Corporate Treasury’s Mid-year Report Card

By Kyriba July 21, 2014

We’ve recently passed the halfway point of the year. So, while many of you have recently received your child’s end of year report card (or are yourself getting your mid-year evaluation), I thought that it’s time for a quick catch up to see how things are progressing on the corporate treasury front. As a benchmark to be measured against, let’s take a look at some of the things that were listed on the corporate treasury’s New Year’s resolutions post, that we talked about at the beginning of the year. How well is treasury progressing against its goals for the year?

Dealing with regulatory compliance

The SEPA deadline came on February 1st… and then passed, as it became apparent that many countries would completely miss the deadline.


The most recent statistics (from the end of May) from ECB suggest that, although many countries still aren’t 100 percent SEPA compliant for either SEPA Credit Transfers – SCT (left chart) or SEPA Direct Debits – SDD (right chart), they are certainly much closer to achieving it1. Many countries have already achieved 100 percent SCT compliance, and while only Belgium, Slovenia and Slovakia are reporting 100 percent SDD compliance, the overall figure is much healthier than it was when the first SEPA deadline passed in February, at less than 30 percent. Given that there’s now less than two weeks until the revised deadline of August 1, hopefully the laggards will have completed their compliance processes since the figures were last updated. If not, it could have a huge imact on ECB’s credibility.

While EMIR did get implemented on time on February 12, it certainly wasn’t initially an unqualified success, and was viewed by the market as “a mess” just two weeks after it launched2. Although these issues seem to have been resolved3, many believe that more clarity is needed from traders on what national regulators expected, and when they expect it. This sentiment is echoed by regulators lax enforcement of EMIR, with several countries saying that they will not levy fines for non-compliance in the near-term.

Staying clear of Bitcoin

We said that a treasurer’s matra should be “I will not invest in Bitcoin.” The cryptocurrency still makes the both positive and negative headlines4. As Dell announces that it will accept Bitcoin on its store5, Bloomberg highlights that a lack of trust will be Bitcoin’s ultimate undoing6. However, none of this uncertainty (nor its continued volatility) has slowed down investments in Bitcoin, and more than $240 million of VC money has poured into Bitcoin-focused startups so far7. Of particular note was that when the U.S. government auctioned off its reserve of Bitcoin seized from the Silk Road, the winner – who forked out close to $20 million – was legendary venture capitalist, Tim Draper8. Even though Draper’s VC firm, Draper Fisher Jurvetson, certainly seems to have a good track record with companies such as Baidu, Hotmail, Skype and Tesla9, we stand by our position that, while it could prove to be a lucrative investment for those with an appetite for risk, it remains far too risky for treasurers to take seriously at this stage.

Perfecting cash forecasting

Everyone wants to improve their cash forecast. However, for many companies, it’s still little more than a pipe dream. Even though treasury professionals spend, on average, half their time on cash forecasting, it’s still very inaccurate. During a recent survey10, we asked how accurate companies’ cash forecast is. The response was startling:

  • Highly accurate (almost no variance): 0%
  • Accurate (some variance, but not significant): 32%
  • Somewhat accurate (some significant variances): 53%
  • Very inaccurate (major variances): 8%
  • Variances aren’t analyzed: 8%

Not a single respondent believes that their cash flow forecast is very accurate, and slightly less than a third see their cash flow as accurate. Six in 10 treasurers think that their cash flow forecast has either “significant” or “major” inaccuracies. The consequences of this lack of accuracy can’t be overly emphasized, and can cause a company to require a lock up huge reserves of cash. When many millions or billions of dollars are at stake, this lack of cash visibility can have a dramatic impact on how much “idle” cash an organization is forced to have on hand,  to cover for unknown cash needs. The knock-on effect from this is that a company’s cash can’t be used optimally – paying down debt or funding growth or M&A initiatives, for example. This obviously remains something that needs to be improved upon as 2014 progresses (and beyond)

Moving away from spreadsheets


Ah, spreadsheets. Can’t live with ’em but can’t live without ‘em. Actually, it seems like “can’t live without ’em” continues to be the case. According to research that we commissioned with the UK’s Association of Corporate Treasurers11, spreadsheets remain the dominant tool for treasury management, a number which hasn’t changed significantly since last year’s survey.

This is despite that fact that spreadsheets’ inherent riskiness is well-understood (and documented). Spreadsheet errors, while relatively low on the risk agenda for treasury professionals as a whole (cited by 27 percent of respondents to our survey as a key risk factor), they are the second most common risk factor for those who use spreadsheets as their primary treasury management tool, at 43 percent. This compares to just 15 percent of those who use a dedicated treasury platform or an ERP treasury module.

While the vast majority of treasury departments still use spreadsheets to some extent, they are certainly a much larger source of concern if relied upon as the primary tool. Spreadsheet-only treasuries also cite the lack of visibility of assets and forecasts as a much larger risk factor than those who use treasury management packages. Overall, lack of visibility is a top three risk for 60 percent of spreadsheet-only treasuries, compared to just 32 percent of those with treasury management software. While spreadsheets will certainly never be completely replaced in the treasury department, there is still a long way to go until most treasury teams have reached a position where their reliance upon them has been reduced.

Final report: C-

Although this hasn’t been a terrible year, it’s fair to say that there is still plenty of room for improvement for corporate treasury. Overall, although there has been progress in a number of areas, our hypothetical treasurer still has a way to go until they have achieved all of their resolutions for 2014. 

How does your list look?



1SEPA Quantitative Indicators – European Central Bank

2. “What a mess”: market reflects on start of Emir reporting –, February 26, 2014

3EMIR reporting post go-live update – PwC blog, March 17, 2014

4Google News search for Bitcoin

5Dell jumps on the Bitcoin bandwagon –, July 21, 2014

6Trust Will Kill Bitcoin – Bloomberg, July 18, 2014

7. State of Bitcoin Q2 2014 Report Reveals Expanding Bitcoin Economy – Coindesk, July 10, 2014

8. Single Winner of All Bitcoins in U.S. Auction – New York Times, July 1, 2014

9. Draper Fisher Jurvetson portfolio

10. Why are accurate cash flow forecasts so hard to achieve? – Kyriba Blog, June 24, 2014

11. Kyriba / ACT 2014 Treasury Survey

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