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[The Global Treasurer]

Five reasons why FX integration with treasury operations is a must

Stephen Hubble, Chief Analyst at treasury management specialist Centtrip, outlines five reasons why FX should be integrated within treasury operations.

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A currency strategy and ability to accurately forecast are critical for businesses looking to manage foreign exchange risks and minimise potential negative impact on their bottom line.

Forecasting exchange rates is never an exact science, especially in the light of ongoing Brexit talks, trade tensions and a global economic slowdown. However, in times of extreme uncertainty there are actions businesses can take to reduce these risks – and FX integration within treasury operations is a starting point. Here are five reasons why:

1. Simplify your bank account structure

Adopt account structures that match your business flows and reduce the number of accounts, where possible. Keep open only the essential ones. If you are based in Asia and your functional currency is the US Dollar, using an Australian Dollar account is impractical as it is more cost effective to make payments out of the functional, US Dollar account.

Today’s technology allows you to simplify your bank accounts structures by holding one multi-currency account with a bespoke “sub-account” hierarchy for centralised cash management yet provides you with tailored reporting options to view specific business activities and transactions. (…)

Read the article in full: The Global Treasurer

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