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Size does matter…when it comes to treasury

by Graceanne Bowe

November 11, 2010

Seems obvious, doesn’t it?  However, CFO’s Today in Finance newsletter article, “Treasury: Bigger is Better,” suggests that it’s not all about the total amount of money—it’s about how productively and cost effectively the treasury department is managed.  And according to the article, the larger, publicly held companies are winning. Large companies spend roughly 32 cents per $1,000 on the treasury function, while smaller companies’ treasury costs can exceed that amount by up to 75%.   Larger companies may also do better because they are able to reduce the cycle times required to complete critical tasks, such as short-term cash flow forecasts and resolution of bank discrepancies.

While there are many factors that influence a large company’s ability to outperform small companies when it comes to treasury management, the article points to a large company’s use of sophisticated IT systems as a critical advantage.  Since these systems can process large numbers of transactions faster, personnel are freed up to focus on more strategic tasks.  Companies running these systems have an opportunity to realize tremendous gains in their treasury activities.

This has not gone unnoticed by the conference program team at SAPinsider.  This week at Financials 2010 in Barcelona, SAP customers have an opportunity to learn how to wield their SAP ERP systems to drive efficiencies in treasury management and reduce risk.  Yesterday, Endeca Technologies shared its strategies for streamlining c ash flow and achieving accurate short-term cash flow forecasts.  This afternoon, leading pharmaceutical manufacturer AkzoNobel  will discuss how it is using SAP Treasury and Risk Management to set up a global in-house bank  and payment factory to centralize its liquidity and risk management processes and rationalize its bank account structure.  And tomorrow, leading consultancy Zanders Treasury and Financial Solutions shares very practical tips for optimizing SAP treasury solutions and integrating them with your FI and external banking solutions to effectively track the movement of cash in and out of your organization.

At a time when the economic picture is somewhat precarious, large companies can take comfort in the fact that their size and investments in SAP technology can give them an edge when it comes to treasury and risk management.

If you missed Financials 2010 in Barcelona, you still have another chance to take advantage of treasury and other financials education at Financials 2011, March 8-11 in Las Vegas. Visit

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