How do you leverage the treasury expertise and best practices of both parties to create value and synergies?

Utilizing the combined treasury expertise and best practices from both parties opens up a realm of possibilities for creating substantial value and synergies. It's about seamlessly integrating diverse perspectives and approaches to optimize cash management, risk mitigation, and investment strategies. Collaborating in this manner not only fosters innovation but also enhances overall financial performance.

In both Banking and Finance and within the realm of Corporations, Treasury Management stands as a critical function. When it comes to a stage of merger or acquisition (M&A), the synchronization of treasury operations between two entities is very crucial. Initially, assessing the current state is important. In particular in understanding context such as how two organizations drive their operations by combining debt and equity. Their perspectives on cash vs. leverage, as well as strategies used for managing liquidity, play vital roles.

To leverage treasury expertise and best practices, foster open communication and collaboration between both parties. Share knowledge, exchange ideas, and discuss challenges openly. Identify areas where each party excels and combine their strengths to develop innovative solutions and optimize processes. Regularly review and evaluate joint efforts to identify areas for improvement and ensure continuous value creation.

Defining the future state of your treasury is like planning a new journey. After assessing our current state, we set clear strategic goals: optimize cash flow and strengthen capital structure. We identified key performance indicators like liquidity and debt-to-equity ratios to measure success. We adopted best practices such as centralized cash management and dynamic hedging. Reorganizing the team was crucial—we created specialized roles for cash management and risk assessment to leverage individual expertise. We also implemented a structured reporting system for clear updates on treasury activities. This transparency helped align our decisions with business strategies.

As a treasury management accountant, I've spearheaded strategic transitions by meticulously planning integration processes. Developing detailed roadmaps and timelines ensured smooth alignment of treasury functions. Prioritizing critical tasks like harmonizing bank accounts and payment systems, alongside allocating resources and ownership, facilitated efficient execution. Anticipating and mitigating potential risks during integration ensured seamless transitions, ultimately enhancing operational effectiveness and financial resilience.

In one of my roles, we merged with another company. The first step in planning the transition was understanding the unique strengths each treasury team brought to the table. For instance, our team excelled in liquidity management, while the other had a robust risk management framework. By recognizing these strengths, we could plan a transition that leveraged both.

In my opinion it works well to split the team in people doing daily operations and other peope only focussing on the transition and change management. You can do both but one somehow always gets priority neglecting the other. If you dont have enough manpower then hire a temporary interim manager; they also have the knowledge to do change and integration projects. (yes i am biased as i am an interim manager but speaking out of experience it also works..)

After integration, set up key performance indicators (KPIs) to measure success, such as reduced borrowing costs and improved cash flow. Regularly review these metrics and use data analytics to identify areas for improvement. Solicit feedback from your team to ensure the changes are effective. This continuous evaluation helps you fine-tune strategies and maintain alignment with your objectives.

Foster a culture of continuous improvement. Establish a feedback loop for team insights and hold regular brainstorming sessions. Invest in professional development, like attending industry conferences or pursuing certifications. Stay updated with the latest treasury management technologies and best practices. This proactive approach ensures your treasury function remains agile and adaptable.