IGTA Journal - Summer 2020

France, Article: The Treasurer's Challenges In a Period of Great Uncertainty By Cashsolve Corporation, From La Lettre du trésorier, No. 379, June – July – August 2020, magazine of AFTE, the French IGTA Member Association In times of great uncertainty, lack of liquidity is one of the most feared consequences. The treasurer's role is thus evolving towards that of a fully-fledged financial strategist, and the links with the financial department are being greatly strengthened as a result. The treasurer then becomes a tactician whose role is preponderant in risk management and forecasting, which is essential for the implementation of the general strategy. VISIBILITY ON FINANCING & FORECASTING PLAN Whatever the size of the company, the visibility of internal and external financing will be more vital than ever in the weeks and months to come. Whether this financing is short, medium or long term, it must be the subject of flawless planning. In such circumstances, it is more crucial than ever to put in place a solid forecasting plan that includes several scenarios. This forward-looking plan must be easily adaptable in the very short term. It must also include a rolling 12-month budget structure. MONITORING INDICATORS: ONE OF THE TREASURER'S CHALLENGES To achieve this objective, the treasurer has every interest in using the most robust indicators. He will monitor the Operating Cash Flow, to keep a constant eye on the Self-Financing Capacity. Similarly for Working Capital Requirement, which he can seek to reduce through supplier and customer reminder schedules. Finally, we must not forget the essential indicator of EBITDA. It places the company in relation to its competitors and will above all make it possible to differentiate between "direct" and "indirect" forecasting methods. A PERIOD OF DANGERS (AND OPPORTUNITIES!) FOR THE TREASURER As the financial risks inherent to the period are difficult to control, the treasurer should not work alone. This collaboration must lead to a decompartmentalisation between the departments to set up a single and cross-functional structure. Thanks to this reliability and consistency of data, the treasurer will be able to know exactly where he stands in relation to the various market risks: exchange rate, interest rate and raw material risks in particular. IGTA eJournal | Summer 2020 | 7