Pioneering treasury solutions for going global

Asian companies are racing to streamline their treasury operations with the adoption of cloud-based technologies, particularly as more of them are planning to expand their footprints globally.

When looking at the Asia Pacific region, a lot of trade deals are being made between companies based in different countries.  Many of them are also looking to extend trade beyond their borders and expand further into the west with some of the international treaties that are coming through, said Kevin Grant, managing director for treasury management at Bottomline Technologies.

Treasurers need to have real-time visibility and accurate forecast of their cash positions, in order to manage working capital efficiently, minimise the interest cost of overdrafts and invest surplus cash to earn extra income. And as the demand for imports and exports across borders increases, they need to better manage their currencies and foreign exchange risk as well.

"So it's really important that in a diversified global marketplace, organisations are able to understand their intraday liquidity positions and make movements of funds that will support their growth," he said.

These will first require reconciliation of treasury management in various jurisdictions, which was once an onerous task until the rapid development of cloud-based technologies in the past few years.

“The important point to make is that historically, organisations tend to have fragmented financial processes, so business units and financial controllers in different countries put their own financial processes in place,” he said.

Reconciliation work used to be very complicated. Even if a company was using one common enterprise resource planning (ERP) platform globally, it was very rare for those ERP platforms to have the same version and configurations, he explained.

However, significant changes have happened over the last five years. Fintech suppliers have started to deploy their solutions in the cloud, making it far easier for companies to apply the technology in different back-end systems across various countries. Organisations can now use modern-day application programming interfaces (APIs) and pull all information up into the one application in the cloud.

"So the cloud does allow for that unification of processes, which gives central visibility and central control, enabling organisations to gain a holistic view of their global financial processes,” he said. 

FOR SMALLER COMPANIES

While the treasury needs of smaller companies are different from those of bigger corporations who are in the journey of going global, they can still benefit from tech-enabled cash management solutions offered by a third-party provider.

Smaller companies may just need cash visibility across their brands. They may only want account receivable and account payable information to understand their cash flow in the next three months, Grant said. 

“They can use advanced forecasting tools to get a more precise estimate of their cash positions for up to 365 days. That kind of visibility provides amazing insights for hedging purposes and putting some risk management strategies in place,” he said.

Start-up companies do not always have well-established treasury functions, so a third-party provider can assist them with compliance, risk control, overlay planning, in addition to everyday cash management.

“Companies can start small and grow, and treasury management tools are dynamic. This means that if they are not large enough to justify a treasury department, the tools can act as their treasury functions until they grow to certain sizes,” he said.

While there has been a reluctance to integrate their internal software systems with third-party ones in some parts of Asia, the mentality has started to change.

“People were worried about viruses and malicious software, but the adoption of cloud technology is more secure. That is a key thing. They need to have secure environments,” Grant said.

These help to explain the rising popularity of TreasuryXpress, a cash management solution offered by Bottomline to help companies automate day-to-day treasury activities. TreasuryXpress manages more than 80 million transactions and processes over $100 billion in payments annually.

“Over the last 30 years I've been involved in treasury, the main aspiration is to take away manual processes and to consume higher volumes of accurate financial information which facilitates business intelligence. Bottomline can help companies achieve that,” Grant said.

ABOUT KEVIN GRANT

Kevin Grant is the Managing Director of Treasury Management at Bottomline Technologies. With more than three decades of treasury and finance experience across North America, Europe the Middle East and Africa (EMEA) and Asia Pacific, he has helped businesses transform their treasury operations by introducing cutting-edge financial technology. Kevin was recognised as one of the ‘100 Most Influential People in Finance’ by a treasury publication in 2010.