Why Treasury is the New ‘Value Center’ of the Enterprise

By Erik Bratt May 18, 2018

Editor’s Note:  Today, we launch the first of a multi-part blog series profiling CFOs who are leveraging treasury to drive strategic change in their organizations. We start with Marina Chase, CFO of Caribbean Airlines, who says modern treasury management technology “has helped treasury become both a knowledge center and a risk-management center for the business … (treasury) is no longer back office.” Marina’s comments from her profile in Kyriba’s new e-book, “The CFO Perspective: The Strategic Value of Treasury,” which profiles more than a dozen CFOs and high-profile management consultants from Accenture and KPMG. Enjoy!

Marina Chase, CFO of Caribbean AirlinesCash management in an airline business is challenging for many reasons, especially for an international company. Unpredictable weather events, volatile fuel prices, and the challenge of operating with many currencies can significantly impact revenue, cash, and profitability. Marina Chase, CFO (Ag.) of Caribbean Airlines, says that treasury has experienced big changes in recent years. “It’s still cash management,” she says, “but treasury has moved away from the traditional operational functions. It is no longer back office.”

In Chase’s organization, modern treasury-management tools have helped treasury become both a knowledge center and a risk-management center for the business. With treasury serving as a knowledge center, all divisions turn to treasury for real-time information related to operational activities. For example, this can include real-time information that’s needed for payments, and providing information about different laws and restrictions that affect transactions in different countries. Treasury also provides information to support strategic decisions, such as evaluating the cash flow and profitability of current and potential new routes.

Related reading: CFO Brings Treasury-led Benefits to Graff Diamonds

Because there are so many variables that can seriously impact the business, risk management is a critical treasury function. “We are able to manage risks, especially around currency exchange,” explains Chase. “These are not risks limited just to interest rates. We also have to deal with repatriation risk. The efficiency of cash flow and managing cash have a lot to do with getting your money in real time. Because of laws and restrictions in different countries like Venezuela and Cuba, there are different ways that we have to comply with regulations in order to access our working capital.” Treasury has become a value center in the enterprise.

“We track working capital, and not just working capital, but also the value of working capital,” says Chase. “An important part of this is predictive analytics, which is more than transformational. It supercharges treasury’s efforts.

To read the rest of Marina’s interview, plus get insight from nine other CFOs, download our new e-book.

Activate Liquidity.

Transform how you use liquidity as a dynamic vehicle for growth and value creation

Find out how