Health Check and treasury operational riskWhen it comes to identifying operational risk, the team at ETOS has more experience than most.  Working with some of New Zealand and Australia’s biggest corporates and high profile medium-sized businesses, ETOS personnel are used to running trouble-shooting treasury ‘health checks’. 

These reviews help companies to identify inefficiencies, close down risk, strengthen controls and increase treasury productivity.  ETOS CEO, Lesley Mitchell outlines some common areas of concern.

Does all your treasury information rest on one pair of shoulders?

Unsurprisingly, the retirement of long-serving staff members is often the catalyst for businesses to really focus their attention on key person risk.  Alarm bells should ring loudly when only one person really knows the structure, functions and processes that support a treasury department.  Don’t wait until that person gets sick, goes on extended leave or retires.  Transitioning seamlessly from one knowledge-holder to several requires a sound plan and a reasonable timeline.  Start now.

Do your workflows retain sufficient segregation of duties?

This is a common starting place for many auditors.  Often the volume of treasury operations work does not justify the correct number of staff to ensure segregation of duties.  Many businesses turn treasury roles into an additional part of the job description of accountancy staff.  This can lead to under-qualified personnel performing important, if non-core, treasury functions without fully understanding the implication of errors or delays.

If this sounds like your business, consider outsourcing your middle and back office function.  This is a cost-effective way of gaining sufficient segregation of duties plus the treasury-specific expertise your business needs – and you only pay for the man hours you require instead of a full-time salary.

Do you have a procedures manual?

Does the left hand of your treasury department know what the right hand is doing?  In smaller companies, the same function can be performed by a large number of people across multiple divisions who each hold their own procedures.  This often leads to inefficiencies and duplication – loading cost onto treasury operations.  Capturing key treasury information and processes in a central procedure manual is a logical place to start.  Also consider moving away from a paper-based system to a more automated one.  This will create better transparency around day-to-day systems and reporting.

ETOS has worked with a number of large and small organisations to help them document and improve operational workflows by introducing concise, practical procedures.  We have the experience to set up processes that are strong on control without allowing them to become over complicated or hamstrung by compliance.

Spreadsheets – is it time for system integrity?

The ‘owner’ of a spreadsheet is often the only person who really understands the structure and formulae to maintain it.  We commonly find multiple errors on spreadsheets which often compound key person risk.  Taking processes away from being manual and paper-based, introduces system integrity and strengthens controls.

Are your people and systems working efficiently?

In our experience, most treasury teams simply don’t have the time to invest in learning to use their treasury systems to full capacity; including reporting, risk management and integration with other risk functions.  Out-sourcing treasury operations can also help here.  ETOS staff fully understand the leading TMS’s and can help to ensure systems and operations are working efficiently and to best practice.

Business Continuity/disaster recovery plan – where’s your back-up?

This isn’t just something that kicks in when a civil defence emergency takes place.  What happens when treasury people are away sick or on holiday?  Does your treasury team stress when it comes to arranging leave?  We often find that settlements staff are reluctant to go away because it is so hard to catch up on their return.  Many businesses use ETOS as a holiday back-up service because we are available all-year round and can efficiently step in to offer cover when staff are due their well-earned breaks.

Have treasury controls kept pace with your business environment?

The pace of change in most businesses is on the increase, so how do you ensure that processes and systems keep up?  Some key risk indicators are:

  • Do you actively monitor and record risks?
  • Are you using paper-based or automated systems as your ‘centre of truth’?
  • Payment processing methods – are you keeping up to date with innovations like straight through processing?
  • How often is your Treasury Policy reviewed?   How is it being followed and benchmarked against?

Often having an external, expert review of treasury processes can highlight opportunities for strengthening processes and controls that are easy to miss when you are tied up in the day-to-day of treasury operations.  This can often be done at a cost that is repaid many times over by more accurate and compliant processes.

Reduce your company operational risk

So don’t wait until Bob retires or heads off on holiday to review your treasury operations.  ETOS can provide a ‘health check’ service that will document observations of current workflows, recognise potentially simple system improvements, deliver greater efficiencies, analyse operational costs and provide treasury expertise gained across a wide range of businesses in New Zealand and Australia.

If you’re interested in finding out more about the health of your treasury operations, call ETOS on 09 917 3476