Citi Perspectives Fall 2023: Transforming Treasury

The pandemic and supply chain disruptions put a premium on managing resources and liquidity effectively. | 33 Industry spotlight: Energy and chemical sectors managing treasury in uncertain times These factors have tested treasury organizations especially when it comes to managing liquidity and the cash conversion cycle to meet the needs of the business. Many are tackling these challenges with fewer treasury resources as attrition, cautious hiring practices, and even a lack of available talent have increased the imperative for an efficient and impactful treasury organization more than ever before. Doubling down on liquidity management and working capital Conversations with clients across the energy and chemicals industries have underscored where they are focused to positively impact their business goals. We’ve heard a number of key themes frequently from treasurers thus far in 2023, including: Putting Accounts Receivables toWork: With a potential recession on the minds of many in 2023, coupled with increasing interest rates making some traditional financing more expensive, treasury teams have been investigating the benefits of accounts receivable portfolio structures. Through these structures, clients hope to leverage the value of receivables to generate optional liquidity and possibly mitigate counterparty credit risk. Citi has found that clients appreciate flexible structuring that still meets “true sale” requirements along with a fully digitalized approach which makes administration a light touch. Managing Operational Balances: Another key focus has been maximizing visibility and yield on operational balances.