4 Tips for Treasurers to Reduce Risk and Add Value with Global Treasury Management

September 30, 2021

In today’s fast-paced global economy, treasurers whose companies make global payouts enhance the value delivered to their enterprise when they merge their traditional role of managing risk and providing liquidity with executing strategic vision and enabling competitive advantages.

Providing competitive advantage can be accomplished through implementing strategic payout processes and technology. The PayQuicker global payout platform can help treasurers of international businesses achieve both.

In this article, Joe Bertalli, PayQuicker Chief Financial Officer & Treasurer, shares four tips on how treasurers can add value and reduce risk with improved global treasury management for global payouts:

  1. Manage globalization
  2. Mitigate risk
  3. Enhance cash flow and liquidity
  4. Reduce cost

1. Manage Globalization

As the trend of business globalization continues, treasury is an increasingly international operation. Implementing a global treasury system is an important initiative for international businesses to ensure operational proficiency and compliance with local practices and regulations. Treasury rules and regulations vary between countries and can be a complicated area to navigate.

It is essential for companies that are expanding globally to recognize that business practices can differ in local markets. The complexities of treasury are magnified as companies expand into emerging markets or multiple markets simultaneously. Businesses can structure their governance systems to recognize these global differences and strengthen their responsiveness to local requirements. This can often be a headache for CFOs and treasurers, especially in emerging markets where governance is often weak or nonexistent. It is critically important to select partners and service providers that understand local markets and effectively respond to varying practices and regulations to lift the burden off internal finance teams.

Globalization Summary

  • Recognize business practices can differ in local markets
  • Rules and regulations can differ across countries
  • Structure governance systems to recognize these differences and strengthen responsiveness
  • Choose a partner that understands these differences

2. Mitigate Risks

With global growth comes the onset of more complex treasury activities and corresponding risk. There are three very important risk areas for treasurers to consider to lower their company’s risk profile including:

  • Foreign exchange
  • Money laundering
  • Taxation
  • Data and information security

Foreign exchange risk: Companies can reduce foreign exchange (FX) risk and manage working capital more effectively by matching local currency revenues with payouts in the same local currency. There is a strategic benefit for global businesses to match local currency revenues as most payees prefer to be paid in local currency to avoid the burden of FX fees that they would have to bear if they are paid in US dollars. By conducting payouts in local currency, global businesses can gain a competitive advantage while reducing foreign exchange risk.  

Money laundering risk: Anti-laundering regulations across regions must be met to reduce risk and to ensure smooth and timely execution of payments and transfers. Treasury departments of global enterprises are tasked with the crucial responsibility of eliminating the risk of fraud and asset mismanagement.

Taxation: Tax is a complex, yet integral, subject for businesses that is dependent on many factors unique to each company. Treasurers of US entities must strategically manage their foreign profits and repatriation of those profits to ensure the most tax efficient structure. This can be a complicated task for treasury teams.  Consultation with a tax professional is essential to formulating and executing any tax strategy.

Data and information security risk: The threat of cyberattacks continues to grow and treasury is a prime target for hackers and fraudsters. Corporate treasurers need to ensure their financial data, and that of their payees, is protected and secure.

3. Manage Cash Flow and Liquidity

Ensuring cash is in the right place, at the right time, in the right currency is an omnipresent never-ending key focus for treasurers. Corporate treasurers safeguard cash flow and make sure funds are circulating around the business smoothly. Effective global treasury management ensures the financial health of the company by optimizing liquidity and carefully managing relationships with banking partners, ensuring cash is available and payments are made and received on time.

Streamlining global payment processing is an important part of managing and optimizing cash flow. It minimizes costs associated with the complexity of supporting numerous countries and currencies, increases the speed and efficiency of payouts, and consolidates corporate global treasury reporting. In the rapidly evolving world of payments, global enterprises are able to track real-time payment data and instantly respond to their liquidity position.

4. Reduce Costs

We live in a world of constraints and achieving global treasury goals on, or under budget, is part of the treasurer’s daily charge. The following is a list of benefits that PayQuicker offers with its global treasury management solution that helps treasurers achieve payment processing goals:

  • Consolidate payments with a global payout provider
  • Reduce cost of ACH/EFT payments and paper checks
  • Reduce rework of correcting failed ACH/EFT transfers
  • Avoid security risks by eliminating burden of storing personal banking information
  • Eliminate FX fees with local currency payout options
  • Redeploy resources to value added activities

In today’s fast-paced global economy, treasurers are critical leaders who deliver tremendous value to companies. This value is enhanced when treasurers merge their traditional role of managing risk and providing liquidity with executing strategic vision and providing competitive advantages.

Providing competitive advantage can be accomplished through implementing strategic payout processes and technology. Treasurers have the vision and, with the right global payout platform that provides valuable tools, global businesses can effectively manage payouts to countries across the world with local currencies to gain a competitive advantage. Schedule a free demo to learn more about the PayQuicker global treasury management solution.

Joe Bertalli, Chief Financial Officer

Joe Bertalli

Chief Financial Officer & Treasurer

About PayQuicker

PayQuicker is a leading provider of financial transaction and treasury management technology and innovation for a wide range of industries requiring mass payouts to their participants. Our cloud-based and regulatory-compliant BaaS software stack offers custom-branded global treasury solutions that power clients to seamlessly deliver secure, instant payouts and digital wallets to millions of consumers, independent contractors, distributors, influencers, and affiliates around the globe.