On Friday 29 March 2019, the UK will formally leave the European Union (EU). Although a transition period should apply from that date until Thursday 31 December 2020, it is not yet clear what the UK’s relationship with the EU will look like after that, especially as a trade deal between the two has not been agreed. The uncertainty is causing concern for UK corporates who are forecasting hypothetical scenarios. In fact, it is possible that there will be no transition period at all, if a withdrawal agreement has not been signed by the date of the UK’s departure.
Greg Person's blog
Greg Person, vice president, global presales
Greg has 15+ years experience as a finance and treasury practitioner. He has worked both for in-house teams (including Microsoft, EMC Corporation and Boston Scientific), as well as treasury technology vendors, so has seen both sides of the coin.
Just like all native New Englanders, Greg is an avid Red Sox and Pats fan, but he tends to keep this quiet when in Kyriba's New York office.
While this is a prosperous period for the world economy, the recent volatility in the stock markets globally is an indicator of changing times. The World Bank has forecast growth of 3.1% for 2018, which will benefit businesses, but at the same time a healthier trading environment brings with it the prospect of wage inflation, interest rate rises and the end of cheap money. As we saw from the dramatic reaction to figures that showed US wages were rising faster than expected, the markets are jittery about the end of loose monetary policy.
CFOs today are under more pressure than ever before from their board of directors and CEO to unlock trapped cash. Unfortunately, regional operations hold unnecessary cash buffers to protect their balance sheet. This cash-hoarding culture is detrimental to free cash flow, and could eliminate the opportunity to execute the corporate capital allocation strategy, including share repurchase targets, corporate debt repayments, shareholder dividends, and M&A initiatives.
CFOs today depend on the strategic function of treasurers than in previous years. One reason why treasurers’ role has become more aligned to the CFO’s agenda is a direct result of the treasurer’s ability to unlock value within the organization at a low cost, and drive strategic objectives of the CFO, such as offering a more comprehensive view of cash and payments, acquisition strategies and capital allocation strategies.
Innovative treasurers are constantly seeking new ways to improve operations and streamline workflows. One of the most effective solutions, multilateral netting (MLN), is an ageless classic that can add real economic value. Surprisingly, many global organizations who manage multiple currencies have yet to adopt this proven treasury workflow solution.