At the May meeting of the Global Cash and Banking group, first-time meeting sponsor C2FO will link its liberating working capital mission with the global cash management imperatives imposed by US tax reform to help members learn to do more with less excess cash. More offshore cash from US corporates will be available to return to shareholders, be used for M&A, capex or to fund pensions; so more efficiencies will need to come from treasury to maintain an MNC’s working capital and liquidity and to help suppliers do the same.
Smart discounting to fund suppliers, supported by technology, including technology employing machine learning and artificial intelligence, can be part of the tool kit members will need to maintain working capital for their supply chains with more limited liquidity following repatriation of offshore cash. To improve the liquidity available in general, for their own working capital, members will also share tips and tricks to improve cash flow with better collections management. Read more about working capital optimization here.
The window to further optimize liquidity and working capital management is short, as NeuGroup member companies indicate they will tend to repatriate cash later this year and next. Nearly half of GCBG pre-meeting survey respondents say they will deploy all repatriated cash within a year and 20% will in the next two years. For global cash managers, the time is now to get a better handle on cash to ensure it is there to repatriate and then sustain supplier-, customer- and distributor finance programs once it has been sent home.
As tax reform gets reconciled with the current US tax code and the tax rules of other jurisdictions, global cash managers will then need to work on a potential restructuring of current global cash and liquidity management plumbing. And for this task, the improvements made to working capital efficiency, from invoice discounting to improved collections, provide a little extra room to maneuver. So no need to wait for the tax department to weigh in on the restructuring plan to get started on an effort to become more efficient with cash.
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 more than 30 face-to-face meetings that connect peers, exchange knowledge and distill discussions. These face-to-face interactions, coupled with formal benchmarking, inform actions, transform practices, and enhance careers for the 440 members of the NeuGroup Network. Find out how you can connect at www.Neugroup.com.