How to Master the Strategic Treasury Function w/ Francisco de Barros

How does a treasurer at a global industrial conglomerate handle the FX exposure? We asked Francisco de Barros (FB), Assistant Treasurer at Ingersoll Rand, to uncover the secrets of such a complex business model. He came to our podcast to discuss with our host Agustin Mackinlay (AM) Treasury from a strategic perspective, the role of technology in improving Treasury efficiency, and the importance of liquidity management.

Read on to discover some takeaways from this episode.

Currency management: general views

AM: What's the typical day of an Assistant Treasurer at a large multinational company with presence and sales in more than 100 countries?

FB: What I like best about Treasury is that no day is the same. Every day is a little bit different. On a typical day, we start with a catch-up of what has happened overnight and we have to follow the same model from a cash management, from credit risk management and capital markets perspective. This means getting up to speed on what has happened or may have happened overnight that may have been missed, like looking at your morning cash position and making sure there is no liquidity there.

And then kind of blocking and tackling what you have for the day, either be on capital markets, operational efficiencies, risk management and also work with senior management to understand how to improve Treasury as a business partner. The end goal is to deliver the strategy of the company, which now is becoming a bigger and bigger part of the strategic picture.

Treasury from a strategic perspective

AM: How do you make sure the Treasury is more than a merely operational function inside the firm?

FB: The Treasury team has become a strategic partner inside the firm to drive costs out from a bank perspective, and from a financial perspective. And also help to support supply chain finance programs. So it is a multi-pronged approach that helps lower the variability of free cash flow, which is at the very heart of issues like the high cost of capital and firm valuation.

We go from purely transactional to a lot more strategic, as looking at Treasury you have three pieces, you have the cash management, which is the foundation, then you have the debt in capital markets, and then you have the corporate finance. And that's where Treasury focuses on, looking at the expected return for the M&A, what’s the cost of capital, does it make sense?

So we are not just helping to fund, but we are being active, and participating in the discussion, to figure out if it makes sense from a capital allocation perspective.

The role of technology

AM: What is your view on the use of technology like application programming interfaces or APIs to improve the efficiency of Treasury operations?

FB: I tend to like technology by nature, so I try to push innovation within my team. We have to be the best at what we do, but I keep an eye out for new trends because there's an opportunity for us to perform even better with fewer resources. This means we are always raising that bar.

And I also think there's a need to help people to grow and develop, which is another important aspect that I normally talk about. It is an opportunity for someone within the team to learn something new and try to develop their skills. And when you bring technology like APIs into the Treasury function you can do a better job than with those very generic programs.

So I think is always good for anyone trying to be a market disruptor and I always try to get involved with the latest technology to see how it makes sense or if it can contribute to our team.

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