TOMATO CATCH-UP: Newsletter No 164 – September 2013

Your monthly resource on working capital, process optimization and issues relating to the world of corporate treasurers, IT professionals and bankers!

Introduction:

The variety of topics covered in this newsletter couldn’t be bigger. It may resemble the variety of issues you face on a daily basis. You’re probably on top of most of them, and then there’s that one issue that’s giving you headaches and it just gets worse the longer you hold off tackling it. Make it easier on yourself and contact Martin at 044-814-2001. He’ll put you at ease by asking pertinent questions and give you answers that you can use to make a decision on how to proceed toward the best solution.

Enjoy the variety!

Regula Spottl

In Today's Issue:

TOMATO UPDATES

FINANCE, BANKING AND IT

MANAGEMENT AND CAREER

How to Deal with Difficult Employees

Brown Bag Lunch on EMIR

At our last Brown Bag Lunch in Bülach, we discussed EMIR, an EU regulation designed to increase the stability of the over-the-counter (OTC) derivative markets throughout the EU states. We wanted to figure out what it means for Swiss treasurers and if/what actions are needed to comply. Our conclusion: Many SME-Corporates don’t need to comply as clearing. But reporting is obvious and necessary.

Since the Lehmann Brothers scandal, Counterparty Risk has become a hot topic in the financial world. The U.S. introduced the Frank/Dodd market regulation and the EU designed EMIR which mandates reporting all OTC-Derivatives under the Coordination of the newly designed ESMA (European Securities and Markets Authority).

For us in the corporate world the first question is: Are my corporate hedge transactions OTC-Derivatives? What needs to be reported, when and to whom?

You will find details on our checklist (in German). Our information stems from official EU and the EMSA websites. Please call us if your treasury needs more specific information.

We are happy to assist you in an easy process flow, from identifying the transactions in your ERP to a most automated way to reporting to EMSA.

In unserer Checkliste EMIR zeigen wir in wenigen Worten auf, worum es sich handelt, wen es betrifft und was umgesetzt werden muss. Rufen Sie uns an, z.B. auch nur für Klärungen spezifischer Fragen. Wir sind Ihnen gerne behilflich.

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Credit Risk and Trade Finance Management

By Allen Holland

Allen worked for Tomato in 2004. During that time, he wrote FX Risk Management – Back to Basics, which was published in gtnews.com. In the last eight years, Allen has worked as Credit Risk and Trade Finance Manager in banks and multinationals. Full bio (bottom of page)

In the op-ed piece One Man’s Journey through Credit Risk and Trade Finance Management Allen explains key points and supports them with his own experience. He explains in detail:

The importance of Your Company’s Strategy and Risk Appetite, and what to do to understand it
The importance of communication: With whom to communicate, what specific information is needed, and how to get it.
Financial Analyses for Credit Risk Management Performance: How to conduct analyses including 5 key measures of effective credit management
Credit Management Policy and Procedures: What to include in this document
Outsourcing Credit Risk Management? Pros and cons.

Full story…

Please feel free to send Allen any feedback you might have to allen@intergga.ch.

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Kreditkarten akzeptieren mit Smart phones

Ab Ende September wird UBS ihren Kunden mit SumUp eine neue, einfache und günstige Art, mit der Karte zu zahlen oder bezahlt zu werden, anbieten.

Bei SumUP handelt es sich um ein Kartenlesegerät, das mit iPhone, iPad, iPod touch und Android Geräten und einem mobilen Kartenleser, der im Kopfhörer-Eingang angeschlossen wird, funktioniert.

Jedes Business kann Maestro-, VPay-, MasterCard- und Visa-Karten mit dem mobilen Kartenleser PIN+ akzeptieren. Das Gerät garantiert zertifizierte Sicherheit. Autorisierung der Zahlung läuft über PIN oder elektronische Unterschrift ab. Details…

SumUp Product Description; “SumUp (sumup.com) is European mobile credit card processing application for iPhone and Android users … that includes a free card reader, phone app, and account setup as well as a no other fees in addition to a flat processing fee of 2.75% for all card types and transactions.”

Regula’s Kommentar:
SumUp ist wie Square, ein in USA ein beliebtes Produkt, das der Twitter Gründer Jack Dorsey entwickelt hat. Square ist popular bei Firmen, die Beträge manuell einkassieren wie z. B. Starbucks oder sehr kleine Businesses wie z.B. Verkäufer am Farmers Market. Beschreibung in English…

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Tips for Overhauling Your Cash Forecasting

Rather than forecasting sales, smart cash forecasting involves identifying the drivers of sales, which is a reflection of customers’ behavior. Since the current economic climate keeps changing, customer demand is hugely volatile. This makes cash forecasting extra challenging.

In the cfo-insight.com article “4 Easy Tips for Revamping Your Cash Forecasting”, Simon Bittlestone, managing director at Metapraxis, first explains three hurdles to effective cash forecasting. He then introduces four tips that focus on “simplicity, unity and agility, rather than complex financial modeling.” He supplements them with a graph of the structures involved. Full story…

Mr. Bittlestone’s advice makes sense and is doable, so we recommend this advice to any corporate finance professional!

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Trends that Are Transforming Treasury

A European-wide opinion poll by EuroTreasurer about the issues that will transform treasuries revealed five trends. They include:

Technology such as systems that “automate dealing, booking, reporting, matching and cash management make life easier for treasurers,” but will also give them headaches for various reasons.
Globalization is going expand the role of treasurers
Regulations are ongoing frustrations for treasurers as they are depending on banks doing their homework.
Transparency is becoming more important considering liquidity and financial risks requiring treasury management systems that enable treasurers to compile reports.
Interconnectivity
Swift and SEPA make it no longer necessary for treasurers to ‘operate through different electronic banking systems, signatures and file formats.”

Explanations to each trend in the EuroTreasurer article “5 Trends That Are Revolutionising Treasury”, Newsletter 15/2003.

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Growth of SWIFT Adoptions by Corporates: Ramifications

Corporations are increasingly adopting SWIFT. You find a definition and scope of SWIFT here. Two GTNews articles explore SWIFT, offering a new perspective and a recipe for success.

In SWIFT for Corporates: a New Perspective, David Watson of Deutsche Bank explains the reasons behind the growth and “explores the need for banks to reconcile proprietary cash management portals with agnostic technology solutions.” Full story…

In SWIFT for Corporates: A Recipe for Success, Stacy Rosenthal of SWIFT highlights the variety of solutions SWIFT offers as well as their efficiencies and value-added services. Full story… (both articles require free registration)

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Business Continuity Management in SMEs: Survey Results

How do small and medium-sized companies (SMEs) in Switzerland, Austria and Germany rate the status of their business continuity management? Between Nov. 2012 and Feb. 2013, executives from the service, transport and manufacturing sectors participated in an online survey conducted by Arno Gingl, a member of Austria-based Risk Experts Risiko Engineering GmbH. Key findings:

Barely 20% of the participating companies have undertaken any business continuity actions.
Only half of these companies use specific standards as a basis for their actions.
One quarter of the participating companies have suffered one or several cases of business interruption.
Almost 50% of companies with business continuity management don’t sufficiently train their staff.
The main reason why companies do not have any business continuity measures is a lack of know-how. Other reasons cited: They see no sense or added value in it, high costs and excessive effort involved.
Respondents identified the most important critical business processes as sales and distribution, followed by finance, human resources and information and communication technology.
The top five threats facing these businesses: (1) human failure, (2) lack of key staff, (3) loss of a major customer; (4) failure of problems with IT/ICT systems, and (5) breach of security.

Full story…

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KPMG Report on Cloud: Perspectives and Challenges

Cloud is no longer mere hype; organizations are increasingly learning about potential benefits as well as practical challenges of adopting cloud.

KPMG conducted a survey in which 650 senior executives in 16 countries representing multiple industries participated. They published the findings in “The Cloud Takes Shape - Global cloud survey: the implementation challenge” (28 pg pdf)

The survey revealed that the majority of organizations have begun to adopt some form of cloud technology and overall, businesses are warming up the benefits and risks associated with cloud.

Initially, companies focused on concerns about security and performance. Now they grapple more with such tactical challenges as “higher than expected implementation costs, integration challenges and loss of control”. They focus primarily on “implementation and operational and governance challenges.”

As the cloud market is maturing, companies learn from experience, and “best practices and challenges are starting to emerge.” Full report…

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Difference between Vendors that Sell Solutions vs. those that Sell Products

Some employees are known as problem solvers; they tend to be generalists rather than specialists. Solution vendors are like such employees. You need a solution vendor when you know what your problem is but you don’t know how to fix it.

Some product vendors pretend to be solutions vendors, but they don’t take time to understand your problem because they don’t have the tool and knowledge to fix problems.

In the CIO.com article “How to Tell Whether an IT Vendor Sells 'Solutions' or Just Products”, Rob Enderle suggests that you examine two things: “Their approach to solving a problem and the breadth of their tool set.” Each is suitable for a specific situation. However,” buying a product when you need a solution - and vice versa - can be costly,” warns Mr. Enderle. Full story…

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How to Deal with Difficult Employees

There are probably more types of difficult employees than you thought of and each type needs to be managed differently.

In the Inc.com article 10 Difficult Employees (and How to Handle Them), Geoffrey James describes a variety of types and advises how to deal with them.

The types of difficult employees include The Undecider, The Ultra-Competitor, The Drama Queen, The Iconoclast (drives on negative attention), The Social (Network) Butterfly (extreme focus on building relationships), The Droner (always ready to give you a presentation), The Volcano (explosive), The Procrastinator, The Creative Genius (always talks about amazing plans but seldom does actually do anything today) and The Panic Button (calm for days but when there’s a problem, he panics). Full story…

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From the Desk of Regula Spottl, Greensboro, North Carolina

What Characterizes a Company Where Young Professionals Are Happy?

CareerBliss.com is a huge portal that offers job postings, salary comparisons and company reviews. Their aim is to help people find employment that is a perfect fit and where they will be happy to work. Based on analyses from more than 220,000 employee-generated reviews between March 2011 and March 2012, they compiled a list of the 10 companies in the U.S. where young employees are happiest. What was it that contributed to these professionals’ happiness?

GE Energy ranks #1 on the happiness scale because:

The company works on projects that matter to the world (next generation wind turbines, solar panels, engines that run on biogas, smart grids etc)
Young professionals are working at a company that is big enough to have an impact.
They have a lot of responsibility quickly.
They have a good mix of freedom and accountability.
They immediately see the result of their efforts and how they make a difference.

The Forbes article “The Happiest Companies for Young Professionals” highlights reasons why young professionals are happy at Nordstrom (the 2^nd ranked company) and provides links to the other 8 companies that ranked in the top 10. Full story…

I can speak for all of us at Tomato that we are happy working for this small company. In our case, being small gives each of us the chance to make a difference and see the results of our efforts

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