Managing Risk and Supporting Growth in the E-commerce Era
At a Glance • As e-commerce growth becomes core to an increasing number of companies, treasury has a vital role to play in supporting these new business models. • Treasury has considerable experience relevant to the launch of e-commerce sales channels. However, treasury is often involved late in the process, leaving it to retroactively understand and optimise arrangements put in place by the business. • Treasury should proactively engage with the business on its e-commerce strategy — treasury can act as a key advisor to business partners to help build the financial structures that will facilitate long term growth right from the start and to manage financial risks that may impede growth. • Ensuring an understanding of treasury’s perspective within the business is critical — and vice versa. Treasury organisations should appoint digital leads to work closely with the business to execute their e-commerce strategy. • For companies with historically B2B distribution models, a shift to Direct to Consumer (D2C) e-commerce results in a significant change in the collection profile – such as the need to cater to consumer payment preferences and a miniaturisation of payments to high volumes of low value transactions. • Treasury must set up appropriate cash management structures to accommodate new D2C collection profiles, including appropriate settlement, reconciliation and working capital models.