the room”

• Ideaso Don’t be shy, put your idea out there regardless of how small or big it might be

• You can never automate too mucho You will still have a job, just a better one

• Pay attention to your technologyo Not all software is built the sameo Focus on what can enable you to achieve strategic benefit

Tips and Tricks to Become More Strategic


Q&A


Thank You!

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How Treasury can Transform the Business

May 14, 2015, 4:00pmEurofinance Miami

How treasury can transform the business

Business

Transcript of How treasury can transform the business