Hidden costs, hedgehogs and other lessons from the ACT Annual Conference

The ACT Annual Conference 2018 in Liverpool brought treasurers together to exchange notes. Liz Loxton reports on key lessons from Liverpool

1. The Business of Treasury

This year marks the sixth edition of the ACT’s annual, in-depth independent survey of treasurers from around the world, The Business of Treasury. Released to coincide with the annual conference in Liverpool, the survey brings a wealth of insights into the developing role of the treasurer.

Primary among those is confirmation that treasurers are starting to drive the strategies of their businesses: 87% of survey respondents agree that treasurers enjoy a strategic role in their organisations. Furthermore, 45% consider themselves to be either defining strategy or working with colleagues to do so.

In other findings, treasurers can look forward to greater investment in their human and technological resources in the coming year: 72% said their organisations would invest in recruitment and/or training, while 66% planned technology and automation investment. On a risk management front, the external issues that are very much front of mind for treasurers include cybersecurity, financial markets volatility and geopolitical uncertainty.

Download the report here.

2. Hedgehog spikes

In a session on leadership and networks, it emerged that when it comes to the workplace we can be seen as hedgehogs with a unique set of strengths and qualities – or spikes.

Equating skills or knowledge with spikes proved a memorable and effective way of furthering group discussion in this session. Strong leaders – and potential leaders – it turns out, tend to be those who are aware of their own qualities and those of other hedgehogs around them. They develop a personal brand that allows them to deliver on those qualities.

They also know how to forge meaningful relationships with key people in their networks, in order to crowdsource what they need – enabling them to fill gaps in their skill set and plug into the knowledge and experience of a wider group. A high level of awareness on how individuals can operate together and complement each other given those different qualities, skills and knowledge sets can be a powerful enabler in a work context.

3. The smaller team

Treasury departments within smaller organisations are often borne out of necessity and are sometimes invested in only very gradually as companies grow. A panel discussion on the life of the smaller treasury team revealed just how hard it can be to make the case for greater investment and automation. It is often the case that the small treasury team will need to prove itself bit by bit.

Small gains described by the panellists included implementing a netting system or a cheap and easy-to-install cash-forecasting system, both of which are examples of the kind of problem-solving approaches that help the treasurer demonstrate that an active treasury can deliver cost savings and efficiency improvements.

A treasury management system can be hard to justify, it emerged in the discussion, but boards or CFOs can sometimes be persuaded to invest when their treasurers build a case based on operational risk. When businesses carry a lot of debt and have swap books of some scale, it can become easier to make a case that greater complexity brings with it more scope for error.

4. Opportunity cost

Not often captured by traditional financing reporting, an opportunity cost occurs when organisations decide on one path over a potentially more lucrative one or fail to acquire a business, hire a high-achieving individual or resource the business appropriately.

The potential within treasury to deliver costs savings and improvements came up in conversation again and again at the conference. So the cost of failing to invest in a streamlined approach to FX, for instance, is not generally visible because it tends to be hidden across the supply chain and not collated in financial reports prominently.

Add to that the fact that treasury departments are often an underestimated part of a business and the fact that they are under-resourced may only come to light if something goes wrong. It is sometimes the payments made to the wrong beneficiary – or a risk not covered – that will give treasury visibility.

5. When in Liverpool

An unmissable treat and central to the Liverpool ACT Conference experience is the social highlight that takes place at the end of day one. More than 800 guests piled into coaches for the short ride to Liverpool Cathedral, the fifth-biggest cathedral in the world, where they were greeted by Great George, a four-tonne tenor bell.

The entertainment didn’t end there, with a stirring recital of Widor’s ‘Toccata’ played by Professor Ian Tracey and equally inspiring vocal performances from the Gospel Touch Choir led by Sam Adebanjo.

Book your place at the ACT Annual Conference 2019 here.

About the author

Liz Loxton is editor of The Treasurer.

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