benchmarking for treasury · how to use kpi’s a key performance indicator (kpi) is a measurable...

Advising Clients, Informing the Industry. Connect on StrategicTreasurer.com

Benchmarking for Treasury

© 2018 Strategic Treasurer LLC.

Ben Haws, Senior Business Analyst, Axletree Solutions

Surveys By Strategic Treasurer

What Gets Measured Gets Managed

Friday June 1, 2018

Advising Clients, Informing the Industry.

Connect on StrategicTreasurer.com



2

About the Presenters

Benjamin Haws

Senior Business Analyst

Axletree Solutions

Ben Haws is a Senior Business Analyst and a SWIFT subject matter

expert at Axletree Solutions. Throughout his tenure with Axletree, he has

been working closely with internal and external experts to develop a deep

understanding of SWIFT and how it applies to streamlining treasury

operations. Currently, Benjamin is enrolled at Rutgers University as a

MBA candidate. He is a FinTech and treasury enthusiast.



3

Topics of Discussion


Introduction to Benchmarking

Why You Should Care About Benchmarking

Benchmarking KPIs: CLM, Forecasting, & Treasury Operations

How to Decide Which KPIs are Most Important to You

Final Thoughts






4

Background: Defining Key Terms

World Class Practices – practices employed are top of the line across the board

Leading Practices – practices are above industry average and exceed expectations

Standards of Good Corporate Conduct – practices implemented meet expectations

Below Average – the majority of metrics & KPIs are behind industry averages.

Failing – almost all metrics are significantly behind industry averages





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How Standards Change Over Time

Leading Practice

Standards of Good Corporate Conduct

Target Range

Unacceptable

Level of Practice

Time

World Class Practices





6

How to Use KPI’s

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a

company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching

targets.

Treasury KPIs:

• Percentage of accounts where daily visibility has been achieved

• Hedge Effectiveness

• Accuracy of cash forecasts 1 week in advance, 1 month, etc.

• Funds Transfers: speed at which funds clear





7

Bank Account Management

51%

22%

14%

4%

8%

0%

10%

20%

30%

40%

50%

60%

Process is current, recordsare current.

Process is current, recordsare somewhat out of date.

Process is out of date, butour records are current.

Both process and recordsare out of date.

Unsure

2017 Treasury Fraud & Controls Survey underwritten by Bottomline Technologies

Describe your BAM Status. Our Bank Account Management process and records: 1





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Why Should I Be Thinking About Benchmarking

• Comparison results in growth &

more effective goal-setting

• Better understand strengths and

weaknesses of the firm over

industry

• Set objectives based off of key

industry metrics





9

Reconciliation

14%

21%

12%

9%

12%

33%

0% 5% 10% 15% 20% 25% 30% 35%

100%

90% - 99%

75% - 89%

50% - 74%

25% - 49%

< 25%

24%

21%

17%

11%

5%

22%

11%

24%

16%

12%

9%

28%

0% 5% 10% 15% 20% 25% 30%

100%

90-99%

75-89%

50-74%

25-49%

<25%

2017 2016


What percentage of your bank accounts are reconciled on a DAILY basis? 2

What percentage of your bank accounts are reconciled on a WEEKLY or more frequent basis? 3





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KPIs for Treasury: Cash Lifecycle Management

Safety

• Number of control events

• Credit quality

• Cash visibility

Cash Availability

• Number of unplanned overdrafts





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Visibility


How frequently is your global cash position updated? 4

What percentage of your operating bank accounts do you have visibility to on a daily basis? 5

10%

52%

19%

15%

3%

0%

10%

20%

30%

40%

50%

60%

Real Time Daily Weekly Monthly Other

30%

27%

22%

7%

5%6%

0%

2%

0%

5%

10%

15%

20%

25%

30%

35%

100% 90-99% 75-89% 50-74% 25-49% <25% 0% Unsure





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KPIs for Treasury: Cash Lifecycle Management

Cost

• Total cost of processing payments;

internal and external

• Total cost of processing collections;

by type

Idle Cash

• Cash concentration

• Cash visibility





13

KPIs for Treasury: Forecasting

Accuracy of Forecasts

Ability to generate forecasts weeks, months, years in advance

Ability to generate forecasts for business units, subsidiaries, individual projects, organization

Ability to generate forecasts for business units, subsidiaries, individual projects, organization



What Gets Measured Gets Managed 14

KPIs for Treasury: Treasury Operations

FTE Staff Levels

Cycle Times

Throughput

Departmental Cost





15

Deciding Which KPIs are Most Important

What are your core treasury objectives?

What areas would you like to see improvement in?

Are there any areas where you’re unsure of how you stack up in the market? (i.e.

strength of forecasting, use of technology, etc.)

What treasury objectives conflict with those of another department?





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Who Should I Be Comparing My Firm With?

Key Competitors

Complexity Region

Revenue Industry

Market Vertical





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Sample Data Points: Treasury Functions

86%

79%

71% 70%

62% 61% 61% 61% 59%57%

53% 53%50%

43%39%

34%

29%

17%

1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

What functions do you use or need in treasury? (Select all that apply) 6





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Sample Data Points: Treasury Functions

How much of the available TMS functionality that you purchased are you using? 7

What types of payments do you process through your TMS? (Select all that apply) 8

9% 9%

19%

22%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

<20% 21-40% 41-60% 61-80% 81-100%

58%

40%

18%

10%

16%

6%

37%

0%

10%

20%

30%

40%

50%

60%

70%

Wire /RTGS

LowValue /ACH

LowValue /SEPA

LowValue /Other

Checks Card We donot makepaymentsthroughour TMS





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Final Thoughts for Treasury

Measure. If firms are to grow, it is imperative they have a set of measurable objectives for

gauging success

Benchmark. Benchmarking one’s position against competitors or firms of similar build is an

excellent method to begin measuring your success and position vis a vis others

Contrast. Once you have benchmarked your performance against others, identify your target

performance level

Context. Do not forget the bottom line: Cost efficiency of Treasury Operations



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Contact Information


Technology Tune-UpCash Forecasting: No Longer a Bridesmaid 20

Contact Strategic Treasurer Co-hosted with GTreasury

Thank you for participating in this event!

Benjamin HawsSenior Business Analyst

Axletree Solutions

Email: [email protected]

Direct: +1 732.296-0001

Strategic Treasurer Senior Consultant

Strategic Treasurer

Email: [email protected]

Direct: +1 (678) 466-2233

mailto:[email protected]

mailto:[email protected]





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Works Cited

1. 2017 Strategic Treasurer & Bottomline Technologies Treasury Fraud & Controls Survey.



4. 2017 Strategic Treasurer & Bottomline Technologies Cash Forecasting & Visibility Survey.

5. 2017 Strategic Treasurer & Bottomline Technologies Cash Forecasting & Visibility Survey.

6. 2017 Strategic Treasurer & TreasuryXpress Treasury Technology Use Survey



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