The document discusses the centralization vs decentralization of treasury management. It outlines the main responsibilities of treasury as protecting company assets through cash management, risk management, liquidity management, and other functions. It notes benefits of both centralized and decentralized models, with centralization allowing for economies of scale, cost reduction, and risk visibility, while decentralization allows for flexibility and local market knowledge. Factors that influence the choice include management attitude, company situation, growth, and technology. Overall, companies have increasingly centralized treasuries for better control, efficiency, and visibility, though standardization globally remains a challenge due to regulatory differences.

1. Treasury Management
Centralization or decentralization
TREASURY MANAGEMENT SUMMIT
JULY 2014 - BOSTON

2. Treasury Management
What are Treasury’s main responsibilities?
Protect the assets of the company
 Cash management
 Risk management
 Liquidity management
 Debt management
 Cash forecasting
 Banking relationships
 International funding
 Repatriation strategies
 Strategic partner to the business units

3. Treasury Management
Benefits of a decentralized Treasury
 Flexibility – local subs manage their cash and investments in
line with local market conditions
 Proximity and knowledge of local market provides an
advantage to select appropriate debt/investment vehicles, fx
hedging instruments, banking partners
 Local staff has more intimate knowledge about local
rules/regulations, business/legal/tax/banking environment
and local customs
 Local staff takes pride in managing all aspects of the
operations

4. Treasury management
Benefits of centralized treasury
 Economies of scale
 Rationalization of costs
 Identification of cash and risk
 Cash flow forecasting
 Investment performance and risk
 Access to financing and liquidity
 Banking relationships
 Allows local staff to focus on growing the business

5. Treasury Management
What factors have an impact on a Company’s
selection of centralized versus decentralized
treasury?
 Management’s attitude
 Company’s specific situation
 International presence
 Type of business
 Growth prospects/cycle
 Sophistication ERP systems
 Treasury Management Systems
 External Factors
 Global-regional financial crisis

6. Treasury Management
 The movement toward treasury centralization has been in
progress for many years and led by the need for greater:
1. Control and efficiency
 Centralization of processes across the organization
provides better control and efficiency
2. Visibility
 Provides treasury with a view of exposures and ability to
manage liquidity
3. Cost reduction
 Multiple bank accounts and systems can be consolidated

7. Treasury Management
 What factors have allowed more Treasurers to continue
toward centralization?
 Globalization of markets
 The global financial crisis emphasized the importance of
managing liquidity and risks (counterparty, FX, interest
rate)
 Technology
 Legislation (Single Euro Payment Area, Payment Services
Directives)

8. Treasury Management
 Summary
 In general, companies have been moving toward Treasury
centralization for many years due to the numerous benefits.
 Treasury needs the communication and cooperation of the
local staff to provide insight.
 Standardization of processes is not easy to implement globally
due to different rules and regulations.
 Centralization is not only the standardization of data and
processes which results in improved visibility and control.

9. Treasury Management
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