Citi Perspectives Fall 2023: Transforming Treasury

Christine McWilliams NAMHead, Energy, Commodities, Chemicals and Power Solution Sales, Citi Treasury and Trade Solutions 34 | Treasury and Trade Solutions Citi Perspectives Many organizations still utilize legacy processes that rely on a combination of spreadsheets supplemented by enterprise resource planning (ERP) tools. As a result, clients have been reevaluating cash centralization and pooling structures to increase cash transparency. Citi offers automated inter-company lending and currency conversion in 144 currencies across more than 90 countries — critical to the energy and chemical sectors which operate as global businesses with in-country presence in multiple jurisdictions. Citi’s cross-currency sweeps and target balancing automatically concentrate cash helping provide clients with a global view of balances. Increasing Efficiency with Virtual Cards: Conversations around virtual cards have increased dramatically over the past several months as clients explore this option for B2B payments. Virtual cards can be useful tools that help to reduce errors in reconciliations, improve cash management, and allow for embedded controls to help ensure appropriate payment amounts and decrease the likelihood of fraud. Programs can be set according to internal compliance programs to allow for more transactions to flow with easier oversight. Digitalizing as an Imperative: Many treasury organizations have achieved greater efficiency through digitalization, upgrading and consolidating ERP systems and implementing the latest technologies such as application program interface (API) connectivity to take advantage of new digital treasury solutions. Digitalization makes a full range of automation possible. For instance, increased digitalization allows treasurers to have vital cash flow information sent to them on a proactive basis instead of relying on emails and spreadsheets collected from various legal entities. As treasurers need real-time visibility into their accounts to knowwhere their cash is located throughout the organization, conveniently at their fingertips, Citi has deployed additional technologies such as biometrics, a digital authenticationmethod that utilizes a user’s unique physical traits via the user’s mobile device; “widgets” as a quick and convenient way to access services needed for day-to-day treasury and trade activities such as to “initiate, view, authorize and release” payments; and both instant payments and 24/7 are rising in importance in the B2B arena. Lastly, scale and resilience of infrastructure continues to be an imperative. Key takeaway: A well-stocked toolbox provides essential optionality Treasurers today need to aim for a full complement of liquidity and cash management tools to deploy as needed in order to genuinely partner with the business. For those who have been focused on ERP migrations or mergers/acquisitions, it is never too late to add these tools to your arsenal. For many, this involves employing best practices around liquidity and working capital in ways that leverage recent ERP upgrades to the fullest extent possible, including digital capabilities as well as solutions that connect seamlessly to your ERP system. The current macro environment as well as the drive to enter newmarkets and businesses underscores the need to ensure that the right structures for liquidity are in place and that organizations are as efficient as possible. We expect working capital management and accelerating cash conversion cycles will continue to be ongoing themes throughout the remainder of 2023 and into 2024.