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Insight to All Things Currency and Treasury Management

Managing currency risk continues to be a challenge for multinationals, especially as treasury processes and regulations change and the organization grows.

To best mitigate FX risk, corporates are incorporating technology solutions into their programs, but the implementation of a TMS or trading platform is not enough to fully manage FX impacts to financial statements.

The Value of Currency Analytics

As mentioned in the “Leveraging Currency Analytics Solutions with a TMS” webinar that FiREapps hosted on Tuesday, a currency analytics solution is a necessary FX risk management tool that brings added value to a TMS-anchored program by reducing risk, cutting costs and limiting the impact of FX to financial statements.

More than 70 percent of FiREapps clients currently use a TMS, and while their abilities to gain visibility into cash and risk on an enterprise level are invaluable, their functionality when it comes to FX risk management are limited. Because of this, currency analytics solutions are necessary to supplement the areas of FX risk where more visibility is needed, which can be done through direct data aggregation from source systems and cleansing, and in-depth analytics.

By leveraging currency analytics with their TMS, organizations gain:

  • Access to accurate, complete and timely data to establish confidence in results
  • Enhanced FX exposure analytics and reporting to determine the most cost effective way to manage risk and to benchmark the success of their program
  • The capacity to make risk mitigating decisions with recommended hedge and exposure elimination opportunities

A TMS is only as good as the data being fed to it as it requests exposure data in its final form. FiREapps is needed to collect the underlying transaction balance data from ERPs and other source systems to make it actionable and ensure that downstream processes are facilitated with accurate, complete and timely data that allows treasury to formulate better risk mitigating decisions.

When used in conjunction with a TMS, FiREapps enables an end-to-end workflow with accurate, complete and timely data collection, comprehensive analytics and reporting, and full audit and compliance trails. The value of a TMS for risk management and hedge accounting is undeniable, but leveraging FiREapps as a supplemental FX risk management tool enables multinationals to proactively address currency exposure and manage EPS and EBITDA at risk.

To learn more about how you can leverage a currency analytics solution with your TMS, request access to the recorded webinar by emailing events@fireapps.com.