Finance and the value chain
way without running a pooling operation. ‘The company is not big enough for a large in-house treasury team,’ he explains, ‘but the outsourcing teams have a certain professionalism that brings higher rewards.’
sign into the accounts from anywhere in the world via the web. ‘I spend my life travelling,’ he says, ‘and I need to authorise transactions online rather than looking for a terminal.’
Benchmarking their outsourced operation against other options such as utilising the money markets, the CFO says that outsourcing improves the company’s returns.
There are two sides to the liquidity story, according to Bridges. The first is ‘survivability’, the power of cash to keep a company afloat. Visualising and managing liquidity is part of this aspect. The second half is about understanding where your profits come from, and the
Centralised visibility remains an important issue for Bridges. ‘The key for
‘If you ask why most companies get into trouble and face receivership, it’s usually liquidity rather than trading issues.’ us is that the IT systems allow you to see group cash and ensure deposits are placed efficiently overnight,’ he says. Bridges says the best solution – webbased with a multi-bank overview – is almost within reach. Ideally, the solution will have better connectivity when users
potential returns they offer your business. For Bridges, the post-crisis profit effect seems ‘weirdly decreased’, given the effort that finance directors have invested in their business. Nevertheless, ‘it might be less important at the moment but, when higher investment returns come back, liquidity will be very important again.’ ■
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Essentials • Explain the profit implications of terms of trade to everyone in your organisation. • Visualise and manage your cash flows with attention to detail. • Know your core business, understand how and why you make profit and instate disciplined pricing. • Monitor treasury activity in your organisation with regular meetings.
Stuart Bridges Stuart Bridges is the chief financial officer of Hiscox, an international insurance group, that has operations in the UK, Europe and the US. He joined the company in 1999 and is one of the company’s four executive directors and is a chartered accountant.
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