TOMATO CATCH-UP: Newsletter Issue 191 – April 2016
Your monthly resource on working capital, process optimization and issues relating to the world of corporate treasurers, IT professionals and bankers!
This newsletter is bilingual, English or German according to the source.
Introduction:
During the last few weeks, there have been more articles on fraud in the press than on any other topic. They ranged from financial costs of payment fraud, white collar and economic crime and cybersecurity. We selected the two that most are related to your work and company. In addition, Martin Schneider recorded a videocast on payment gateways, a topic which has been at the forefront of many finance departments. Other topics include notional pooling, the importance of a good bank relationship and more.
For any issue you’re facing that you’d like to discuss with someone outside your company who has experience from working with a wide array of clients, feel free to contact martin.schneider@tomato.ch or 044 814 2001
Enjoy the various news and expert opinions!
Regula Spottl
Topics
- Tomato’s Latest Videocast on Payment Gateways
- A good Relationship with Banks is Key when Choosing a TMS
- A New Era for Notional Pooling
- Rückblick Zahlungsverkehrs-Event vom 30. März
- CFO Forum publiziert Referate der CFO-Tagung
- CFO Agenda: Key Issues in 2016
- EU Data Protection Regulation: Impactful Changes
- How Can CFOs Improve Sales Forecast Accuracy?
- CFO.com published eBook “Managing Cyber Risk”
- Cyber Security: Reasons for Regularly Testing Networks
- Change Requires Good Timing: Why Do Leaders Get It so often Wrong?
Tomato’s Latest Videocast on Payment Gateways
Payment Gateways are direct channels from your ERP or TMS to your most important house or partner banks. In the videocast, Martin explains how using a minimal number of payment gateways via specific channels saves cost and project time as well as significantly increases transparency in Treasury Accounting and ICS. It further helps to reduce the risk of fraud at the periphery (local) of your corporate financial flows, to enhance processes, and to improve transparency and visibility at headquarters.
The scope of such a project includes all Account Payables and Account Receivables of your international corporation.
Videocast No 6, April 2006 (3:13 mins)
As additional information: Discover the advantages of making group-wide local payments via a decentralized payment factory on our website.
A good Relationship with Banks is Key when Choosing a TMS
Choosing a TMS is huge challenge for corporate treasurers. They need to partner with banks to provide technology and other external experts to tackle the project.
In the GTNews article Providing TMS to corporate treasurers: why simplicity is key, Sonya Crites, D+H’s head of product management for cash management solutions, highlights “three key areas where banks can make sure their technology offerings meet the needs of simplicity and ease-of-use: Architecture, functionality, and operational capabilities.”
At Tomato, our banking background has been an immense benefit to corporate treasurers. We’ve been involved in countless TMS projects and have assisted treasurers in their collaboration with banks. Check our article at tomato.ch How Can Corporates Optimise Their Banking Relationships?
Once you rebuild your bank relations, you may realize more automated transactions from and to your banks; not only payments, but also guarantees, and letters of credit for example. We have experience in planning and successfully executing such project. Ask martin.schneider@tomato.ch
A New Era for Notional Pooling
Notional pooling has been an effective liquidity management tool for multinational organizations. This may no longer be the case due to regulatory, tax and accounting changes which can potentially reduce the usefulness of notional pooling structures as a tool to manage liquidity, suggests Citi’s Sandip Patil in the GTNews article Notional pooling: a new era.
Treasurers need to understand the impact of regulatory evolutions and accounting principles such as “requirements of IFRS/ IAS 32 versus US GAAP” as well as the “potential impact of BEPS actions,” and consider other options.
Patil reviews various considerations and best practices to ensure long term sustainability of an efficient liquidity program. Full story…
Martin Schneider’s Comment:
We‘ve heard from some of our colleagues and clients that they find Notional Pooling a good and simple method. This is our experiences as well. Basel III definitely raises questions about notional pooling, so we will evaluate alternatives and will report our findings.
If you use notional pooling or a different method, please let us know your experience so we can pass on your comments.
Rückblick Zahlungsverkehrs-Event vom 30. März
Zum neuen Schweizer Zahlungsverkehr fand am 30.3.2016 in Zürich diese Veranstaltung statt. Das Thema: "Neuer Zahlungsverkehr - Fit für den Wandel". Gastgeber war die Firma Bosshard mit Referenten von SIX, Postfinance und Credit Suisse.
Rückblick mit Referaten und Slides...
CFO Forum publiziert Referate der CFO-Tagung
Am 13. Januar 2016 fand der siebte Swiss CFO Day im Casino Zug statt. Das Thema war “Wettbewerbsfähigkeit – Swiss Made.
Der CFOs Newsletter I / 2016 widmet sich dem CFO Day mit Zusammenfassungen und Links zu den Folien der vier Referate.
- Die SNB und ihr Beitrag zur Wettbewerbsfähigkeit von Schweizer Unternehmen - SNB Vizepräsident Dr. Fritz Zurbrügg
- Internationale Expansion nach strategischer Logik - Urs Riedener, CEO von Emmi
- A Business View on Swiss Competitiveness - Michel Demaré und Patrizia Laeri
- From good to best - Gian Gilli
CFO Agenda: Key Issues in 2016
The 2015 edition of the Hackett Group’s Key Issues Study illustrates important implications for corporate finance. The GTNews article Finance, Big Data and Analytics shows two graphs:
- Figure 1: Companies primary and secondary business strategies
- Figure 2: Companies critical development areas
Specifying strategies clearly as illustrated in figure 1 is crucial because “organisations require more comprehensive profitability analyses”, suggest John Baker and Sean Mullane, Hackett Group. Big data makes this possible. The article lists a host of other possibilities that big data opens up.
The Hackett Group’s study is comprehensive and very detailed. In the GTNews article, the authors highlight the key areas where big data is crucial and it list key lessons in a relatively short article, which makes it a great resource. Article…
EU Data Protection Regulation: Impactful Changes
The European Commission initiated its EU Data Protection Reform in January 2012 to make Europe fit for the digital age (IP/12/46). On December 15, 2015, the Commission officially announced the General Data Protection Regulation (GDPR). Press release…
The regulation will bring about the biggest change in data protection regulation yet. The changes include for example substantial fines for breaches of data protection regulation and the obligation to report breaches. All organizations dealing with data of EU citizens will be impacted.
In a KPMG blog, Jeffrey Bholasing highlights the the three most impactful changes. Blog…
How Can CFOs Improve Sales Forecast Accuracy?
Even though sales teams spend a lot of time on the forecasting process, their forecasts are too often inaccurate. CFOs can do a lot to fix the problem, suggests Dale Chang, vice president of portfolio operations at Scale Venture Partners. In the CFO.com article How to Boost Sales Forecast Accuracy heoffers “a methodology for finding out that you're going to miss your number early enough to do something about it.”
Chang explains that CFOs have to identify where the company is on a 4-stage scale of forecast maturity to start setting forecast accuracy goals. It’s a process that enables forecasters “to take action in time to positively affect any forecast shortfalls.” Full story…
CFO.com published eBook “Managing Cyber Risk”
The ebook “Managing Cyber Risk”, which can be downloaded free of cost with registration, explores:
- The costs of a cyberattack and the significance to cyber insurance to your organization;
- A brief history of cyberattacks and how it lead us to today's cybercrimes; and
- The CFO's role in cyber security beyond the aftermath
Cyber Security: Reasons for Regularly Testing Networks
Everyone in a company involved in handling and distributing sensitive data must know best security practices and how to fix any security weaknesses before an attacker gets to them, suggests Lawrence Munro, an experienced cybersecurity expert in his GTnews article Cyber Security Strategies must start with the organisation’s DNA.
With treasury being at the heart of corporate finance, treasurers should take this responsibility more seriously than most. Munro lists 7 reasons why companies need to constantly test their networks. Some may belong to IT, but it’s important that financial professionals understand risk and solutions to protect data.
- Get to the root of the cause before the attacker does
- Uncover and fix poor passwords
- Gain visibility of what your third party providers are doing
- Complacency can be costly
- Avoid overlooking security
- Know how and where employees are accessing business data
- Make changes securely and ensure your most valuable assets are protected
Change Requires Good Timing: Why Do Leaders Get It so often Wrong?
Change in corporations often comes too late or it doesn’t solve a hazardous situation. Take Volkswagen’s cheating scandal for example. It is easy to find reasons in hindsight but it seems clear that Volkswagen’s culture led to the scandal. Their culture has been described as “confident, cutthroat, and insular … one in which subordinates were fearful of contradicting their superiors and were afraid to admit failure,” as James Heskett cited in Harvard’s newsletter article Why Do Leaders Get Their Timing Wrong?
Mr. Heskett asked readers if good management timing is primarily a function of strategy or culture. Responses suggest that it’s both. A strategy which doesn’t include assessing the consequences of a move at any point is a primary cause of the problem,” wrote one reader. Another reader wrote: "All you can do is be clear about your long-term direction, make decisions with that direction in mind, monitor results, and make changes or adjustments when you’re not getting the results you expect.”
Various readers considered the organization’s culture to be the problem. “A dysfunctional culture, or one where "too many (leaders) are blissfully out of touch with what really goes on in business,” will certainly result in bad leadership timing. Full range of readers’ responses…
From the Desk of Regula Spottl, Greensboro, NC
We Need to Slow Down! Here’s why
You may like the idea of slowing down but just don’t see how it’s possible!
Pulitzer Prize-winning reporter and author Tom Friedman makes the case for slowing down in his latest book, Thank You for Being Late, in which he suggests alternative ways to live in an ever faster world.
“The faster the world gets ... the more you need to step back and appreciate everything that’s old and slow,” he says. Also, he reminds us that really meaningful things in life are not things that can be gotten through technology. Actually, “The really important stuff today, as the world gets faster, is all the stuff you can’t download,” Friedman says.
As to the title of the book, Friedman says that if someone is late for meeting him, he uses the time by himself to “people-watch, eavesdrop on nearby conversations and connect ideas he’s been bouncing around in his head.” Details in an huffingtonpost.com article.