What's Neu - News from the The NeuGroup Network of Peer Groups

Blog entry
By aorwick, June 13, 2017
The Assistant Treasurers’ Leadership Group considers the likelihood of tax reform, methods for pricing intercompany notes and where to invest cash in recent meeting at Chatham Financial. 
 
Here is a summary of key takeaways from the meeting:
 
The early bird gets hedge-accounting treatment. FASB has addressed new hedge accounting guidance and plans to issue the final language toward the end of June. Chatham Financial anticipates many companies adopting the amended accounting standard early – at the start of a company’s fiscal year after Dec. 31, 2017 – because it facilitates achieving hedge accounting in several ways. For one, components of risk can be hedged if they are contractually specified. Corporates that had term loans in place during the last financial crisis at times saw the prime rate set lower than Libor. However, they could not switch to prime because it wasn’t a benchmark, and all-in cash flows had to be considered, increasing variability and ineffectiveness and prohibiting hedge accounting treatment. Under the new guidance, they’ll be able to if it is contractually specified. Commodity users may be the biggest beneficiaries. They will be able to contractually specify the key economic component to hedge, whereas today variable elements such as transportation and processing are included in the hedge, jeopardizing hedge accounting. Aaron Cowan, global leader of corporate accounting advisory services at Chatham, said corporates early on must adapt their hedging policies and align with auditors on what the accounting outcome will be. Mandatory compliance begins after Dec. 31, 2018.  
 
Don’t bet on radical tax reform. KPMG pegged the chances of radical tax reform at 30% before the ACA repeal-and-replace debacle earlier this year, and now chances are even less, said Kathleen Dale, principal at KPMG. To have a chance of enacting such reform before 2018 elections, it is imperative that the House introduces a bill by the start of August, but the outlook is grim. Radical reform encapsulated in a plan published by House of Representative leaders a year ago, referred to as the “blueprint,” would eliminate interest-expense deductibility and move to a destination-based and territorial corporate tax system to pay for a drop in the corporate rate, to 20% from 35%. The Trump Administration’s one-page summary proposes dropping the corporate rate to 15%, eliminating unspecified tax breaks for “special interests” and moving to a territorial tax system, but not much else on the corporate side. Desperate for a tax win before 2018 elections, Republicans may settle on bits and pieces, such as a lesser drop in the corporate rate and switching to a territorial system. Also likely is a mandatory repatriation tax, supported by both Democrats and Republicans, if for different reasons. 
 
Why BAT? The border adjustment tax (BAT) taxes imports and not exports and highly favors U.S. companies that source and produce their products and services domestically. It’s a key element not only to incent companies to create jobs in the U.S., but to provide a major source of tax revenue for the corporate rate drop. Without it, lowering the rate below 28% isn’t feasible, if tax reform is to remain revenue neutral and not sunset after 10 years. The Trump Administration makes no bones about its proposal failing to achieve revenue neutrality, saying the anticipated economic growth warrants the risk of being unable to renew the law. BAT is designed to mimic many aspects of the value added tax (VAT) prevalent in most developed countries, so it will not be considered an unfair trade subsidy by the WTO.
 
Cash investment conundrum continues. ATLG members exchanged ideas about where to invest cash in the low, even negative interest-rate environments.  Australian banks are paying favorable rates for three-month deposits of USD – one member cited 1.38%. Often the three-month tenor is based on a handshake deal: The bank will pay a decent, if slightly lower, rate for the generally sticky deposits, and in return, the corporate can withdraw the cash sooner if necessary. A few members spoke about dividing cash among short-term, medium-term and longer-term buckets, although less so in the latter these days given the likelihood of mandatory repatriation. “Given the cash we have to today, we would [normally] be allocating more to the longer-term bucket,” said one. “But in light of potential tax reform and repatriation, and since most cash is offshore, we wouldn’t want to add to the risk of having to repatriate.” 
 
Pricing intercompany notes. Noting audits by tax authorities of his company’s intercompany notes, one member solicited suggestions on how to price them. He noted one method involves determining a subsidiary’s stand-alone credit rating and from there deriving a credit spread, although such a rating may not be readily available. A bank recommended using revolving-credit pricing in the specific country as a proxy for the cost of funds there, he said. Another approach may be to strip away the underlying treasury-bond benchmark from the weighted average cost of the parent’s debt and replace it with a spread appropriate for the subsidiary, rated typically one or two notches lower. Another member pointed to an asset-based facility covering a number of subsidiaries that provides an approximation of the market rate, which can then be used for entities outside the facility.  
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, June 12, 2017
From taxes to accounting, the June issue of iTreasurer covers a wide variety of topics, from taxes to new hedge guidance with several stops in between.
 
Beginning on page 1 is a story about how countries are weighing the implementation of the ongoing Organisation for Economic Co-operation and Development project known as BEPS or base erosion and profit shifting. The BEPS plan encompasses 15 action items that are intended to “equip governments with domestic and international instruments to address tax avoidance,” according to the OECD. But the actions are considered “soft rules” and member-country lawmakers can implement them at whatever level of severity they choose. And this will be an important balancing act. Countries do want to collect as much tax revenue as they can; however, they do not want to scare business away either. “My new tax philosophy is not exactly ‘the more, the merrier,’” said Carrie Lam, the new chief executive-designate in her first public speech.
 
On page 6 iTreasurer looks at data from Fitch Ratings Agency that show cash is trickling back to institutional prime money market funds, pulled in by stable net asset values and widening spreads. However, “trickle” is the operative word here in that it is likely that the levels of cash going to prime institutional funds will never reach the pre-reform highs.
 
In the summary of the NeuGroup’s FX Managers’ recent meeting, we hear what group members discussed about the dollar’s prospects and the Fed. Members also received an update about changes to hedge accounting requirements; discussed using options vs. forwards and debated best FX trade execution.
 
On page 11 we discuss how time is running out for those companies that want to get ahead of new FASB hedge accounting guidance that will kick in in 2018. Heavy commodity users should consider adopting early, contributor John Hintze says, because of “several advantageous provisions in the new guidance.”
 
In “Getting to ‘Know Your Customer’ Is a Major Pain” on page 12, contributor Geri Westphal discusses how the KYC “process has become extremely manual and over burdensome with many corporates complaining about the amount of documentation required and the extremely slow response times.” But fintech could help, particularly Blockchain technology.
 
Talent is the subject of a story on page 14, where contributor Julie Zawacki-Lucci delves into a recent exchange between treasurers discussing whether assistant treasurers (AT) should hold a VP title. A majority of those who spoke up said their ATs do not have a VP designation and were reluctant to start handing them out. The reason? Title inflation.
 
Finally, on page 15 we discuss recent goings-on with Brexit. Most observers feel that it will be an orderly exit of the UK from the European Union. However, that doesn’t mean there will not be some tough negotiations and ruffling of feathers. One area that Europe is trying to get its hands on is the highly profitable euro clearing business that is mainly based in London. The EU is busy trying to make this the outcome post-Brexit, with its Executive Commission “readying a draft law on euro clearing with France at the forefront of eurozone countries angling for a piece, if not all, of the lucrative business.” 
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
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Blog entry
By bshegog, June 07, 2017
Balancing the delicate relationship between the risk group and the strategy team is a challenge for the NeuGroup’s Corporate ERM Group. 
 
ERM members recently gathered at Mastercard in Purchase, New York, to discuss risk strategy and mitigation. Here are some highlights from the meeting:
 
There’s a balance between taking too much risk and not taking enough. In addition to identifying emerging risks, members recognized various ways to measure risk. A common struggle is the tradeoff between asserting too much control over risk and driving up operational costs and taking too much risk for the corporation. One member described this process as taking calculated risk. Members also discussed managing personal risk tolerances and not letting those bias corporate risk policies. 
 
The biggest cyber risk threats are not external forces but the internal forces in a company. Ronald Green, Chief Security Officer of Operations and Technology at Mastercard, shared his thoughts on internal security threats. Employees clicking on false links or responding to “fake” employees is an increasing problem, Mr. Green said. Theft of intellectual property is another problem that risk managers need to address. 
 
Members left the meeting prepared to use alternate sources of data, improve ERM reporting and train the next generation of ERM practitioners.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By bshegog, June 06, 2017
The Treasury Investment Managers’ Peer Group 2 talks tax reform, counterparty risk and vehicles for short-term liquidity in meeting sponsored by Capital Advisors Group. 
 
In an effort to prepare for possible tax repatriation and the transition from high government money market fund balances to a higher yielding alternative, members reviewed their investment options during the H1 gathering at Autodesk. Here are some themes from the discussion:
 
Money market fund reform has provided challenges and opportunities, noted Ben Campbell, CEO and CIO of Capital Advisors Group. There’s no doubt that MMF reform has significantly impacted investment management. Because of the regulation’s fees, gates and floating NAV, the market has seen a shift in the investment landscape, with over a trillion dollars leaving the funds. Several sessions were dedicated to filling the prime fund void. 
 
Fed is on the move in more ways than increasing Fed Fund Rates. The market is pricing in 100% probability of a June Fed rate increase, and three more increases are expected before January 2018. Adjusting Fed rates is certainly the most visible and well-reported mechanism the Fed uses to control interest rates. However, it’s also important to keep an eye on the Fed’s balance sheet normalization, said Lance Pan, Director of Investment Research at Capital Advisors Group. The divesture of the $4.5 billion in assets on the balance sheet will have significant implications for the fixed income market. Mr. Pan walked members through the impact this divesture will have on the corporate investment portfolio. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By jneu, June 02, 2017
At a time when treasurers have a lot to process, judgement may get lost in the need to get things done during the next-wave transition to digitalization.   
 
Treasurers’ Group of Mega-Caps members met for their (rescheduled) 2017 H1 meeting on May 17. Planning for tax changes, particularly the potential use of repatriated cash, remains a key priority for members. However, highlights of the day also included a presentation on planning for the digitalization of treasury and the resulting need to recruit staff members skilled in data visualization and software languages, including R and Python. Right on cue, one member discussed how the company’s machine-learning tool helped forecast accounts receivable with 15%-20% less volatility. This prompted some members to voice concern that overreliance on data may leave some treasury departments with staff lacking the judgment and real-world experience required to react appropriately to change.
 
Surfing the digitalization wave. Rapid advances in automation and digitalization present both immense opportunities and challenges for treasurers unsure if their staffs and platforms are well positioned for what one treasurer calls the “digitization storm” that’s creating “non-specific anxiety about the future.” To ride the wave and prevent what this member has labeled the “tsunami effect,” treasurers must look within and beyond their departments to find staff skilled in data visualization tools to aid in forecasting, including programming languages R and Python, and encourage learning of required skills. But as one presenter half-joked, “Excel is really hard to kill,” suggesting this transformation will take time as treasury moves outside its comfort zone and embraces new tools. 
 
Redefining treasury. The uptick in technology change is also impacting treasury transformation projects. One member described “immense change” as he pushes to move his treasury department “into the 21st century,” improve risk management and complete a 10-year “journey” to get SAP implemented across all businesses. He and others described ongoing efforts to define what duties fit into core treasury, what can be relegated to service centers and what doesn’t belong in treasury. Most members agreed that while centralization is key for control, a model based on “following the sun” that shifts responsibility and oversight to regional treasury centers as the sun moves from Asia to Europe to North America is optimal. Also deemed ideal but not common is what one member has achieved: having M&A valuation report to treasury, avoiding what another treasurer described as having 10 groups come up with 10 different costs of capital when evaluating a deal or relying on a corporate finance team that, as another member said, “will make any deal look right.” This valuation role is consistent with the increasing need for treasury to support broader business goals as some functions like cash management are automated.
 
Finally, as members confront the reality of digitalization forcing change on the treasury of the future, some found common ground in warning that overreliance on data will leave departments ill-equipped to deal with real-life scenarios requiring hands-on experience. “I get a little worried about judgment versus data. We’ve seen this movie before,” said one member, also mentioning the issue of pushing too much responsibility to shared service centers. That said, there is widespread recognition that treasury needs to make use of new cloud-based tools and find staff well versed in the tools and programming languages that will allow more senior treasury members to make better decisions and focus on supporting broader business goals.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By aorwick, June 02, 2017
The Assistant Treasurers’ Group of Thirty discusses tax reform, the political economy, superforecasting and blockchain in meeting sponsored by Credit Suisse. 
 
Tax reform: Preparing for the unknown. Most AT30 members pointed to tax reform as their companies’ top priority, despite its uncertain outcome, and a majority said they’ve prepared various scenarios for senior management. On the topic, Credit Suisse’s Sal Seguna compared the Trump Administration’s and Congress’ proposals, laying out and contrasting their components. The controversial border adjustment tax (BAT) will likely be reined in significantly, he said, and limiting debt-related deductions will face major hurdles. Since the legislation will probably utilize the reconciliation process to skirt a Democratic filibuster, it must be revenue neutral — unlikely — or it will have to sunset in 10 years. If the healthcare repeal and its tax cuts die in the Senate, the corporate rate is unlikely to drop beneath 25%, Mr. Seguna said. Lowering individual tax rates will likely be a political necessity, flowing retail money into fixed-income and tightening spreads. If corporates spend too much repatriated cash on buybacks and dividends, Credit Suisse believes the rating agencies may eliminate “net debt” treatment, pressuring ratings downward.
 
The times they are a changin’. One member company recently begun shifting its massive investment portfolio to safer territory. Traditionally split into buckets for operating cash, short-term investments and a strategic return portfolio, the treasury department has improved its operational efficiency, cash forecasting and pooling structures to identify excess cash more quickly and move it into higher yielding investments. With global volatility and a diverse collection of businesses to manage, the member decided it was time to reduce investment-portfolio risk. The portfolio will have a shorter duration with maturity limits on securities, and its allocation to agency mortgage-backed securities will shrink.
 
Global outlook? Fair to middling. A trio of experts from Credit Suisse updated members on changes in the global markets and political economy. Their message: Things could be worse. Optimism will likely taper as uncertainty grows around Republicans achieving their policy goals. Two additional rate hikes are more likely than three. And the Fed is likely to change its formal investment policy and seek to shrink its balance sheet, potentially sapping economic growth if offsetting measures such as easing Basel III take too long to arrive. Finally, expiring terms at the Fed will enable the Trump administration to significantly shift monetary policy. Obamacare repeal is unlikely before summer, and tax reform is unlikely before first quarter 2018. Credit Suisse foresees inflation remaining muted. 
 
Watch out for superforecasters. Keep your eyes open for what Michael Mauboussin, head of global financial strategies at Credit Suisse, calls “superforecasters.” They are exceptionally talented at making political, economic and social forecasts, stomping control groups by double-digit percentages and even CIA analysts by 30%. Superforecasters understand clearly what they know and what they don’t, they actively seek other points of view, and they perform even better in teams. 
 
The biggest development no one understands. Last year, the announcements about blockchain initiatives arrived one after the other, but assistant treasurers were apparently too engrossed in integrating mergers and cash forecasting to learn the ins and outs. Nevertheless, numerous AT30 members expressed interest in better understanding the distributed database technology, which encrypts information into immutable blocks and may ultimately make many costly intermediaries obsolete. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, June 01, 2017
The Internal Auditors’ Peer Group kicked off its 2017 get-togethers with a very full day-and-a-half meeting at Hewlett Packard Enterprise in Palo Alto, California.
 
Members of the IAPG discussed a wide range of topics at its first-half meeting, among them driving accountability in remediation, auditing business partners, working with legal and integrated audits. There were several key takeaways from each of these sessions. Here is a sampling:
 
Audit and legal: same goal, different approach. For the most part, audit plays well with the legal department. That is, they have a good relationship. However, that doesn’t mean there isn’t tension. For instance, one member discussed how legal and audit have the same goal in protecting the company. But they go about it in different and sometimes opposite ways. For its part, the audit department strives for a certain amount of transparency of process. If there is a problem, it must be identified, and if serious enough, reported to the audit committee; the argument here is that the overseers of the company – the Board and its audit committee – should be aware of troubles brewing that could cause the company harm. But legal may say “hold on a second,” arguing that identifying or pointing out a problem and calling it out to the audit committee could open up the company to liability well beyond what it may have planned or thought of. Wouldn’t it be wiser to approach in a more cautious way? Each argument has its merits, which means both departments should work together to resolve any differences and put the company’s interest first, of course.
 
Third-party vendors: articulating what you want. In a session on auditing third parties, presenters from one member company discussed auditing a third-party data storage company. One lesson learned in these audits is that companies only get as much service as they ask for – even if they think they are paying for a certain amount of service. The presenters gave the example of a data storage area at one vendor of two different companies. One area was messy and looked very suspect in all phases, from backup to security. Meanwhile, an area next to it storing data for another company was completely buttoned up and neat, leaving no doubt that its data was being taken care of in a better way. The interesting thing is both companies were likely paying for the same level of service, but one had laid out specific parameters for its storage and checked on it more frequently. The other company perhaps assumed it was getting the same level of service, but never asked or made sure.  
 
Of course, on one hand, this doesn’t sound like the greatest vendor in the world, and one could argue that allowing such sloppy service for one client while the other, for no more money, wouldn’t get it much more business. But it does illustrate the need to for more frequent checks, i.e., audits, to make sure you’re getting the same level of service as the company next door.
 
Remediation: time is of the essence. For auditors, one thing worse than a process problem is having it linger unresolved. That’s why internal audit sometimes struggles with getting those that own the issue to fix it in a timely manner. There are priorities of the auditee that need to be considered. But even that can be adjusted with help from management. At the presenting company, after getting a mandate from the CEO to fix things ASAP, internal audit was able to compress remediation times down to 90 days from sometimes a year or more. This was a gradual process, but if it wasn’t done, the process owner would have to explain to upper management or sometimes the audit committee why it wasn’t fixed. This is something most of them try to avoid.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By wchan, May 26, 2017
The Asia Treasury Peer Group (ATPG) recently met at Nike’s Singapore campus to consider the region’s complex regulatory landscape.
 
Some corporates invest a significant amount of time and effort in managing their relationship with local regulators. In China and India, for example, treasury professionals will negotiate exceptions to existing regulations or seek clarification for vague regulations. Furthermore, they have to document communications and approval from regulators to safeguard their activities. 
 
On the other hand, some corporates prefer to act more conservatively so they’re not perceived to be influencing regulators in any way. One member asked, “How do you manage your relationship with SAFE, the Chinese government agency?” Another member replied, “It’s like dealing with my in-laws. I rely on my spouse to manage that relationship, and in this case, I rely on my banks to do the same with SAFE.”
 
The group went on to discuss the balancing act of checking metrics and setting good targets to govern treasury activities and drive performance. Some members use annual (internal) customer surveys or review achievements in pre-agreed areas of influence and focus areas. Still, others compare budgeted cost against value-add to justify the team's existence or focus on compliance matters. There is no ideal set of KPIs for treasury, so perhaps the intent should be that every metric drive behavior and activity that either reduces cost, reduces risk or increases value-add. No matter the KPI, a treasury scorecard improves visibility of treasury within the company, so that the value-add that treasury brings is acknowledged. This helps significantly with senior management messaging.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By jneu, May 22, 2017
Tech20 members came together earlier this month at PayPal in San Jose, California, for the 2017 Tech20 mid-year meeting sponsored by Bank of America Merrill Lynch. 
 
While other items were discussed, including the potential for and shape of US tax reform, the main focus was a large enterprise initiative that PayPal is rolling out in response to member feedback. At last year’s meeting, members pointed out concerns they had with account management and risk controls for PayPal accounts. Enterprise-level controls and user management on par or better than their bank account equivalents were needed to grow PayPal usage beyond nuisance payments to small vendors and customers, often inherited in an acquisition. 
 
Seeing an opportunity, PayPal’s treasurer reached out to Tech20 members for more detailed feedback on what they would like to see. This has led to a large enterprise initiative with full c-suite buy in, plus development of a new enterprise portal that will extend the PayPal use case and pay dividends to smaller company customers who desire world-class account management and risk controls.
 
This is also a great example of how NeuGroup creates value with knowledge exchange and shows how members give insight to get better solutions. Here are some further thoughts on payments innovation:

 
Piggybacking on a payments showcase demonstrating the digitalization of payments via mobile phones that PayPal is helping to lead, the group also discussed the digitalization trends impacting treasury. One clear outcome is that treasurers need to tap Millennials to help build better data analysis, reporting and visualization tools. Millennials are unafraid of learning new tools and even the code to make them work, and they should be encouraged to do so.
 
Finally, the group touched on ongoing M&A integration challenges. If tax reform instigates a new wave of strategic acquisitions by tech companies with now usable offshore cash, the need for effective M&A integration plans will only grow. In line with this need, NeuGroup had just compiled at the request of a member company's new treasury ops head a summary of recent M&A integration discussion takeaways to help treasury operations better absorb acquisitions. This was promptly distributed to the entire Tech20 following the meeting.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 

 

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Blog entry
By gwestphal, May 19, 2017
The Global Cash and Banking Group keeps focus on tech, tax reform and working capital management in meeting at Electronic Arts. 
 
Highlights of the meeting, sponsored by Deutsche Bank, include: 
 
Stay the Course. Innovation and project implementations continue to be top-of-mind for members. Many are embarking on significant implementation projects, including ERP upgrades, SWIFT implementations and TMS rollouts. Kyriba was the system most often mentioned as part of the member implementation plans. 
 
Alliance Lite or Service Bureau? With SWIFT implementations taking center stage, the group had a robust discussion about the benefits and challenges of two solutions: Alliance Lite and the use of Service Bureaus. Members shared pros and cons of both solutions, with no clear “winner.” Company size and complexity were key components in deciding the appropriate path. It was also suggested that Alliance Lite could be used as a primary solution, with a Service Bureau arrangement in place as part of a disaster recovery program, used only in the case of emergency. 
 
• Tax Reform and the Narrow Road Ahead. The group also discussed the uncertainty in the US & global economic environment as all await further guidance from the current administration. There are hopes that any reform will include the possibility of favorable tax treatment on foreign repatriation and the potential for a lower corporate tax rate. Hailey Orr of Deutsche Bank led the group through a variety of scenarios with an overall bias toward a more tempered “middle of the road” plan that is significantly less impactful thans what President Trump described as part of his campaign. It isn’t likely that any significant changes will be approved and/or implemented until later this year or potentially into early 2018.  Members confirmed that they have been busy preparing for a variety of scenarios if a tax repatriation program is approved, but for now, things are on hold.
 
• Is Your Cash Hiding? As part of the Open Forum, members discussed the increased attention on overall Working Capital Management. Most companies confirmed that Treasury has either taken on full responsibility, or acts as a major contributor, as they engage with other departments to define ways to improve processes and thereby better manage cash along the full working capital continuum. Dynamic discounting and traditional SCF strategies were discussed as possible solutions to bring added efficiency to working capital management. 
 
• NOT Ready for Real-time. Real-time payments are not a current focus for most members because of the system changes that would be required to accept and process on a real-time basis, but also, and maybe more importantly, they are not interested in the significant hit having to make real-time payments would have on their overall working capital cash flow. The float is still very important on outbound transactions. 
 
The group will gather again on Sept. 27-28, 2017 at the Microsoft headquarters in Redmond, Washington, in a meeting sponsored by Bank of America Merrill Lynch. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
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