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Recent Articles
AFP Exchange (September 2008)
Rethinking Foreign Exchange Risk - Another Perspective
Stories of Derivative Losses Often Ignore FX Exposure(PDF)
"While the weak dollar has buffered multinationals from FX losses, it is worth asking how much the gains were expected.'
The Economist (September 2008)
The outlook is deteriorating even for the best-performing firms, let alone the troubled ones.
AFP Risk Newsletter (September 2008)
FiRE, Ready, Aim - Sorting Through the Steps to Targeting FX Risk(PDF)
"For companies new to foreign exchange exposure management, the task often seems overwhelming. Many times, the urgency to act gets mired down in indecisions and "analysis paralysis." Time and again, I've found that by simply breaking the process into simple steps, beginning with an understanding of what business transactions create exposures and an accurate assessment of the magnitude of those exposures, companies can overcome the inertia that keeps them from tackling the bottom line impact of FX. These steps can yield results in weeks rather than months.'
Weigh in on Top Treasury Challenges and Get a Chance to Win an iPod Nano! (September 2008)
Click Here to Complete the Survey
Many companies are faced with competing priorities and challenges as they strive to insulate balance sheets and forecasted cash flows from foreign exchange volatility. FIREapps would like to ask for your input for a benchmark study on these issues.
This survey will help uncover the common business challenges facing corporations today around the topic of FX risk. This brief survey will take just a few minutes to complete, and in appreciation of your time, you’ll receive the results of the study, along with an invitation for a free webinar on the topic.
Treasury and Risk (August 2008)
Hedging on FAS 133 Takes Fair-Value Turn (PDF)
"FAS 133 on derivatives and hedging might be the regulation that everyone loves to hate, but after 10 years and multiple revisions, many companies have gotten used to it as the devil they know. "The trend in our market is that companies are becoming more comfortable with FAS 133," says Wolfgang Koester, CEO of Rim-Tec Inc., a provider of foreign exchange exposure technologies. So, not surprisingly, FASB's latest fair value accounting proposale for hedges is garnering mixed reviews. The revision would simplify accounting for some - but by no means all - hedges and expand disclosures in financial statements.
AFP Exchange (July 2008)
Where Others See Risk, Corporate Treasurers Must See Opportunity (PDF)
"The treasury function, as it has been understood since the 1970's, has largely focused on making sure that business has adequate liquidity to meet its obligations, while managing payments, receipts and financial risks (in that order). In today's international business climate, with financial market volatility at an all-time high and access to credit and capital markets at record lows, managing risk and maximizing its yield on investments has taken on a whole new priority within U.S. corporations. For treasurers who are unprepared to take on the challenges that today's global market and historic volatility present, the good old days are gone. The majority of treasurers I talk to, on the other hand, who are willing to step out of their comfort zones and go beyond their traditionally siloed role, tell me that NOW is their moment to shine and to demonstrate value to their organizations. With enterprise risk emerging as the top priority for corporate board members and senior executives charting course in increasingly turbulent international waters, the treasurer's role in quantifying and mitigating financial exposures is taking center stage."
AFP Risk Newsletter (July 2008)
Knowing When to Build the Case for Change (PDF)
"Last month, I discussed how treasurers can prepare to make a solid business case for improving FX exposure management processes by demonstrating economic, compliance and business process improvements with a clear ROI to the organization. But sometimes, demonstrating a good reason why isn’t enough. As the saying goes, timing is everything, and when to implement a program to assess and improve your foreign exchange exposure management processes may depend heavily on competing priorities within your department and within the organization."
e-Forex (July 2008)
Is Your FX Data Relationship Going Sour?(PDF)
Corey Edens, CFO/COO of FiREapps, looks at how new technologies and methodologies transform data into reliable FX information to protect corporate value.
AFP Risk Newsletter (June 2008)
Making the Case for Change: Protecting Corporate Value from FX Risk (PDF)
"This month, we will look at how treasurers can prepare to make a solid business case for improving FX exposure management processes in way that tackles the status quo head on by demonstrating economic, compliance and business process improvements with a clear ROI to the organization."
Treasury and Risk (June 2008)
ERP Time Bombs(PDF)
While most corporate treasuries focus their efforts and resources on FAS 133 compliance, the most difficult accounting challenge they face is FAS 52, accounting for foreign currency revenues and expenses. Treasuries may not like FAS 133, but they do closely control the FAS 133 debits and credits. Not so for FAS 52, which is bound to be a much bigger issue when the dollar turns the corner and appreciates.
GT News (June 2008)
Non-Standard FX Operating Procedures(PDF)
This article provides an understanding of how FX issues related to people, processes and
systems can pose a threat to your enterprise.
BobsGuide.com (May 2008)
New FX Exposure Management System Improves ERP FX Data Integrity
FiREapps, the leading provider of foreign currency exposure management software, announced today that it has released a new software suite that helps multinational companies identify and resolve foreign exchange data integrity issues within existing ERP and G/L systems. With FiREapps Enterprise, treasurers, controllers and CFOs can now have confidence that the data they use to identify, quantify and manage FX exposures is accurate, complete and compliant.
Financial Executive (May 2008)
Managing FX Risk from the Bottom Up
When it comes to foreign currency exposure management, its the foundation thats all too often overlooked. That foundation comes from source transaction data for foreign currency business transactions maintained by the finance organization in the enterprise resource planning (ERP)/accounting systems. The assumption that this data is accurate and reliable is the leap of faith that treasurers must make as they build a strategy to withstand the winds of change that threaten the value of their firm. As experience has shown us time and again, treasurers need to look before they leap.
GT News (May 2008)
Five Questions Treasurers Need to Ask About Multicurrency Accounting (PDF)
This article highlights the questions that treasurers should be asking controllers about multicurrency accounting data and processes in order to take control of FX volatility.
AFP Risk Newsletter (May 2008)
FX Exposure Management: How good is good enough?
Considering today's economic climate, where market forces have grown increasingly volatile and uncertain, it's likely that companies who have failed to seriously consider how they manage foreign exchange exposure will discover the chinks in their FX armor the hard way. Foreign exchange is a large part of finance and in today's environment reacting to the foreign exchange imperitive will likely be too late and certainly puts the enterprise at significant -- possibly existential -- risk.
AFP Exchange (April 2008)
Today's software solutions often hold the key to forecasting FX risk but some treasury departments neglect the critical pre-trade activities and decisions that drive their entire foreign exchange transaction lifecycle.
AFP Risk Newsletter (April 2008)
Questions corporate board members should ask about unanticipated profits from foreign exchange.
Euromoney (March 2008, Guide to Technology Management Supplement)
Corporate treasurers are increasingly expected to understand and manage not just financial risks but risks across the whole enterprise. New software tools can help them do this.
FIREapps, a US-based software and services company, claims to have turned the art of FX exposure management into a science by focusing on the pre-trade portion of the FX exposure management value chain...It believes there are serious deficiencies in most organizations’ FX exposure management strategies, which are frequently based on inaccurate data...
Treasury and Risk (March 2008)
"One of the biggest issues CFOs face right now is data integrity as the result of expansions and acquisitions and other changes,” says Andy Gage, vice president of sales and marketing at FiREApps, a provider of on demand solutions for foreign exchange exposure analytics and management. This can be especially troubling for companies with multiple accounting systems, as well as several instances of ERP systems, that can give different readings to different users. FiREApps recently released Data FX, a new module that works alongside a dashboard to test and evaluate currency revaluations, clean multicurrency accounting data discrepancies and monitor issues as they arise. “You have to know the underlying data is good and what the weaknesses are, and that’s not something a treasurer can do in isolation.”
Corporate Board Member (March/April 2008)
Lougie Anderson. Talk about credentials. The chief technologist at software and tech-services provider Fireapps has 20-plus years in the computer industry, as well as a master’s and doctorate in computer science and dual bachelor’s degrees in physics and mathematics. She oversees product development, IT, and overall technology strategy for the company, which helps corporations minimize their foreign-exchange currency risks.
Corporate Board Member (February 2008)
Turning (Dollar) Weakness into Strength
For many multinational corporations, the recent decline of the dollar has likely meant an unanticipated increase in revenues and profits. As a corporate board member, did you nod your head with satisfaction at the words “increased revenues and profits,” and move on? Or, did you break into a cold sweat at the mere sight of the word “unanticipated” and pause to reflect for a moment? If you hesitated, you’ve already picked up on a potential problem that most corporations have overlooked. After all, no surprise is a good surprise when you are talking about accounting practices—and most U.S. multinationals today have serious issues when it comes to multi-currency accounting.
Business Finance (February 2008)
Hard Dollars: Putting the Devalued Greenback to Work
Treasurers, economists, and currency traders offer guidelines for effectively navigating the dollar's ups and downs.
Treasury & Risk (February 2008)
'FiREapps' Wolfgang Koester deciphers how the dollar's frailty and comeback potential could wreak havoc on corporate financials."
e-Forex (January 2008)
Corporate FX Exposure Management: Embracing the New Risk Paradigm
"For many multinational corporations, the recent decline of the dollar has likely meant an unanticipated increase in revenues and profits. As a member of your company’s finance organization, did you lean back in your chair and smile with satisfaction at the words “increased revenues and profits?” Or, did you break into a cold sweat at the mere sight of the word “unanticipated” and pause to reflect for a moment? If you hesitated, congratulations! You’ve already picked up on a potential problem that most corporations have overlooked. After all, no surprise is a good surprise when you are talking about accounting practices—and most U.S. multinationals today have serious issues when it comes to multi-currency accounting and foreign exchange exposure management."
SMB Finance (Dec/Jan 2008)
FX Special: As SMBs Go Global, Managing Currency Risk Vaults to the Top of the "To-Do" List
...as more companies compete across borders, they also become exposed to foreign currency exchange risks....Whatever side of the import-export equation your business is on, experts say, now is a good time for companies to reassess foreign currency risks and to renew strategies for managing them effectively."
CFO (Dec 2007)
"In the second quarter of this year, Weatherford International Ltd., a $4.3 billion provider of oil and gas drilling equipment and services, sustained nearly $9.9 million in foreign-currency losses. In the very next quarter, its foreign-currency losses shrank by almost 90 percent, to just $1.5 million. That's good news for a company that is keen to, as senior vice president of finance and CFO Andrew Becnel says, "remove the noise of foreign-exchange fluctuations from the income statement."
...While currency options and currency forwards are useful tools for hedging (see "Opting for Options" at the end of this article), the true challenge lies not so much in deciding how to hedge as in deciding how much. Determining exposure can be a time-consuming and frustrating exercise because companies often funnel data from various departments, such as treasury, tax, forecasting, and the controller's office to a foreign-exchange (FX) specialist, who then tries to aggregate those pieces into an accurate whole. "To make sure you're hedging the right number," says Beau Damon, managing director of capital markets for Microsoft Corp., "you have to get input from the accounting group, the business units, and the folks who are forecasting and planning revenues." Because most companies rely on manual processes, that level of collaboration is difficult to achieve."
GT News (Oct 2007)
"Today, most multinational corporations struggle with foreign exchange exposure management processes that are cumbersome, manually-driven and error-prone. Despite adopting all kinds of sophisticated software tools, such as ERP systems, multi-currency general ledger systems and advanced consolidation and reporting tools, the majority of multinational companies still struggle with this key question: what is the foreign exchange exposure to our balance sheet and cash flow forecasts and how can we protect our margins, our revenues and the value of our firm from unanticipated foreign exchange volatility?"
Treasury and Risk
"Here are instances in which treasury and finance are helping to reinforce vendor innovation and the evolutionary conversion of the profession from a manual art to a scientific rigor—a concept at the basis of many of the increasingly sophisticated tools in the risk management space, including this month’s featured foreign exchange management solution from FiREapps."
Treasury and Risk (September 2007)
"Google Inc.’s Treasurer Brent Callinicos thinks he may have found a “nice piece of the financial risk management puzzle” that he has been seeking for years: A tool with which weary treasurers can project and update their potential FX and hedging exposure."
CFO Magazine
Survey Says Fix It
'In a survey of more than 100 U.S.-based multinational corporations, FIREapps found that fully 98 percent had significant errors in their Fx spreadsheets, errors that ran the gamut from missing entities and income to incomplete calculations."
WebCPA
A Small World
IT Compliance Institute
Top Ten Spreadsheet Compliance Risks and How to Avoid Them
One of the biggest threats to compliance isn’t rogue insiders or hackers, but a trusted tool: the lowly spreadsheet. Its life is unstructured, untracked, and unsecured—control challenges that can run afoul of everything from SOX to federal accounting rules. Learn to recognize top spreadsheet risks and what you can do to reduce them.
OpRisk & Compliance
FX Risk Concerns Highlighted by the BIS and FiREapps
A report from the Bank for International Settlements (BIS) has recommended financial institutions reduce and control large and long-lasting foreign currency exposures.
TMI
Foreign Exchange: From Risk to Advantage
Through the implementation of a holistic foreign exchange management process, combined with the automation, analytics and decision support capabilities of FiREapps, JDA was able to realize substantive benefits.
Global Finance
Global Financing Focus: Foreign Exchange
Currency risk increases as companies do more of their business outside of their home country. It is the risk that an unfavorable change in the value of a currency will result in an unpredictable decrease in earnings, cash flow or value. More and more companies are creating formal risk-management policies to control their foreign exchange risk, but they still have a long way to go.
Treasury & Risk Management Magazine
Smooth Forex Sailing
A software-as-a-service update now makes it easier to manage foreign exchange exposure and maintain better practices.
Wall Street and Technology
Does Your Firm Own Too Many Yen?
Are you exposed to too much foreign exchange risk? Most companies don’t know the answer to this question.
Financial Week
When EADS, the Amsterdam-based parent of airplane manufacturer Airbus, reported disappointing fourth-quarter financials last month, the biggest factor cited by the company was production problems with its new super-jumbo A380 jet. But that wasn’t its only problem.
gtNews.com
Achieving FX Exposure Management Best Practices
To get started on the road to foreign exchange best practices, you must begin with a well-reasoned strategy for building the case for change. This article looks at how to achieve this within your organization's FX management structure.
Treasury & Risk Management Magazine
Too much of anything is never a good thing, even when it comes to information. As corporate dashboards get ever more sophisticated, executives are wrestling with when to cut back on the data feed.
Treasury & Risk Management Magazine
Knowing When to Call in the Big Guns
For some treasuries, it may take a large, unhedged loss they never want to experience again; for others, it might be a drive to better control the costs of hedge contracts or a need to centralize a global currency program. Whatever the reason, even companies with years of experience get to a point where their knowledge of instruments, access to market information or basic strategic approach to financial risks could use a technological boost.
Reuters
Some Corporates Need to Look Beyond Complex FX Hedges
To hedge, or not to hedge: that is not necessarily the question
when it comes to the ways multinational companies can manage their currency exposure.
CFO Magazine
"To make sure you're hedging the right number," says Beau Damon, managing director of capital markets for Microsoft Corp., "you have to get input from the accounting group, the business units, and the folks who are forecasting and planning revenues." Because most companies rely on manual processes, that level of collaboration is difficult to achieve.
Manufacturing Business Technology
"Most manufacturers have a vague understanding of foreign exchange risk, but they aren't sure what to do about it," says Wolfgang Koester, CEO and cofounder of the one-year-old FiREapps. "They use spreadsheets to address exposure, but while some applications might find underlying exposure, they might miss the fact that the company is over-hedged, and they won't discover that until budget time."
Treasury & Risk Management Magazine
Keeping Tabs On Risk
For most companies, the problems with foreign exchange hedging can be summed up with two facts: It is time-consuming and costly. But technology is coming to the rescue with at least one new product that may take pain out of financial risk management.
Business Finance Magazine
Currency Risk: To Hedge or Not to Hedge
Between 1994 and 2004, the value of products imported into North America more than doubled, rising from $928 billion to about $2 trillion. During the same period, product exports also grew dramatically, jumping from $739 billion to $1.324 trillion, according to the World Trade Organization. As the volume of cross-border transactions has skyrocketed, however, many North American companies have failed to adopt policies for hedging their exposure to fluctuating foreign exchange (fx) rates.
