Treasury Management Roles

Protect your margin before markets move. FX can erase profit fast. Keep it simple with these seven steps: 1. See it ➞ Make a list of every FX cash flow. ➞ Currency, amount, date, in or out. 2. Hold currencies ➞ Open multi-currency accounts for top markets. ➞ Collect locally and convert when you choose. 3. Set a budget rate ➞ Pick one quarterly FX rate with a small range. ➞ If spot exceeds the range, reprice or hedge. 4. Use forwards ➞ Lock a portion of near-term cash flows. ➞ Match maturities to invoice dates. 5. Build natural hedges ➞ Offset inflows with outflows in the same currency. ➞ Pay suppliers or loans in the currency you sell. 6. Price and invoice smart ➞ Quote in your cost currency or add an FX clause. ➞ Shorten terms and offer early payment. 7. Net and time conversions ➞ Net payables and receivables by currency each week. ➞ Convert twice a week using limit orders. You cannot control financial markets, but you can manage FX exposures. How do you manage your FX risks? ------- ➕ Follow Jonathan Maharaj FCPA for finance‑leadership clarity. 🔄 Share this insight with a decision‑maker. 📰 Get deeper breakdowns in Financial Freedom, my free newsletter: https://lnkd.in/gYHdNYzj 📆 Ready to work together? Book your Clarity Session: https://lnkd.in/gyiqCWV2

FX & Interest Rate Risk Management Cheat Sheet! 2 critical financial risks treasury teams manage are FX risk and Interest Rate Risk (IRR). If not properly managed, both can erode margins, distort earnings, and create instability in cashflow planning. Learn more: https://lnkd.in/gwSMHnRG Here is a concise framework you can use: 1. Foreign Exchange (FX) Risk Key FX Risk Types • Transactional FX Risk – Exposure from future contractual cashflows such as imports, exports, accounts receivable, and accounts payable. Impact: Margin volatility and cashflow uncertainty. • Translational FX Risk – FX impact when consolidating financial statements of foreign subsidiaries. Impact: Earnings volatility in the balance sheet and income statement. • Economic FX Risk – Long-term impact of exchange rate movements on competitiveness and pricing strategy. Impact: Potential market share erosion. Measurement & Monitoring You can track exposure using tools such as: • Net Open Position (NOP) – aggregate currency mismatch across inflows and outflows. • FX Sensitivity Analysis – EBITDA impact from ±5–10% currency movements. • Scenario Modeling – base, worst, and best exchange rate scenarios. Operational Mitigation (Natural Hedging) Before using derivatives, you can reduce exposure through: • Currency matching of receivables and payables • FX budget rates for pricing and procurement planning • Local currency settlement strategies • Procurement timing adjustments based on FX trend Financial Hedging Instruments When natural hedges are insufficient, you may use: • FX Forwards – lock in exchange rates for future obligations • FX Options – downside protection with upside participation • Cross-Currency Swaps – exchanging one currency for another Strong governance is essential, including hedge ratio policies, counterparty monitoring, hedge effectiveness testing, and board-approved FX policies. 2. Interest Rate Risk (IRR) Interest rate volatility affects borrowing costs and investment returns. Key IRR Types • Repricing Risk – mismatch between asset and liability maturities • Yield Curve Risk – changes in short- vs long-term rates affecting refinancing costs • Basis Risk – mismatch between benchmark indices (e.g., SOFR vs Prime) • Optionality Risk – early repayment or prepayment risk affecting expected cashflows Measurement Tools Treasury teams typically use: • Interest Rate Gap Analysis • Duration Analysis • Stress testing using ±100–200 bps scenarios IRR Hedging Instruments Common tools include: • Interest Rate Swaps – convert floating debt into fixed rates • Interest Rate Caps – set maximum borrowing cost • Interest Rate Floors – protect minimum investment returns • Collars – combine cap and floor for cost-controlled protection Treasury is really about protecting enterprise value from financial market volatility while maintaining stable margins and predictable cashflows. 📌 Repost & Share!

Derivatives in Treasury Management: A Key Tool for Risk Mitigation Understanding the role of derivatives in treasury management is essential for any financial institution aiming to manage risk effectively. Derivatives, such as swaps, forwards, and options, provide treasurers with the tools to hedge against various financial risks, including interest rate fluctuations, currency volatility, and commodity price changes. In an environment where market conditions can shift unexpectedly, the ability to forecast cash flows with accuracy is significantly enhanced by the strategic use of derivatives. For instance, an interest rate swap allows a treasury to convert variable-rate liabilities into fixed-rate obligations, thereby stabilising interest expenses and improving predictability. Furthermore, derivatives are advantageous in managing currency risk, particularly for organisations with international operations. By using forward contracts or options, a company can lock in exchange rates, thus shielding itself from adverse currency movements that could otherwise erode profitability. Although derivatives require a deep understanding of financial markets and careful management, their prudent use is beneficial in enhancing the stability and predictability of a company's financial performance. For treasury managers, derivatives are not merely tools for speculation but are essential instruments for safeguarding the financial health of the organisation. Emphasising a conservative approach, derivatives should be employed as part of a comprehensive risk management strategy, aligning with the broader objectives of the institution.

Most FP&A teams spend hours on variance analysis and still miss the real problem. After 15+ years at P&G, Unilever, and Squarespace, I've watched skilled analysts calculate every variance to the penny and still walk into the leadership meeting unprepared for the question that actually matters. The issue is often that variance analysis gets treated as a reporting exercise when it should be an investigation. Here's the three-step approach I teach as a corporate FP&A trainer: 𝗦𝘁𝗲𝗽 1: 𝗧𝗵𝗲 𝗪𝗵𝗮𝘁 Identify what actually happened. Compare actuals to forecast at the right level of detail. Too granular, you drown in data. Too high-level, you miss what matters. 𝗦𝘁𝗲𝗽 2: 𝗧𝗵𝗲 𝗪𝗵𝘆 Most teams stop at "sales were down 10%." But why? Volume or price? New customers or retention? One product line or across the board? This is where the analysis usually breaks down. 𝗦𝘁𝗲𝗽 3: 𝗧𝗵𝗲 𝗦𝗼 𝗪𝗵𝗮𝘁 (this is most crucial!) Connect the variance to business impact. A 10% sales miss is fine if it's a timing issue. It's a crisis if a competitor is taking share. The ARCTIC framework (in the infographic below) is what I use to pressure-test the "So What" - which is where most variance analysis falls short. The teams I've seen do this well stop reporting variances and start using them as a forward-looking signal. Root cause becomes a forecast adjustment. Pattern becomes prevention. Which of the three steps trips up your team most often? -Christian Wattig 𝗣.𝗦. 𝗪𝗮𝗻𝘁 𝗺𝗼𝗿𝗲 𝗙𝗣&𝗔 𝗳𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸𝘀? 👉 𝗝𝗼𝗶𝗻 𝗺𝘆 𝗻𝗲𝘅𝘁 𝗳𝗿𝗲𝗲 𝗹𝗶𝘃𝗲 𝘁𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗵𝗲𝗿𝗲: https://lnkd.in/e9fEFjmK ________________________________________________ I'm the Director of the FP&A Certificate Program at Wharton Online and a former finance leader at P&G, Unilever, and Squarespace. I've trained 1,000+ professionals at companies like Google, Merck, and Lowe's. Here's how I can help: 🚀 Inside FP&A Academy My flagship online course for FP&A professionals who want to level up. 🤖 AI for FP&A A crash course on using AI to work faster and smarter in finance. 🏢 Corporate Training On-site workshops to upskill your finance team. 🔗 Go to InsideFPA[𝘥𝘰𝘵]com to learn more.

Deep-Tier Supply Chain Finance: Unlocking the Potential BAFT, the leading global financial services association for international transaction banking, and the Asian Development Bank (ADB) earlier released a white paper, Deep-Tier Supply Chain Finance: Unlocking Potential This Report highlights the potential for deep-tier supply chain finance (DTSCF) to bridge the trade finance gap, drive liquidity to the most underserved segments of the trade market and enhance visibility within global supply chains. Deep-tier supply chain finance is an innovative financial solution with the potential to unlock financing for deeper tier suppliers, where small and medium-sized enterprises (SMEs) are prevalent, by allowing access to finance by leveraging the credit risk of the anchor buyer. DTSCF not only unlocks finance at favorable rates for deeper tiers in a supply chain, but it also promotes an ecosystem of financial stability, risk management, and sustainability throughout the entire supply chain. BAFT and ADB developed this white paper to provide a shared view of DTSCF, to outline its features as a new technique in financing trade and supply chains, to define what DTSCF is and what it is not, and to offer necessary definitions and legal frameworks to make it a success at scale. This publication explains how deep-tier supply chain finance (DTSCF) can unlock financing for small and medium-sized enterprises, improve financial stability, and ensure complex supply chains become more transparent and resilient. #Finance #Blockchain

🚀 Demystifying Subordination Risk in Syndicated Loans & Private Credit Corporate debt structures are usually more complex especially in LBOs and leveraged recapitalizations. Understanding subordination risk is critical - whether you're a lender, investor, or a borrower. Let’s break it down with a real-world case study and hard data: $10Bn Financing for MegaCorp (Hypothetical LBO) Capital Structure: 1. $6Bn Senior Secured Loan (at an operating subsidiary, say OpCo, secured by charge on factories & IP) 2. $3Bn Unsecured Bonds (at the parent holding company, say HoldCo, no collateral) 3. $1Bn Subordinated Debt (at HoldCo, contractually junior in repayment) 1️⃣ Collateral Subordination: Risk: Only secured creditors can claim specific assets. What Happens in Default? - Banks (senior secured lenders) seize and sell MegaCorp’s factories/IP. - Unsecured bondholders get nothing until secured lenders are fully repaid. 💡 Data Point: Secured loans recover ~60-80% vs. ~30-50% for unsecured (S&P). 2️⃣ Contractual Subordination: Risk: Subordinated debt agreements explicitly rank repayment priority. What Happens in Default? - The $1Bn subordinated debt is contractually behind unsecured bonds at the HoldCo in repayment. - Even if HoldCo has $500million left after paying unsecured bonds, sub-debt may recover pennies on the dollar. 💡 Data Point: Subordinated debt recovers just ~20-30% on average (Moody’s). 3️⃣ Structural Subordination: Risk: HoldCo debt is structurally junior to OpCo debt because cash flows must service operating subsidiary debt first. What Happens in Default? 1. OpCo’s $6Bn loan is repaid first from subsidiary cash flows/assets. 2. HoldCo’s $3Bn bonds only get leftovers (if any). 3. Subordinated HoldCo debt? Near-total wipeout in a default scenario. 💡 Data Point: HoldCo debt recovers ~10-30% vs. ~60-80% for OpCo debt (Moody’s). Why Does This Matter: ✅ For Lenders: Pricing reflects subordination—HoldCo debt often yields 300-500bps more than OpCo debt. ✅ For PE Firms: They could exploit structural subordination by loading OpCo with assets and HoldCo with debt. ✅ For Investors: Recovery rates vary wildly — always important to check where you sit in the capital stack. In restructuring battles, OpCo lenders often block cash upstreaming to starve HoldCo lenders/creditors—a key risk in Leveraged Buyouts (LBOs). Krishank Parekh | LinkedIn

💥 FinCrime Mythbusters 💥 Myth#7 〰️ Real-Time Payments ❌ Myth: Real-time payments make fraud unstoppable. ✔️ Reality: While real-time payments present new challenges, they have actually pushed the industry to develop more sophisticated and effective fraud prevention measures. Real-time fraud prevention from a banking/financial institution perspective; 1️⃣ Real-time fraud monitoring systems 📌 AI/ML spotting unusual behaviour in milliseconds. 📌 Behavioural biometrics & device intelligence to detect fraudsters. 📌 Dynamic risk scoring for instant step-up checks. 📌 Cross-channel monitoring because fraudsters don’t operate in silos. 🏹 A Little Story - I have previously worked across siloed teams in fraud prevention, from online banking and debit/credit card fraud to telephone banking. One of the biggest challenges with this structure is that fraudsters do not operate in silos. They can manipulate a customer into making a payment via online banking, while simultaneously exploiting stolen card information on another channel. When these attacks go undetected across disconnected teams, the losses are far more greater. 2️⃣ Integrated regulatory screening 📌 Sanctions/PEPs checks before payments clear 📌 APP fraud rules (PSR 2024/25): Focus has to shift to inbound payments rather than outbound. 📌 Stronger COP & beneficiary verification to stop mule accounts via CIFAS or UK Finance. 3️⃣ First-line defence training 📌 Spotting red flags & asking the right questions (not just tick-box) 📌 Using the Banking Protocol to stop scams in real time. 📌 Consumer Duty = empower staff to pause or escalate. 4️⃣ Customer communication 📌 Real-time alerts for new payees & high-risk payments. 📌 Aligning with Stop Scams UK and Take Five campaign, so the customers receive continuous warnings across the ecosystem. 📌 'Confirmation prompts' before each and every transfer. 📌 Scam education tailored to retirees, students, SMEs. 📌 Clear feedback to the customers when payments are blocked, it builds trust and reduces Complaints. ⚔️ Tyrion Lannister once said: ‘A mind needs books as a sword needs a whetstone.’ In fraud prevention, our minds need data, training, and technology as our whetstone. Real-time payments are not a losing battle, they are a chance to sharpen our swords and outsmart the fraudsters. #FinCrimeMythbusters #RealTimePayments #FraudPrevention #PaymentSecurity #FinancialCrime #AML #RegTech #PaymentInnovation #RiskManagement #FinTech

#FinTech | #Payments | #SupplyChain | #CrossBorderPayments : 🚀 Empowering Global Trade Finance Through ITFS Platforms 🌐 International Trade Finance Services (ITFS) platforms are revolutionizing trade finance by offering digitally-enabled, regulated access to global exporters and importers at competitive prices through a bidding mechanism. These platforms streamline trade finance solutions, including factoring, forfaiting, bill discounting, and supply chain financing—making cross-border transactions more efficient and accessible. The introduction of ITFS within International Financial Services Centres (IFSCs) is a game-changer, designed to address the financing gap for exporters and importers worldwide, including in India. With expanded eligibility criteria, the platform now welcomes payment service providers alongside financiers, exporters, importers, and #insurance entities. This allows for smoother currency exchange and faster payment processing in local currencies—saving both time and cost for participants. Key Highlights: (1) Permitted Financiers: Includes factors registered under the Factoring Registration Act, 2011, finance companies/units in IFSC, and others meeting specific guidelines. (2) Regulatory Compliance: All financiers must be incorporated in FATF-compliant jurisdictions with experience in financing or managing assets worth USD 5 million. (3) Capital Requirements: Financing entities must have a minimum capital of USD 5 million to ensure reliability and trust. With ITFS platforms, businesses can unlock new opportunities in global trade while bridging critical financing gaps. 🌍💼 EmpowerEdge Ventures

𝐓𝐢𝐦𝐞 𝐢𝐬 𝐧𝐨𝐭 𝐧𝐞𝐮𝐭𝐫𝐚𝐥—𝐢𝐭 𝐢𝐬 𝐞𝐱𝐩𝐞𝐧𝐬𝐢𝐯𝐞. 𝐖𝐡𝐞𝐫𝐞 𝐛𝐚𝐥𝐚𝐧𝐜𝐞 𝐬𝐡𝐞𝐞𝐭 𝐢𝐬 𝐝𝐨𝐢𝐧𝐠 𝐦𝐨𝐫𝐞 𝐰𝐨𝐫𝐤 𝐭𝐡𝐚𝐧 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬 and 𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐜𝐚𝐧 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐢𝐭𝐬 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐜𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐃𝐄𝐂𝐎𝐃𝐈𝐍𝐆 Hero Fincorp's DRHP The biggest driver of reported numbers here is not growth. It’s structure. Capital instrument design explains more volatility than operating behaviour. That is where attention should start. An instrument that changes profits without changing cash Inside Hero FinCorp, a large block of compulsorily convertible #preference shares plays an outsized role. 𝐋𝐞𝐠𝐚𝐥𝐥𝐲 --->> they sit within share capital. 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜𝐚𝐥𝐥𝐲--->> they behave like a liability. 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠-𝐰𝐢𝐬𝐞--->>they are measured at fair value through profit and loss. #FVTPL That combination matters. 𝐓𝐡𝐞 𝐃𝐑𝐇𝐏 𝐢𝐭𝐬𝐞𝐥𝐟 𝐪𝐮𝐚𝐧𝐭𝐢𝐟𝐢𝐞𝐬 𝐭𝐡𝐢𝐬 𝐬𝐞𝐧𝐬𝐢𝐭𝐢𝐯𝐢𝐭𝐲: if these instruments were treated as #equity instead of a financial #liability, reported #profits and #networth would look materially different — without any change in borrowers, collections, or credit costs. Only the accounting lens shifts. Time is explicitly priced into this capital The cost of this capital is not flat. For a defined period, the effective return is modest — around 3%. If a specified #capitalmarkets milestone is not completed within that window, the return steps up sharply — to approximately 16% until conversion. This is the part worth slowing down for. The structure does not merely encourage a timeline. It prices delay non-linearly. At that point, time is no longer strategic preference. It becomes an economic variable. Why this matters analytically Nothing about this mechanism: improves operating cash flows, or changes borrower behavior, or alters credit underwriting. But it does change incentives. When reported performance is sensitive to: instrument classification, and time-linked cost escalation, the first analytical task is separation. Separate what improved because the business improved from what moved because the structure was engineered to move. Balance sheets don’t just report outcomes. Sometimes, they shape them. #IndiaIPO #IPODecoded #UpcomingIPOs #IPOAlert #CPA #Finance #Economics #Nifty #IndiaGrowthStory #NSE #BSE

Bad FP&A: The variance report shows we're 12% over budget. I'll send out the standard email asking departments to cut spending. Great FP&A: I noticed the spending increase and mapped it against our growth initiatives. Here’s what I found: 80% of the overages are tied to high-ROI projects driving revenue. I’ve identified areas where we can optimize without cutting key investments. Let’s review this with the business partners and adjust our forecast. One reports numbers. The other tells the story behind them. FP&A can become the trusted advisor everyone turns to. Your job isn't to be the budget police. It's turning numbers into winning decisions. Reports don't drive success. Impact does.