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15th Annual State of the Treasury Profession

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s the U.S. cautiously starts to emerge from the COVID-19 pandemic, corporate treasurers are preparing for a post-pandemic business climate. Many have successfully navigated the challenges of the past year by adopting new policies, accelerating technology adoption and keeping close tabs on liquidity. Now, they are taking those lessons and trying to build upon them.

Treasury Strategies, a division of Novantas, is pleased to present the 15th Annual State of the Treasury Profession, which takes the pulse of treasurers across a broad swath of U.S. companies. This report includes results from the survey conducted earlier this year and insights from more than 30 in-depth interviews with corporate treasurers. This report also includes actual responses from the executives whom we interviewed.

For more information on this survey, please contact Jeff Diorio (jeff_diorio@treasurystrategies.com) and Paul LaRock (paul_larock@treasurystrategies.com).

While we all hope that the worst of the pandemic is behind us, treasurers are still impacted by a slew of issues that affect their operations, liquidity and funding.

Economic impact of pandemic

Workforce impact of pandemic

Federal/state government actions

Low interest rates and inflation

New financial technologies

Cybersecurity threats

Post-Brexit regulatory uncertainty

LIBOR replacement

Priorities
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he importance of cash forecasting couldn’t be underestimated during the pandemic’s darkest days and it remains the top priority for corporate treasurers. Some have invested in automation tools that incorporate machine learning for better accuracy and are continuing to adopt new processes. That said, there may be less urgency for the daily cash forecasting that was so crucial in the beginning of the pandemic.

What the Treasurers Said:

We were never worried about banks. They were flush with cash.

– Insurance Company

What the Treasurers Said:

Now there is a better appreciation for automation for better efficiency and control.

– Hospital System

Liquidity and working capital management moved up in order of importance in the survey even as funding remains plentiful and interest rates are low.

Liquidity and working capital management moved up in order of importance in the survey even as funding remains plentiful and interest rates are low.

What the Treasurers Said:

Now there is a better appreciation for automation for better efficiency and control.

– Hospital System

The need to enhance fraud and cybersecurity controls catapulted to the fifth spot for priorities, up from the 10th position in 2020. In some cases, there is growing concern that employees who are working from home may more easily fall victim to cyber attacks than if they were in an office environment.

What the Treasurers Said:

Job one is keeping the team happy and motivated.

– Food Company

Rank 2021 Rank 2020 Rank 2019
Cash forecasting improvements 1 1 2
Liquidity or working capital management 2 4 1
Bank services optimization or RFP 3 3 4
Optimization or replacement of TMS 4 11 9
Enhance fraud/cybersecurity controls 5 10 8
Next in line were:
Support for acquisition/divestiture, LIBOR replacement, debt issuance, improvements of payment process

Source: 2021 State of the Treasury Profession Survey

Next in line were:
Support for acquisition/divestiture, LIBOR replacement, debt issuance, improvements of payment process

Source: 2021 State of the Treasury Profession Survey

Survey Question:

What is on your projects list in 2021?

Highest Urgency
  • Debt issuance, credit lines and balance sheet optimization
  • Technology – efficiency and control
  • Technology implementation/optimization (upgrades)
  • Operational procedures, policy and governance improvements
  • Payment process automation and risk mitigation
  • Bank structure/services/account optimization
  • Forecasting
  • LIBOR replacement
DOWN THE ROAD
  • Cash and working capital optimization
  • TMS selection/replacement
  • M&A integrations/corporate actions
  • Human capital management
  • Card project to reduce fees
  • New payment/receivable vehicles
ADAPTING TO A NEW WORLD
ADAPTING TO
A NEW WORLD
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reasurers moved quickly in the early days of the pandemic to keep the trains running. Many of these changes – from remote work to automated payments – are here for good.

What the Treasurers Said:

Survey Question:

What changes did you put in place? Which do you think were permanent and which were temporary?

Permanent
  • Elimination of paper
    DocuSign and migration away from wet signatures Improved banking change process
  • More complete automation of treasury
  • Remote work – technology
  • Remote work – people (HR impacts)
  • Forecasting
Temporary
  • Dramatic increase in short-term borrowing focus on liquidity
  • Transition back from 100% remote work – what does hybrid look like?
opportunities
opportunities
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reasurers expressed enthusiasm about the opportunities that await the treasury and finance functions, including favorable interest rates and new technologies that will improve efficiency.

What the Treasurers Said:

Survey Question:

What do you see as opportunities in 2021?

Top Responses
  • Low borrowing costs – borrow now if you can
  • Process optimization
  • Optimizing existing technology to enhance automation
  • New technologies for better data driven decisions and self service
  • Payment optimization and elimination of paper
Tier 2 Responses
  • Cash conversion cycle improvements
  • Liquidity optimization
  • Bank rationalization
  • Team and staffing
  • Non-bank payments (Venmo, MC Send, Zelle, PayPal)
  • Forecasting
RISKS
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hile there is certainly optimism in the air, treasurers remain worried about assorted risks that could arise. Many are still grappling with LIBOR’s replacement, there are growing fears of inflation and fraud/cybersecurity issues are an even greater risk. And while a remote workforce can create opportunities, there is also real concern about the impact that a decentralized workforce can have on team development, advancement and corporate culture.

What the Treasurers Said:

Survey Question:

What do you see as risks in 2021?

Primary Risks
  • Fraud and cyber risk
  • Human capital risk (management/HR) in COVID-19
  • Low rates impact on investments
  • Inflation – steepening of yield curve inevitable
Secondary Risks
  • Internal and external operational processes and controls
  • Volatility of all rates (FX and commodity and even IR)
  • LIBOR replacement
    Treasury systems cannot accommodate w/o upgradeBank loan restructuring