Why Do CFOs Think Treasury Is Not Strategic?

By Rich Bond

A recent survey conducted by CFO Research and Kyriba revealed that 75% of CFOs think their treasury organizations are not operating at a high strategic level.

CFOs know that the treasury function is vital to the health of their corporation – providing reliable cash flow, mitigating foreign exchange risk, and managing financing activities. A full 78% of CFOs and finance executives view treasury as contributing to the bottom line, more than paying for their expense through actions like negotiating better terms. Yet, these same CFOs believe their treasurers are not contributing strategically.

It would seem the criticism of treasury is related to a perception that treasury is limited to reporting and control.

While CFOs are being forced to think more strategically – looking to the future at what will be happening and how those predictions can be improved upon – they are looking for their treasury departments to do so as well.

How Treasury Can Be Viewed as Contributing Strategically

Unlike the Kyriba study, it is my experience that many treasury functions are strategic. Over six months, I spoke to more than 24 treasury professionals and did some research, which evolved into a white paper: “8 Things Strategic Treasurers Are Doing to Avoid Back-Office Oblivion.”

The paper cites numerous examples of how treasury has not only added valued, but also acted strategically. Here are some examples of strategic initiatives:

  • By upgrading their internal systems, a mortgage servicing company was able to go from paying significant bank fees to generating a net-earned interest credit, which made the business more efficient and profitable.
  • A company was able to improve the cash forecasting process, reducing the time required and improving the accuracy. Better forecasts allowed the company to reduce borrowing expenses.

When treasury acts strategically, they help their businesses run more efficiently and profitably.

I would love to hear about examples of how your treasury group has acted strategically and how you have made your organization aware of those contributions. Let’s set up a time to talk. Call me at 203-221-3233 or email me at richard.bond@bondandcompany.com.

By the way, you can download the white paper by clicking here: “8 Things Strategic Treasurers Are Doing To Avoid Back Office Oblivion”

 

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