Category

Cash & Working Capital

BankingCash & Working CapitalTalking Shop
March 18, 2021

Talking Shop: Do You Have One Banking Partner for AR and AP?

Member question: “In the US, do you have one banking partner for AR and AP, or do you split the business, with one bank for AR and a separate bank for AP? “For those that split the business, is this a share of wallet decision or an operational decision? Are there any operational pain points associated with having two banking partners?” Peer survey results: The majority of survey respondents use a single bank, with about one-third splitting the business. Peer…
Justin Jones
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Cash & Working CapitalTechnology
March 11, 2021

Future State: Data Lakes, Straight-Through Processing and APIs

Takeaways from NeuGroup’s TMS working group featuring discussion of automation, consolidation of ERPs and more.Straight-through processing (STP) that involves several systems, including payments and bank connectivity, sounds great. But members at a recent NeuGroup TMS Tuesday working group session agreed that efforts to accelerate STP first require a more detailed plan for the overall technology end state of treasury infrastructure. For example, one member said his company is still unsure if it would be best to further integrate all payment…
Justin Jones
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Capital AllocationCapital MarketsCash & Working Capital
March 11, 2021

Do Stock Buybacks Create Value or Just Return Capital to Investors?

Members at companies with excess cash discuss whether share repurchases generate economic value for shareholders.ConocoPhillips on Wednesday announced it is resuming its share repurchase program, citing its “long-standing priority to return greater than 30% of cash from operations to shareholders annually.” The company is not alone: A recent NeuGroup Peer Research Survey showed that 82% of respondents consider the return of excess capital the primary objective of their company’s share repurchase program. Only 9% said creating shareholder value was the…
Justin Jones
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Cash & Working CapitalInvestment Management
March 11, 2021

Counting Cash: Many Companies Will Maintain or Up Cash Levels in H1

An ICD survey also shows steady and growing use of money market funds and higher interest in ESG products.Cash on corporate balance sheets reached a record in 2020, topping $2 trillion, as companies responded to economic uncertainty created by the pandemic. New data from money market fund portal ICD suggests that a majority of corporates do not plan to cut cash levels in the first half of 2021. 61% of the 150 treasury clients surveyed by ICD plan to maintain or…
Justin Jones
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Cash & Working CapitalTalking Shop
March 2, 2021

Talking Shop: Holding Physical Cash ‘Under the Mattress’

Member question: For business continuity or emergency use purposes, are you holding any physical cash on hand at one of your sites?Peer Survey Results: “No” wins in a landslide.Peer answer: “Our US company does not currently keep any cash ‘under the mattress,’ however I do think there are some places around the globe that do have some . “I’m assuming you are asking this post-Fedwire disruption? Was anyone negatively impacted by that? I am wondering if anyone is preparing any…
Justin Jones
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Cash & Working CapitalTechnology
February 25, 2021

Bridging the Gap With A Hybrid Solution for Cash Flow Forecasting

One NeuGroup member’s solution for more accurate quarterly forecasting combines old school and new school.Accurate long-term cash flow forecasting may be treasury’s white whale, and while the hunt is certainly far from over, assistant treasurers at recent NeuGroup meeting heard about a solution for producing medium-term forecasts.Lack of balance. At the meeting, one AT told the group he is having issues balancing two standard methods for cash forecasting in the short- and long-term. The short-term system forecasts two weeks in…
Justin Jones
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Cash & Working CapitalTalking ShopTax
February 25, 2021

Talking Shop: Allowing Direct Debits for Payroll Tax

Member question: “For those of you who use ADP for payroll in the US, do you allow them to do direct debits on your bank accounts, specifically for payroll tax payments?” Peer answer 1: “We just converted to direct debit with ADP in the US. Happy to put you in touch with the team that evaluated and executed the project.” Peer answer 2: “We allow direct debits for both payroll and payroll tax. We fund to a separate, stand-alone payroll bank account that is…
Justin Jones
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Capital AllocationCash & Working CapitalCOVID-19
February 18, 2021

Cash Cushions and Covid: Retailers Not Yet Ready To Declare Victory

Retail treasurers returning to offense with share repurchases and dividends are proceeding with caution.A growing number of retailers in the NeuGroup Network are spending or preparing to spend some of the excess cash they raised at the beginning of the pandemic on share repurchases and dividends. But most treasurers at these retailers remain cautious and conservative as they return to playing offense—not surprising given that these companies were among the worst impacted by lockdowns and social distancing. Declare victory? “One…
Justin Jones
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Cash & Working CapitalTalking Shop
January 26, 2021

Talking Shop: What is Your Cash Flow Coverage Target?

Member question: “Looking to take a quick pulse of the group. What is your cash flow coverage target for your current fiscal year period? Coverage can be defined as hedges placed vs. earnings exposure estimate or maximum hedge accounting capacity. “Our cash flow hedges are currently covering ~70% of our entire estimated earnings exposure (which closely aligns with our max hedge accounting capacity). This is up significantly from two years ago and is the culmination of a huge effort. Wanting…
Justin Jones
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Cash & Working CapitalCOVID-19
January 19, 2021

Sign of the Times: Retailers Say Coin Shortage Worries Persist

Burned by a dearth of coins during the pandemic, many retailers are cautious despite some signs of stability.“Cash-mageddon” is how one member at a recent meeting of NeuGroup for Retail Treasury described the havoc wreaked by the coin shortage that made life hellish for many retailers last year. And despite signs of normalization and increased production by the US Mint (see below), some members remain unconvinced that the coin supply disruption caused by the pandemic is truly over. Cautious about…
Justin Jones
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