Why your Treasurer should have a seat at the table
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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There is huge unrealized value sitting within most Treasury functions!
Traditionally, Treasury has been seen as an inward-looking, highly specialized discipline. In many businesses, it remains siloed away from the rest of the operations and rarely has the opportunity to prove its worth in an interdisciplinary setting.
But this is changing. A new generation of Treasury professionals, supported by forward-thinking business leaders, are demonstrating the huge potential of Treasury - and the practical ways that this can manifest.
Maintain a presence everywhere
Far from being a closed-off department, Treasury should have a presence throughout the business. In addition to its important work on operational metrics and specialist activities such as financing, the Treasury function can bring huge value to a host of other functions and processes.
It's clear, of course, that Treasury has an important role to play in activities such as M&A, where the expertise of experienced Treasurers will be vital throughout. In addition, cash management and cash controls are crucial priorities for any Treasury function.
But Treasury's impact can spread far beyond those boundaries. Treasurers can help to optimize, improve, and launch initiatives and processes that can produce better outcomes throughout the business - provided that Treasurers are given a seat at the senior leadership table.
Unique knowledge
Treasury professionals have a unique insight and skill set that they can bring to bear on other, non-Treasury functions.
In particular, Treasurers have the most comprehensive knowledge of a range of financial instruments, many of which might have applications from procurement to sales and beyond. Indeed, as we've seen in previous interviews with Treasurers in this series, they are generally the first to know about new instruments and financial products as they receive daily pitches from banks and other institutions.
Treasurers also spend much of their time looking at and understanding incoming regulations and keeping abreast of the general regulatory landscape within their industry. It makes no sense for this knowledge to be siloed in one department. Instead, regulatory insight, along with the new perspectives that Treasury can bring to existing processes or planned activities such as acquisitions, should be one of the biggest ways in which the function brings value to the rest of the business.
Ultimately, every deal ends with a cash transaction - and, if we consider the role of Treasury to be defined by cash management, then we can see that the function's remit is enormous.
Much like the Finance Function 4.0 at large, the modern Treasury should be completely embedded and closely interlinked with the rest of the organization in which it operates. The unique knowledge of Treasurers, along with their responsibility for and access to some of the most important financial and operational metrics within the business, enables them to produce insights, new perspectives, and recommendations for optimization throughout the organization.
In this way, Treasury becomes a strategically vital part of the business. It's a value creator, as opposed to a resource drain.
Value tomorrow requires action today
As we've seen, modern Treasury functions have the potential to drive enormous value for their organizations. But in order to realize this potential, they need to be supported and understood by leadership.
There are some simple steps you can take today in order to help make this happen. If you're a Treasury professional, take some time to think about new ways that you can establish a presence across other parts of the business, and some quick wins that you can generate through cross-functional collaboration. Are you involved throughout the cash cycle? Do you understand the needs and daily operations of key functions such as sales and procurement? Arrange to meet with other departments, and use that face time to understand their pain points.
If you're a non-Treasury business leader, it's time to think carefully about whether or not you're getting the maximum value from your Treasury function. Book a meeting with your Treasurer and begin a conversation about elevating the function to its proper role as a hub of inter-departmental activity.
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This was the eight article on my series about Treasury. You can read the previous article(s) below. If you would like to be involved in this series and share insights about the latest developments in Treasury, don't hesitate to reach out!
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If you want to know more about what is happening in the wider Finance Function you can read my latest series "Finance Function 4.0". You can read all the articles in the series below.
You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.
All Successful Business Partners Are "Leaders" (the last article in the series about our new capability model)
Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive on the WHY, WHAT, and HOW of business partnering by putting it on a formula)
Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)
From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)
Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)
How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)
Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with close to 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 60.000+ followers.
17 years of SAP Finance Consulting and SCM integration experience. Handled End to End implementation and Enhancement Projects ( S4Hana , ECC) .
3yThe problem is disconnect within departments . Every function is important as long as Harmonisation and understanding exist. Please highlight any Recommended course available for learning treasury functions. Similar situation are observed Treasury vs finance department Hiring team/ Department vs Appraisal Team / department R&D Vs Production department External Audit vs internal Audit Controller vs legal Reporting
Accounting Exam & Career Mentor | TEDx Speaker | NI 40 U40 '18 & '19
3yGreat point Anders regarding Treasury having first awareness of new banking products and instruments Even more reason for rapport building and quality conversations!
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3yAnders our treasury department doesn’t even sit in the same building. I would say throughout my accounting career this and taxes are two of the areas I have not been exposed to. Sure I understand hedging and cash flow, but as a controlling analyst, we don’t really get involved in the cash flow side of things. But I think we would be served well to understand, as we are responsible for forecasting things like AR and AP, and if we have a poor understanding of how that affects the treasury side, may lead to less time spent on these activities we may not see as important as profitability that is more transparent in the profit and loss statement.