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Designing a Blueprint for Optimal Treasury and Working Capital Management

To maximize efficiency and improve control over treasury and working capital management, many treasurers over the last several years have undertaken a detailed diagnostic analysis of their treasury operations and commercial flows. Core to this activity has been peer benchmarking to identify best-in-class practices, which, when combined with the diagnostic...

By Michael Guralnick, Global Sales Head, Corporate and Public Sector, and Global Marketing Head, Treasury and Trade Solutions, Citi | Updated on October 27, 2014
Michael GuralnickIn today’s evolving global business environment, companies are seeking to create an optimal treasury management and working capital blueprint. The key steps in this journey are to: (1) intensify engagement with key partners, such as procurement, credit control, supply chain, sales and marketing, and (2) undertake a detailed diagnostic analysis of existing end-to-end processes. The results from the diagnostic can be assessed against external peer benchmarking to identify areas for improvement, such as liquidity management, systems and controls, risk management, technology platforms and policies and governance.

It is important to design a blueprint that is flexible given the need to respond quickly to external and internal factors that arise from a number of factors, such as: geopolitical circumstances, regulatory changes, corporate redesign as a result of M&A and spin-off activities, technological developments, and growth in the emerging markets. It is critical that the treasury team remain nimble in their ability to address these issues, which keeps them relevant to support the successful implementation of the company’s strategies. Post the recent credit and liquidity crisis, many multinationals have made significant effort to free-up cash trapped within their global operations, and as a result, many companies want to take the next step.

Rather than simply seeking short-term wins, forward-thinking companies are scrutinizing their operations, organization, processes, and systems to understand how they interact with their financial and commercial flows. The goal is to improve productivity, minimize risks and support accelerated business expansion.

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