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Constructive in difficult times

Firstly I would like to wish you all a less turbulent 2009. Whilst I am not one for predictions I do believe that we in the treasury profession need to be planning for some unusual times in 2009 and 2010.

I joined the ACT a few weeks ago in a full-time capacity. Prior to becoming Chief Executive I spent many years as a finance practitioner and have been an ACT Member since the membership exams were launched.

Working capital management

The financing of working capital is currently in the spotlight as banks and other lenders, customers and suppliers review their trading relationships and credit risk.

The following articles and guides may be of interest:

Relationships with customers and suppliers

Working capital efficiency

The Treasurer magazine

Cashflow reporting – could do better

That cash is (still) king needs to be high in the minds of companies as company reports are made in 2009.

The Corporate Reporting Users Forum (CRUF) recently wrote to finance directors/chief financial officers appealing for an improvement in the level of cash disclosure in company accounts.

Bank loans for larger companies?

Bank loans for larger companies? Life on Mars says John Grout What are banks for? Recent headlines say the government is concerned to keep credit flowing to consumers and to small businesses. There has been little mention of larger firms.

We are told that, post this credit crunch, the world of finance will have changed a lot: the practice of the years around the turn of the millennium is history. What will financing look like for larger companies? Perhaps, back to the slightly more distant past. I started in this game in the early 1970s.

Managing risk remains key

In these challenging times our members and those taking the ACT’s qualifications are equipped to play a vital part in ensuring that their organisations remain financially resilient. Volatility across all markets remains exceptional and a focus on management of financial – and enterprise – risk can never have been more important. Funding and liquidity management shows no sign of becoming any less critical, with availability and maintenance of credit at the heart of what many of our members are focusing on.

Credit risk

What should you be thinking about and what do others think of your credit? Credit risk is one thing that treasurers must be concentrating on at the moment. The first part of this is to investigate what credit risks you are taking.

Is the spare cash of your firm safely invested and available when you need it? Are any derivatives that you hold at risk from failure of your counterparty? Are your customers a good credit for the amount you are extending to them. What are the implications of change in any area? The second part is to understand what others think of your credit.

The last man standing

It occurs to me, writes Peter Matza, that many treasurers will have taken on a role during the economic crisis of the past 18 months for which they may be ‘the last man standing’.

Supporting you through the downturn

We continue to be as active as possible in supporting our members with comment on the evolving issues within the financial markets. A number of us have been extensively quoted in the media (the Financial Times in particular) and have broadcast on Bloomberg, ITN News and the Today programme on BBC Radio 4.

In line with our stated policy we will normally comment first from the perspective of non-financial sector corporates.


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