Rutherford Cross’ Director Derek Lauder shares insights from our latest virtual Interim CFO and Finance Director event, with a focus on Treasury Management and Foreign Exchange.
Rutherford Cross recently held our latest Interim CFO/FD Group, facilitated by Andrew Scott, Group Treasurer, Nomad Foods.
The group comprised seven Interim CFOs and Financial Directors from various businesses ranging from SMEs to large corporates across sectors including FMCG, Energy, Transport, Manufacturing, Leisure, Financial Services and Retail.
Effective Treasury Management
Andrew led the conversation focusing on effective Treasury Management and the importance of Liquidity Management. Andrew highlighted the importance of getting this discipline into the subsidiaries of a business, avoiding local balances and instead creating a ‘Group Cash Ethos’.
Effective cash flow forecasting is fundamental to every business. The Group agreed that many businesses are ill equipped or don’t focus enough on cashflow, and that often the tools used are too basic.
Cashflow is usually the first thing a new Interim CFO will look at when they join a new business. During the pandemic there has been a necessary but positive change in attitudes to Treasury Management as the number one reason companies get into difficulty is due to poor Liquidity Management. In businesses invested in by Private Equity there are always clear forecasting processes embedded in the business.
The discussion moved onto Foreign Exchange and managing multi-currency operations. For those companies working in multi-currency, balances should be brought back to the group reporting currency wherever possible.
It is important to use FX swaps and manage your net balances across currencies whilst minimising any exposures. The importance of not trying to ‘beat the market’ was highlighted. Companies that are successfully managing foreign exchange exposure are doing so by using historical trends to forecast exchange rates up to 18-24 months in the future having 75% cover built in some cases. Utilising platforms such as 360t or FXall can help finance teams to find the best deals in the market.
Thanks to Andrew Scott and the Group for providing their invaluable insight into effective Liquidity Management and Foreign Exchange Management. Our next meeting in Quarter 2 will focus on the Interim CFO/FD and the link to Private Equity.
If you are interested in joining this Group, are considering a career move into interim finance, or would like to utilise the services of an Interim CFO or FD please get in touch with [email protected]