Kyriba International Cash Management
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Kyriba International Cash Management

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New economic reality has ‘forced’ corporate treasuries to: ...

New economic reality has ‘forced’ corporate treasuries to:
Adapt
Become more efficient
Design strategies to optimize financial resources

Immediate financial impact will result with:
Larger effort to increase visibility
More efficient banking network
Alignment of liquidity and cash management needs at the local, regional and global levels
Efficient investment in the right technology

Download the PPT to learn more.

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Kyriba International Cash Management Kyriba International Cash Management Presentation Transcript

  • International Cash Management: Strategy and Reality© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. © 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • International Cash Management: Strategy and Reality TABLE OF CONTENTS 1) Int’l Cash Management Challenges 2) Leading to Best Practices 3) Global and Regional Treasury Trends 4) Global Liquidity: Maximizing Efficiencies 5) Cash Pooling and Forecasting 2© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • What keeps Treasurers up at night? • Counterparty risk • Finding a safe, liquid place to invest funds • Risk/return and M&A funding • Availability and cost of credit • Regulatory creep • Obtaining superior returns 3© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Global Cash Management Challenges Challenges we hear about the most  Visibility  Centralization/Decentralization balance  Lack of Technology  Inefficient processes/structures (e.g. Netting, Pooling) 4© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • What Leads to Best Practices? Two drivers for change 1) Overcoming Challenges 2) Key Events • Economic conditions • Regulatory compliance • Market Trends • Changes in domestic cash management practices • Technological progress • Globalization 5© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Global Financial Crisis Timeline • Subprime Mortgage Crisis • US Bailout for Financial Institutions • Financial markets rally • Lehman and Merrill Lynch fail • Economic and financial prospects • UK announces rescue package for RBS, Lloyds • SEC accuses Goldman of defrauding improve TSB and HBOS. investors • Still some economic uncertainty • Northern Rock temporarily nationalized • Greece gets a €110bn (£93bn) bail-out • Eurozone in recession • Irish € 114 bn Bailout . 2007 2008 2009 2010 2011 2012 • Stimulus packages for emerging economies• UK stock market goes through period of • Sharp GDP contraction;, large fiscal packages volatility. • Strong market interventions;• US Housing downturn • Synchronized G3 recession• Credit crunch begins in earnest. • Second Greek Bailout• Northern Rock has sought emergency funding • Eurozone ministers say the legislation from the Bank of England must be passed to receive a 12bn-euro loan Greece needs to pay its debts. 6 © 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Global Cash Management: Opportunities Top Areas to Improve Performance 1) People 2) Process and Efficiency 3) Technology 4) Visibility and Control 5) Expanded Role of Treasury 6) Organization and Influence 7) Risk Management and Mitigation 8) Optimized Liquidity and Treasury Structures 7© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 1) People • Identifying the right people – Hiring, Retention of strategic leaders • Location, Location, Location • Project management focus • International background, knowledge 8© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 2) Process and Efficiency • Continued migration from paper to electronic • Development of long term strategic plans for Treasury, aligned with Corporate objectives • Transactional process improvement (i.e. Straight Through Processing) 9© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 3) Technology • Increased integration with banking partners to automate payments and receipts • Greater reliance on ERP systems and treasury workstations • Leveraging web solutions to minimize IT’s involvement 10© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 4) Visibility and Control • Automated view of domestic and global cash balances, leveraging multi-bank reporting when required • Rationalizing / optimizing bank relationships and structures to improve and streamline cash positions • Adopting global standards across regions for internal process and audit for better control 11© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 5) Expanded Role of Treasury • Control and strong influence over all aspects of working capital • Increased responsibilities and oversight for risk management, including Trade Finance and Capital Markets activities • Corporate Strategic Partner 12© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 6) Organization and Influence • Globalization and centralization of treasury and finance activities • Visibility and accountability for global accounts and bank relationships • Major stakeholder in all key corporate strategic decisions 13© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 7) Risk Management • Managing more risk than before – FX, Liquidity, Supply Chain, Counterparty • Balance centralization vs. localization • Using technology and standardized processes to strengthen controls around risk and exposure management 14© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Top Areas to Improve Performance 8) Optimized Liquidity and Treasury Structures • Cash concentration / Pooling to leverage cash and optimize returns • In-House Banks, global treasury centers, payment factories, and shared service centers • Outsourcing of investment management, reporting and other treasury functions • Inter-company netting and loan administration 15© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Regional Considerations EMEA • Stress that has persisted through 2011 remains major obstacle to growth in 2012. • Questions over how Euro zone officials handle sovereign credit risk may impact how global investors structure portfolios – Greece, Ireland, Italy, Spain and Portugal© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 16
  • Regional Considerations Latin America • Seeing tighter corporate investment guidelines • Inflation still high • Regulated markets w/ more flexible Foreign Exchange controls  encourage USD balances to remain invested • Excess in international liquidity driving domestic exchange rates down 17© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Regional Considerations Asia • Some regulatory easing  China: foreign currency notional pooling • More time deposits being used for excess operating cash • Chinese Renminbi moving fast towards internationalization  Cross Border settlement schemes 18© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Regional ConsiderationsEase of Liquidity Management AUSTRALIA NEW N. AMERICA ZEALAND HONG KONG W. EUROPE JAPAN SINGAPORE EASE OF TAIWAN LIQUIDITY PHILLIPINES E. EUROPEMANAGEMENT © 2011 Kyriba Corporation.INDONESIA All rights reserved. PRIVILEGED & CONFIDENTIAL. PRACTICES S. KOREA THAILAND CHINA INDIA LAT. AMERICA MALAYSIA VIETNAM HIGHLY MINIMALLY RESTRICTED RESTRICTED REGULATORY ENVIRONENT © 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Opportunities to Maximize Efficiency 20© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • When Planning ahead, consider... Can you begin to centralize and standardize your treasury function? 21© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Maximizing Efficiencies: Treasury Structure Consolidate Treasury Management 1) Develop global Treasury policies and procedures 2) Centralize • Global information reporting • Liquidity management through cash concentration structures • Credit facility based on parent company credit standing 3) Consolidate cash to maximize investment and /or minimize debt 4) Evaluate alternative tax effective structures 22© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Maximizing Efficiencies: Bank Accounts Concentrate Accounts 1) Leverage global bank relationships (regional and local providers only where absolutely necessary) 2) Establish bank share of your global wallet 3) Revise overlooked business segments (regional businesses operating with a local bank?) 4) Determine relationship priorities: Investment Banking or Cash Management 5) Objective summary per global bank • Regional bank visits and local representative • Bank scorecard evaluation at least once every 2 years • Account analysis review (Bank Fees vs. Contracted Services) 23© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Maximizing Efficiencies: Working Capital Automate Working Capital Processes 1) Leverage investment in ERP technology to automate the accounting, receivables and payables processes: Accounting • Facilitate In-House bank and Inter-company netting activity Payables • Standardize PO – Invoice, electronic approvals, vendor set-up, settlements processes • Shared Service Center and Payment factory • In-house bank and netting settlements (Cash Pooling) Receivables • Automate cash application process • Integrate into Cash Forecasting 24© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Maximizing Efficiencies: Global Cash Pooling Global Cash Pooling 1) Zero/target balance structures most popular techniques used in cash concentration • NA Treasurers most likely to use zero/target balance structures • EMEA Treasurers more likely to use both notional pooling and zero/target balance 2) Main driver: retaining local treasury control and transparency for subsidiaries 3) Domestic tax considerations have to be evaluated 4) Leverage Treasury Workstations to improve efficiencies 5) Smaller companies: Less likely to use zero/target balance or notional pooling 25© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Maximizing Efficiencies: Cash Forecasting Global Cash Forecasting 1) Demand senior management sponsorship to the process • Assign enough people and financial resources towards project • Spend time and effort upfront during the design phase 2) Leverage opportunity to evaluate and modify banking structures prior to the project* 3) Ensure data is derived from a known source • Consolidate global cash flow data from different applications • Receive data from diverse sources but ensure reconcilable at detail level • Standardize the way data is entered or interfaced from remote locations 4) Provide business users with feedback loop to measure accuracy 26© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Summary New economic reality has ‘forced’ corporate treasuries to:  Adapt  Become more efficient  Design strategies to optimize financial resources© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Summary Immediate financial impact will result with: • Larger effort to increase visibility • More efficient banking network • Alignment of liquidity and cash management needs at the local, regional and global levels • Efficient investment in the right technology© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Questions? Elisamaria Panico: Project Manager Bob Stark: Vice President, Strategy Phone: (646) 616-1414 Phone: (604) 565-1419 Email: epanico@kyriba.com Email: bstark@kyriba.com For more information Please visit www.kyriba.com or call 1-855-KYRIBA-0© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.
  • Questions treasury@kyriba.com kyriba.com 1-855-KYRIBA-0 twitter.com/kyribacorp linkedin.com/company/kyriba-corporation © 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL.© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 30
  • Questions? treasury@kyriba.com kyriba.com 1-855-KYRIBA-0 twitter.com/kyribacorp linkedin.com/company/kyriba-corporation© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 31