Tech20HG’s Pilot Meeting Navigates Treasury to the Future by Looking Forward

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Tech20HG’s Pilot Meeting Navigates Treasury to the Future by Looking Forward

The pilot meeting of the Tech20 High-Growth Treasurers’ Peer Group sponsored by Bank of the West/BNP Paribas and hosted by ServiceNow included asking what first drew participants into treasury. Many started in accounting and almost all of them said they liked that treasury is forward looking and supports driving business growth. That treasury also tends to touch most aspects of the business in helping to drive it forward also has appeal.
 
This forward looking-theme carried through to all the other pilot meeting sessions. Here are some of the meeting’s key takeaways:
 
  • Cash awareness a matter of culture, so start building it. One challenge for growth company tech treasurers is their firms are used to generating so much cash that they tend to ignore the need to forecast and use it efficiently. So treasurers at such firms must do even more to build a culture of cash awareness to gain better visibility and cash forecasting accuracy for when it becomes more mission critical in the future. One treasurer created stickers and buttons to hand out to everyone in the company to get them thinking more about free cash flow. 
 
  • Step back to assess new bank relationships. As growth companies outgrow their incumbent banks they need to build a new bank group. This is not a decision they should make quickly. The consensus of the group was that they should step back and do their homework, figure out who are these banks, what are their capabilities, what coverage and commitments do they get and what kind of person will cover them, and do they know what they are doing. Also important is how the credit underwriting is done. 
 
  • Find out what matters to the C-suite. One treasurer told the group he had been trained to understand what matters to his bosses and then figure out how to align his own treasury objectives to what they care about. If your boss cares about ROIC, then treasury’s mission can be about that. To find out what matters to your boss, sometimes you just have to get lucky. When he started his latest treasurer role, it was at a company with a several-decade history but no real treasury activity to guide him on what the C-suite valued from its finance function, so he had undertaken a study of what it had done and what it had not, including share repurchase, which the firm had not done. One day, the CEO came in and said the stock was priced too low and he wanted to buy some back. It turned out share repurchase was something he cared about. “It is often better to be lucky than smart,” the treasurer noted.
 
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