Why (and How) Treasury & Finance Must Get Outside the Box

Jul 08, 2015
Jeff Glenzer CTP, Vice President and Chief Operating Officer, AFP

With so much going on in treasury and finance these days it’s difficult to see a pattern or a trend. But three recent, and seemingly random events, caught my eye.

1. Microsoft explained to my AFP colleague, Andrew Deichler, how treasury and finance teams can find common ground with IT departments.

2. Attendees at AFP’s FP&A Leadership Summit told how they explain financials to their non-financial colleagues.

3. The Wall Street Journal, citing a Citigroup report, declares “[t]he market is favoring corporations that return more of their cash to shareholders than what they invest in capital.” (Subscription required.)

The first item features the relationship between finance and IT. The second concerns financial planning and analysis professionals and how they inform and influence other departments. The third cites a bank study on the current demands of investors. What’s the pattern?

Namely this: Whether the subject is technology, forecasting or investor relations, treasury and finance professionals must actively seek new ways to collaborate outside their department and traditional roles.

Too often—and I’m as guilty of this as anyone—we get caught up in our daily routine. We fixate on short-term deadlines. We don’t walk around and talk to our peers to find out their challenges—or even build a rapport. We don’t step back and think of new ways to support business units or corporate strategy.

These missteps ultimately hurt our organizations. When we treasury and finance professionals don’t think about advancing our organization’s mission we aren’t doing our jobs correctly. Preparing a numbers-heavy report or monitoring existing treasury and finance processes is the least that we can do. It isn’t how we add the greatest value to the organization.

So what should we be doing? Let’s return to the three events listed above.

  • When was the last time you spoke to someone in IT? More critically, when did you last approach IT and propose that the two groups sit down and figure out ways to innovate rather than cut costs?
  • Do your financial reports actually tell a story? One that colleagues from a non-financial background understand? One FP&A Summit attendee noted: “Too often FP&A will say the obvious: ‘You didn’t make your projections.’ People want to know what they should do.”

Activist shareholders may well be a new risk item for treasury and finance, forcing organizations to abandon capex in favor of dividends and buybacks. What can your treasury and finance group do to support senior management on analyst calls? Can you make the data tell a compelling story to support corporate strategy?