Treasury management at its core is key to the success of any business. Understanding and managing your cash flow cycle is undoubtedly one of the most important areas to consider when planning, making decisions and considering the way forward in a sustainable way.

This is especially difficult for businesses with currency exposure and even more pronounced when markets are volatile and uncertain. The last weeks have been riddled with negative news for South Africa, impacting the rand heavily. How then, does one use the exposure, volatility and uncertainty to one’s favour? How does one truly know what your cash flow position, cycle and future looks like?

The recipe we ascribe to, is consistency!

How Wauko Can Help You Harness Opportunity?

When working with businesses exposed to cross border risk, we usually focus on two initial levers. These being providing them with a powerful Cash Flow Management system and the formulation of a robust Foreign Exchange Risk Management Policy.

Foreign Exchange Risk Management Policy

The formulation of a robust Foreign Exchange Risk Management Policy supports strong risk management and aims to provide consistency in the quality of results delivered. Each business is different and therefore requires a tailored approach.

We find that for most businesses, merely knowing your exposure at the point that it is realised is tricky. In many cases, the exposure is only managed or known at the point of it reaching the finance area. In order to truly manage exposure, one needs to have sight of it as soon as possible.

Our uniqueness is the ability to identify risk when it arises and consistently manage the risk to ensure best results. Accurate, complete, valid and timeous information for decision making is powerful!

Through analysing businesses we identify the best point at which to begin management of risk and then action on a consistent basis. This of course, means having a clear understanding of the ideal approach to suit your business.

Our aim is to optimise cash flow, minimise risk, optimise returns, ensure product pricing remains competitive, reduce overall cost of the foreign exchange risk management program and ensure sufficient funds for operational needs.

We are always very open to meet with prospective clients, understand their business and formulate a proposed Foreign Exchange Risk Management Policy. Showing true and determinable value in the case of a robust policy, puts us in a position where we can come and show you what we could do to improve your results consistently.

Cash Flow Management

When managing cash flow, we find businesses battle mostly with the fact that their information is broadly based on the past. Data in the business is sourced from ERP, Accounting and/or excel sheets. Time is taken to draw and create cash flow forecasts which are a high level guide to what may or may not happen.

Strategies in support of future performance require proactive management. Historical data won’t help you achieve future performance. Without forward-looking information, you are caught making reactive decisions rather than strategic ones.

Where businesses would like to streamline the process, software companies are consulted and often solutions implemented on a clinical basis i.e. no analysis of the business processes and needs. Having a partner able to propose and implement a system which is tailored to your unique needs is a game changer.

Our solution is powerful with the ability to provide up to date and forward-looking information:

• Liquidity management: Cash positioning and forecasting, payment processing, Investment and debt management
• Risk management: Foreign exchange risk management, Liquidity risk management, Interest rate risk management and counterparty risk management
• Reporting and accounting: Accounting, Hedge accounting, Treasury reporting and Regulatory reporting
• In-house banking: Intercompany loan management, Netting, Bank fee analysis and Trade finance

Much like with all the services we offer, an understanding of your business, its needs and future requirements, our team propose a solution which is fit-for-purpose, is implemented and integrated with care so as not to create disruption and to ensure a seamless and valuable result.

Our clients enjoy accurate, complete, value and timeous information which supports decision making, which is live and up to date. As we often say, we provide you with a view of your business today, a week, month or year from now. Strategic and dynamic forecasting and planning assists in aligning operating performance with targets, benchmarks and metrics key to overall success.

Time and risks are mitigated and/or alleviated through dynamic and tailored reporting and dashboarding. Tailored to suit your needs, our powerful reporting capability provides visibility in real-time, appropriate format and available at the touch of a button. No need for hours spent preparing for meetings and reporting that should rather be used to make the much-needed strategic decisions that propel you forward.

In Conclusion

There are solutions! Consistency in results is possible! Speak to partners who are prepared to understand your business, its unique needs and its aspirations. The cash flow cycle starts from strategy and flows all the way through your business operations and processes until it reaches your bank account. Therein lie many nuggets of opportunity just waiting for you.

Working with businesses looking to grow and strengthen is our passion. We would love to chat to you about growing your business and strengthening your cash flow cycle!
If you found this article interesting and would like to discuss any of the topics, please don’t hesitate to contact me: Jacky Buys on 021 819 7829 or jbuys@wauko.com