Daring to be different – a new role for treasury

June 5, 2014 Matthew Stammers


I’ve just returned from spending a fascinating day with corporate treasurers from some of Europe’s largest companies at Eurofinance’s Effective Supply Chain Finance Summit in Amsterdam. Listening to the people who safeguard the cash of these companies has been deeply interesting and has given me considerable food for thought.

Treasurers are divided into two camps

One of my key observations from the day is that treasurers seem broadly divided into two camps:

1. Those who stick with traditions and old-fashioned ways of thinking (for example, by extending days payable outstanding - holding onto cash for as long as possible)

2. Those who are starting to think outside to box to come up with new, innovative approaches to strengthening cash positions

Pitching your tent in the garden

For the first group of these treasures who simply want to enhance their cash position by extending their days payable (DPO), the payment extension can be balanced by a plethora of well-established supply chain programmes from some of the world’s top banks, many of whom attended the summit.

These work very well for your top 50 to 100 largest suppliers, including the likes of Intel and Dell that supply a buying organisation. These programmes deliver the sought after cash injection into the supplier’s balance sheet by paying the early in exchange for a discount, while the buying organisation pays later directly to the bank. These programmes serve a purpose, but they are fundamentally a balance sheet exercise for the buying organisation and have no impact on actually strengthening your supply chain - it’s the long-tail of your suppliers that really need access to cash.

These treasurers are stepping outside the treasury walls to some extent as they need to talk to Procurement to make these programmes a reality, but essentially they are still in the garden grounds.

Exploring the great outdoors

The second group of treasurers in my view is far more interesting. These treasurers are thinking differently by:

  • Looking towards a more collaborative approach
  • Employing funds to invest in their supply chain- strengthening both their cash positions, and the cash positions of their suppliers
  • Building working capital to redistribute for broader company goals

These are the treasurers that are daring to be different. These are the treasurers who recognise that their role can be one where they not only safeguard their cash, but also use it to invest in their supply chain, improving its vitality through the injection of cash and ultimately driving the competitiveness of the business.

These businesses understand that everyone in the company has a role in directly creating value and ensuring all parts are working together for the common good. I have written a number of blogs on treasury and supplier financing that clearly show the benefits to be gained from both parties by investing in your supply chain. And if you are still in any doubt, take a look at some of what our customers have achieved.

Hiking with a friend

At Taulia, we deeply believe in and support both types of treasurers, but particularly the second type. If buyers and suppliers work better together to help cash flow more freely, we’ll create a better economy for all of us.

We understand it can a little daunting when you are setting out to explore the wilderness alone, but don’t worry, we have already guided more than 50 of the world’s largest and most innovative organisations on their exploration. Like us, they had a vision to change the way they worked with their supply chain for the betterment of both.

Our call to treasurers - ‘dare to be different’

So here’s our call out to companies and specifically, treasurers: Pack your rucksack, get your hiking boots on and get ready for the adventure of building a stronger company.

And if you think you need a little help or support, contact us. Whether you ultimately choose to work with us or not, just deciding to put on your hiking boots and take the first step is a great start in our books!

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