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

Blog entry
By aorwick, March 09, 2018
Companies can free up vital liquidity if they pay as much attention to their receivables program as they do to their payables program.
 
Working capital optimization is a key priority for corporate treasurers and is an important benefit of just about all transaction banking products and services. Along with technological evolution, it’s fair to say optimization has been the most relevant strategic transformation driver of the corporate commercial banking space in the last 10 years.
 
Receivables finance solutions bring a range of working capital benefits for corporates, chiefly freeing up vital liquidity – usually at less expense than doing so internally and wrestling with complex corporate structures. But the type of solution a corporate chooses depends on its specific needs.
 
iTreasurer recently sat down with the experts from UniCredit to explore the array of receivables finance solutions available and how companies can use them to stretch their supply chain’s working capital benefits even further. 
 
 
Read this free report to:
 
• Discover platforms that integrate trade and cash management solutions that bring value to receivables programs.
• Unlock a variety of otherwise hidden benefits by developing a better path to maximizing the receivables financing value chain.
• Drive down working capital metrics, such as days sales outstanding (DSO), by selling receivables.
 
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 aorwick, March 05, 2018
Use these key points to benchmark your treasury strategy and technology.
 
The sweeping US tax reform law passed in 2017 has major implications for how global MNCs allocate capital across the globe, putting treasury and tax departments — and the technology systems they rely on — in the spotlight as senior executives evaluate how to spend or invest the cash windfall some companies expect to enjoy in the years ahead.
 
Making decisions on how and where to spend or invest excess liquidity will put extra pressure on treasurers and the technology they rely on to help senior executives make strategic decisions. In a new report, iTreasurer delves into the key points of the new law, what it means for tax and treasury departments and why so-called integrated technology systems may offer advantages to MNCs that must decide how to satisfy their various stakeholders, including activist investors.
 
 
Read this free report to:
 
• Learn what the new tax law means for treasurers, and the bottom line and balance sheets of MNCs.
• Discover why integrated technology systems may give treasurers a leg up as they allocate excess liquidity
• Find out what NeuGroup members said about the tax reform planning process and how they expect to use excess cash
 
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 thoward, March 01, 2018
No, we’re not talking Notre Dame football here (or an Amazon device!). This is an echo of another sort; one that involves corporate sales of US Treasuries and how they could echo US Federal Reserve sales of US Treasuries. And it all has to do with tax reform and cash repatriation, the theme which this month’s iTreasurer continues to explore. Also discussed are FX algos, software and tax reform, risk management, supply chain finance and treasurers helping boards manage risks.
 
First, page 1. The irony of the $3 trillion or so in so-called trapped cash is that about half of it is in US dollar-denominated assets, namely short-term US Treasuries. So selling those bills and bonds could have an impact on interest rates and, according to one observer, create an “echo taper.” This means the selling will happen concurrent with the US Federal Reserve’s project to unwind its balance sheet, possibly putting upward pressure on rates.
 
But it’s a little premature at this point as most companies, while perhaps chomping at the bit for the cash, are still working out what to do. In a NeuGroup poll of peer group members, 66% of respondents said they are still working out plans for repatriated cash, while 13% have plans ready to present to the board and 6% have plans ready to go.
 
In our Anticipated Exposures section on pages 4-5, we discuss the quality of corporate credit markets, where responsibility lies when there is fraud in a SWIFT payment, and how the UK plans to add supervisory fees on MMFs.
 
On page 6, in “FX Algo Benefits Being Realized,” we discuss the continued growth of algorithms in foreign currency trading. In a world where the cost of execution continues to increase, corporate foreign currency traders are constantly on the lookout for tools that provide more transparency and better performance, and algos have a lot to offer.
 
Continuing with our tax reform theme, our story on page 7, “US Tax Reform: Challenges, Opportunities and Solutions for MNCs and Corporate Treasury,” delves into the implications for how global MNCs allocate capital across the globe. With input from risk software company Openlink, we learn how reform will put treasury and tax departments—and the technology systems they rely on—in the spotlight as senior execs evaluate how to spend or invest the cash windfall some companies expect to enjoy in the years ahead.
 
In our peer group summary, we sit in on NeuGroup Corporate ERM Group’s conversation about putting risk management in step with strategy. This meeting cemented the belief that full integration of strategy and risk management should be a key objective for members. Some even argued that having two different terms is counterproductive, because it reinforces the separation of risk from strategy.
 
On page 15, UniCredit suggests ways to improve receivables programs, which in turn can help companies with working capital optimization. This area has become a key priority for corporate treasurers and provides multiple benefits for almost all transaction banking products and services.
 
Finally, on page 19, we discuss how global MNCs will face a multitude of risks this year and how treasury departments can help manage those risks.
 
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 jneu, February 15, 2018

Happy Chinese New Year! Our AsiaCFO members in China have already been celebrating. We are looking forward to seeing them in Beijing on April 13 for their meeting hosted by McKinsey at their Digital Capabilities Center. Building on the discussion of business-finance partnerships to support business in China at their last meeting, this time we consider these in the context of the latest digital manufacturing techniques and what this means for business finance.   

Members of the Asia Treasury Peer Group are also ringing in the new year. Their April 16-17 meeting in Singapore will take our network-wide focus on US tax reform implications for treasury to Asia regional treasury considerations, including cash repatriation from China and longer-term changes to regional liquidity management structures. 

NeuGroup members in the US are invited to attend these regional meetings, or send a group-appropriate colleague, in conjunction with their travel plans or knowledge exchange needs on Asia finance matters, including planning for enhancements to their regional treasury and finance presence. Just another reason to be a NeuGroup member.

Happy Year of the Dog!

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Blog entry
By afriberg, February 12, 2018
On the heels of recently enacted tax reform, members of NeuGroup’s Treasurers’ Group of Thirty (T30) are gearing up for their first-half meeting on March 14 at Cognizant in New Jersey, sponsored by Société Générale. Topping the agenda:
 
Update on new tax rules and impact on capital structure and corporate structures. This meeting will offer expert commentary on the key elements of US tax law changes and IRS regulation that should be in focus for treasurers. That includes fully understanding the mechanics of repatriation (cash vs. non-liquid reinvested earnings), and how to decide on the timing of paying the tax on deemed repatriation. We’ll also cover messaging on capital structure and use of proceeds in response to questions and pressure from key constituencies like rating agencies and investors, including high-profile activists. And what organizational changes or changes to key treasury structures must be considered in light of tax reform?
• Treasury talent. How can the treasurer take the lead on developing treasury talent and keeping employees passionate about their work? Members will share their challenges, best ideas and successes.
• Ideal treasury dashboards and metrics. What elements are essential for your version of an ideal dashboard that truly helps set treasury priorities? We’ll look at whose dashboards and executive management reporting others can emulate, and what reporting elements/data are most valued. As more and more information becomes available in real or near-real time, for example through daily bank reporting straight into ERPs, why should you stick to old-style spreadsheet-based reporting to make data actionable? Power BI, Tableau and other solutions offer opportunities to visualize the data in very customizable ways depending on who will use it and what they need for mission-critical decision making.  
 
In addition:
 
Debt refinancing best practices and optimizing the capital structure. A session featuring input from Société Générale. How can you optimize duration in your debt portfolio as rates rise?
Current state of fintech and blockchain and use cases for treasury. Are you still a cryptocurrency skeptic?
 
For more than two decades, NeuGroup has led 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 aorwick, February 09, 2018
Anne Friberg, NeuGroup Senior Director, returns to the EuroFinance conference on Managing International Growth to share her thoughts on M&A integration and FX risk management on Thursday, March 15, in San Francisco, California. 
 
In its fourth year, the event will explore how treasurers can use the right structures, operations and controls for successful international growth. Ms. Friberg, along with several members of the NeuGroup Network of peer groups, brings her treasury expertise to case studies, workshops and panels throughout the conference. 
 
On Day 2, Ms. Friberg joins Catherine Portman, Treasurer of Juniper Networks and NeuGroup member, to moderate a breakout session entitled “Making the Most of M&A: the Treasury Checklist.” Most M&A deals either destroy shareholder value or don’t have much of an impact at all. These treasury experts discuss how better tax, hedging and balance sheet management can help turn deals around. 
 
To follow is a panel discussion on FX risk, focused on taking a global approach. Ms. Friberg accompanies three NeuGroup members – Rick Lucero, Assistant Treasurer, Dolby Laboratories; Shan Anwar, Director of FX, eBay; and Peter Shen, Assistant Treasurer, Gilead Sciences – on the panel. Thanks to technology that provides better global position data on a timelier basis, global FX hedging is becoming more practical. The group will look at whether it’s worthwhile to manage FX exposures globally, and what critical components treasury can improve on in the process, including hedge techniques, benchmarking and scenario analysis. 
 
To register for the conference, visit https://goo.gl/VcVqvq.
 
For more than two decades, NeuGroup has led 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 afriberg, February 06, 2018
Members of the two NeuGroups for MNC FX risk managers (FXMPG and FXMPG2) are preparing for their biennial “summit” hosted and sponsored by Chatham Financial in Denver, Colorado, on March 7-8. 
 
Here are some highlights from the agenda:
 
Risk management strategy. This ranked first in the pre-meeting topic poll, and the session will focus on two members’ FX risk management strategies and the objectives that drive them. 
• Workflow automation and FX systems. Workflow automation carries over from 2017 as a top priority. This session will include a member company’s story of implementing Reval and streamlining workflows. And experts from Chatham Financial will share highlights of their own workflow offering. 
• Presenting the FX program to leadership and C-suite communication. Led by members, this topic will encompass both the educational aspects of explaining FX/financial risk objectives and how they are achieved, as well as the metrics and reporting that keep upper management up to date on the program’s performance. We’ll also have a dashboard demonstration, continuing our focus on the increasing inroads data visualization tools are making to complement or replace static spreadsheet and PowerPoint presentations. 
• New hedge accounting rules. We’ll dive into the experiences, snags and benefits realized by the early adopters and consider the advice can they give companies that held back. This is one of Chatham Financial’s areas of expertise and they’ll weigh in. 
 
Also on the agenda:
 
Rules and regs roundup. We’ll examine other FASB rule changes and do a roundup of global regulatory compliance requirements.
• Tax reform and what it means for FX risk management. 
• A member’s “solve my problem” session on choosing a new FX accounting rate methodology as it relates to the P/L. 
• Onshore e-trading of restricted currencies.
• Managing the cost of hedging high-carry currency risk.
 
For more than two decades, NeuGroup has led 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, February 05, 2018
The dominant theme on the agenda for the upcoming March Treasurers’ Group of Mega-Caps (tMega) meeting is planning around the implications of US tax reform.
 
As NeuGroup’s tMega members represent the largest corporates with the most substantial amount of offshore cash to repatriate, it is no surprise that determining and communicating what they intend to do with that newly-accessible capital is a huge focus for the first-half meeting cycle. The latest quarterly earnings releases of member companies have or will signal at least preliminary intent. The next step is for these firms to hammer out the details, which will be open to disruption by an M&A opportunity of size, and anyway be subject to scrutiny by investors, be they activist equity or other institutional shareholders, bondholders or their proxies at the rating agencies. And this scrutiny may go beyond these groups: BlackRock Chairman and CEO Larry Fink, heading the largest global money manager, has set the tone in his annual letter to CEOs, urging firms to use the proceeds for US tax reform to help create long-term value for all stakeholders, including shareholders, employees, customers, and the communities in which they operate.
 
What’s important: Corporates now must consider stewardship as a counterbalance to financial performance. Treasurers, therefore, face a thankless mandate to execute on a balance sheet and capital plan that will deliver for a variety of constituencies that probably want both (it’s all a matter of perspective on short-term vs. long-term value creation). This is also articulated by Mr. Fink:
 
“We also see many governments failing to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. 
 
....
 
In the United States, for example, companies should explain to investors how the significant changes to tax law fit into their long-term strategy. What will you do with increased after-tax cash flow, and how will you use it to create long-term value? This is a particularly critical moment for companies to explain their long-term plans to investors. Tax changes will embolden those activists with a short-term focus to demand answers on the use of increased cash flows, and companies who have not already developed and explained their plans will find it difficult to defend against these campaigns. The U.S. tax bill is only one such example – regardless of a company’s jurisdiction, it is your responsibility to explain to shareholders how major legislative or regulatory changes will impact not just next year’s balance sheet, but also your long-term strategy for growth."
 
We look forward to helping tMega treasurers share insight as they develop their execution plans in line with the potentially conflicting demands of the various constituencies their firms are being asked to serve.
 
For more than two decades, NeuGroup has led 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 thoward, January 31, 2018
For corporate treasury, the current landscape is all about taxes and repatriation and all the nitty-gritty in-between. Transition tax, anyone? How about foreign derived intangible income? The tax reform bill signed into law late last year means a whole lot of change for treasurers, particularly as it relates to acquisitions and funding. But at the same time, other issues need to be addressed, like FX risk and technology. In the February issue of iTreasurer we take a look at all of these and more.
 
On page 1 we delve into the impact of the new tax law. “Not surprisingly,” writes contributor John Hintze, “the new tax law that cuts the corporate tax rate and allows repatriation of trapped cash will have a big impact on corporate treasury departments. It should set in motion a ramping up of M&A and push companies to start reconsidering funding strategies; it also introduces completely new elements for treasury to consider when managing cash globally. No need to rush to decisions, however, since much of the law may be subject to change.”
 
In our “Anticipated Exposures” section, we take a look at the impact of tax reform on speculative-grade issuers. In short, the last few years have been a debt-issuance palooza for spec-grade corporates. However, that all issuance might come back to haunt them in 2018. Also, we look at how treasurers should get involved in company M&A plans to help manage the plethora of FX risk that is part and parcel of cross-border M&A deals. This includes choosing a hedging strategy in case the deal collapses. There’s also a look at how utilities will see fewer dollars flowing into their coffers now that the new tax law has come to fruition. This is because the highly regulated businesses base their fees partly on expected tax obligations.
 
In our NeuGroup peer group summary, this month we highlight the Global Cash and Banking Group, or GCBG. At a meeting hosted by Microsoft at its headquarters in Redmond, Wash., members discussed a host of top-of-mind issues, including how technology and digitalization are shaping departments as they undergo various forms of transformation. The digital downside, of course, is all the threats posed to MNCs by cyberfraud and the resultant need for treasury to boost defenses. The meeting, sponsored by Bank of America Merrill Lynch, also touched on the automation of intercompany settlements, blockchain and creating a cash culture.
 
On page 11, iTreasurer discusses how criminals are getting more creative. “You’re a corporate treasurer and you get a call from the CEO, who’s about to board a plane, requesting you to bypass controls and make a payment to a certain supplier’s account.” Do you give up the controls? Absolutely not. Nonetheless, determining who and what is real and what isn’t is getting more and more challenging. One way of preventing payment fraud, according to Bob Stark, vice president of strategy at cloud treasury software company Kyriba, is to protect access to systems and data using two-factor authentication to access banking services.
 
Starting on page 12, in “When the Issuance Landscape Looks Uncertain, Try a Private Rating,” iTreasurer delves into how companies can get a snapshot of how their debt will be received by rating agencies and investors.
 
Finally, on page 15, we look at how corporate treasury needs to drive the process of embracing the digital innovations that are fast and furiously approaching.
 
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 thoward, January 09, 2018
Use this calculation model to compare the cost of issuing long bonds versus multiple short bonds.
 
In a world of historically low interest rates, what is the cost of issuing long-term debt vs. short-term debt? Or more specifically, how do you put a number to the price of extending duration? This is a question that Societe Generale debt capital markets executives were presented with this year when a client was looking at how it could save money issuing debt. iTreasurer explores the bank’s solution in a new report, featured in the January issue.  
 
 
Read this free report to learn how Societe Generale's duration extension calculation model can help you:
 
• Compare the discounted cash flows of various bonds
• Identify a breakeven point that can help you understand how risky the multiple short-bonds strategy was vs. one long bond
• Determine the cost of extending duration in a variety of scenarios
• Gain clarity on your company’s debt program.
 
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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