Globalization: Should you centralize your treasury organization?

Is your company’s global strategy causing you to rethink how your treasury is organized? What can you do to handle immediate impacts and prepare for future challenges? With the effects of globalization impacting treasury, many treasurers are looking to balance current needs while preparing for global growth. One of the important decisions that you may need to make is whether or not to centralize control of your treasury activities.
Centralizing control of treasury activities offers you the ability to achieve increased efficiency and, greater transparency across a broad geography and across many entities.  However, the tradeoff may be that you receive less local treasury knowledge and a feeling of decreased responsiveness to the needs of your local affiliates.

The decision about how to organize your treasury organization is not an easy one. There are many factors that will impact your decision to centralize, decentralize by business or region, or create a hybrid of the two. Depending on your needs and the locations of your business activities you may want one treasury location or an operation with several locations in different regions that can operate ‘around the clock’ to access information. You may want to first centralize the management of foreign exchange and interest rate risk, and then add cash management.

If you are expanding globally, you may want to consider how a single-version SaaS Treasury and Risk Management solution can help you standardize processes to centrally manage your treasury organization. Some of the benefits of this approach are:

  • Increased collaboration with subsidiaries
  • Improved workflow and controls across multiple locations
  • Global bank connectivity
  • Global visibility into cash positions and exposures
  • Increased accuracy of cash forecasts
  • Global support for audits and associated reporting
  • Scalability to accommodate continued growth

As you are continually challenged to demonstrate how treasury adds value to the business, an all-in-one SaaS TRM can help you gain the global insight you need to make strategic business decisions and lower costs. For more information about the impacts of globalization on your treasury organization listen to a recent Reval webinar: Impacts of Globalization on Your Treasury Operations.