International Cash Management

Although the origins of cash management can be tracked back to 1947 when RCA became more of the first companies to use a lockbox in the US, advances over the last 70 years have resulted in profession that has significant impact on a company’s bottom line and on shareholder value. The treasury function has expanded to include not only cash management but also functions such as finance and financial risk management.

Originally, the primary role of treasury was to ensure a company liquidity, making sure that the bills could be paid when due. Over the years it has evolved from being a largely transactional function into that of sophisticated analyzer of information, assisting in underpinning a company’s longer-term financial viability, through information management, risk minimization and relationship management. More importantly since the financial crises in 2008 the role of the treasurer has been viewed as having increasing strategic, importance to the company and has been elevated to the ranks of senior management.

ICT

Some of the major developments that have promoted this evolution are:

Technology:

Technology has provided the tools for information management, analysis, global relationship management, automation of the function, interfaces with the outside world and linkage with internal systems.

Globalization:

As companies have expanded globally in search of new markets, new suppliers, cheaper sources of labour and risk reduction they have needed more highly skilled personnel and techniques to manage the international cash flows.

The economy:

Historical periods of high inflation and the occasional global recession means that optimising a company’s cash becomes increasingly imperative. This has never been more relevant than during the recent economic downturn.

Innovation:

Optimizing cash globally has required better, faster information, techniques for managing cash across borders, ways to reduce risk and more efficient ways to connect internally and externally. The banks continue to develop new products and services to meet these needs and, more recently, technology and software companies have also become important providers of solutions for treasury.

Regulatory:

Legislation continues to be introduced world-wide requiring environment increasing levels of control and corporate governance. This means that treasury’s role in providing information and transparency of information is of paramount importance.

Internet:

Not least of the innovations of the last decade has been the introduction and wide-spread use of the Internet in developing electronic commerce. For smaller companies, the Internet has been instrumental in lowering the cost of access to technology and allowing them to operate more cost effectively.

Mobile banking:

More recently, consumers, and to a lesser extent corporates, are increasingly using mobile technology to perform banking functions. This brings with it new challenges to ensure security of the channel and transactions.

Standardization:

While this is still far from a perfect world in terms of standardisation significant progress has been made in this area, initially on an in-country basis and most recently cross- border. Standardisation is important in enabling automation and straight-through processing (STP).

Professional:

Throughout the world there are professional associations that associations provide information and promote the ongoing education and certification for new treasury professionals.

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