Insight to All Things Currency and Treasury Management

In the weeks since the British voted to leave the European Union, sending global markets into chaos and the pound plummeting to its lowest level in 35 years, it has been equally chaotic within a number of corporate finance departments. Many treasurers are scrambling to respond to questions from their CFOs about unexpected currency headwinds. (Meanwhile, the CFOs are scrambling to respond to questions from their CEOs, boards, shareholders, and analysts about what Brexit means for the company.)

But chaos is not the case for every corporate. In fact, post-Brexit, a CFO client of ours mentioned that his board was initially frazzled, apprehensive and anxious for answers. They wanted to know exactly how the crisis effected/would effect the company moving forward. After our client pulled 4 reports via FiREapps analytics and delivered them to his board in half an hour, “the mood shifted to a calm.”

The fact is, Brexit has made it very clear who is prepared and who is not. And as the Q2 earnings season ramps up, it will become even more obvious who is currency aware (and has the answers that CEOs, boards, investors, and analysts are looking for) and who is not.

Not having quick access to data could mean huge loss.

For the companies that aren’t currency aware today, the result could be a loss of millions. After all, getting the data you need to make strategic decisions shouldn’t be a days-long process— something some corporates have learned the hard way post-crisis. Regardless of where you are in the world, the time of day or the data sources you’re using, you should be able to pull analytics on currency, risk and trends instantaneously—helping you avoid monetary hits and unexplained FX gain/loss while enabling strategic decisions.

For those that are crisis-ready, this is accomplished through the use of cloud-based corporate currency analytics, like FiREapps, to ensure a comprehensive view of exposure and risks.

So, as a Treasurer, how can you join the camp of the “data haves?” How can you start a conversation with your CFO about implementing a corporate currency solution to be ready for the next inevitable crisis?

1.  Detail the short-term/long-term problem

While during a crisis your CFO may know that there’s issues with pulling the data they need to report to the board, investors, etc., they may not know the extent of the problems you’re facing. Explain exactly where your pain-points are and why this has the potential to become an even larger, long-term problem that can effect the finances of the business as a whole.

Brexit isn’t the first currency crisis and undoubtedly, will not be the last. But especially in times of unforeseen crisis, some very specific impediments become obvious. Among them, Treasurers often see concrete proof that they don’t have the technology or resources to become truly aware— that is, to understand exposures with 100% visibility, easily see impacts, and have the tools to successfully help the CFO protect the company in the long-run.

2.  Explain that Solutions Exist

Some CFOs may understand that there’s existing technology that can help to impact the aforementioned issues in an efficient way. But others may not have a deep understanding of what technology and automation can truly offer. Be ready to discuss what you’ve learned after seeing a full demo, any hands-on experience you’ve had with the application and be prepared to champion what a truly comprehensive solution can do for you— namely, never being caught in a position where you could potentially lose huge amounts of money and be forced into a purely reactive state again.

3.  Explain the Long-Term Benefits

Yes, implementing corporate currency analytics can help you navigate through crisis with ease and efficiency. But the long-term benefits, even far after the crisis has dissipated, are just as important. Remember, utilizing technology can help to benefit other teams in your organization, strengthen governance and compliance efforts, provide better controls, and build on Finance/Treasury’s position as strong partners of the business.

There’s a saying about not wasting a good crisis, and here it absolutely rings true. Brexit makes an incredibly strong business case for implementing a solution that will protect the company against crises, surprises and will help solidify a long-term strategy.

The time to put yourself in the “data haves” box, protecting your business from the next “Brexit,” is definitely now.