This year’s June 30 audit process could expose problems caused by the migration of treasury back office functions to shared services accounting teams in New Zealand or offshore, according to expert treasury outsourcer, ETOS. The move to shared services is good ‘cost out’ strategy on paper, which often falls short of meeting the specialist operational knowledge required to deliver these services in practice.  Savvy treasurers understand this issue but feel they have no control over teams that sit outside of the treasury function and lines of reporting.

Downstream issues such as failed, or delayed settlements, reduced capacity for segregated reporting can have a direct impact on company governance and financial risk at a time of market volatility and financial stress. Corporates like T&G Global, Nissan NZ and Coca Cola Amatil have found that an outsourced model addresses these issues while weighing more lightly on the bottom line.

How aware is your team?

We understand that treasury teams are often shared resources with accounts or other business units.  Even so, it is still critical that team members have the specialist knowledge to understand the whole picture behind what they’re doing versus simply knowing which actions to take.  If your team lacks product understanding (e.g. the key components of an (Interest Rate Swap) they could fail to appreciate the downstream implications of any errors introduced into your TMS.

There needs to be a common understanding of the operational side of the treasury systems used within your business across the treasury team.  Training and knowledge transfer are critical.  Good systems knowledge within the team also adds clarity and integrity to day-to-day operations, so training is often a win/win.  When it comes to audits, the buck stops with the CFO.  Having a strong, well-trained operational team will help to prevent any serious audit points against the business.

Key man risk and segregation of duties

Key man risk often moves quickly into focus when staff members leave, but this risk should also be a central focus pre-audit.  If a large proportion of your treasury knowledge is held by one individual, critical internal controls could be missing, leaving your organisation open to human error and fraud.

One way of introducing clear segregation is to outsource the operational side of your treasury workload.  ETOS performs this service for a wide range of clients. Our services are completely independent, and our team has the critical mass to completely segregate middle and back office duties.  Leaving senior treasurers to focus their attention to company risk management and strategy

Need some help?

If you are concerned about your upcoming audit from a control, procedural, people or system perspective, the ETOS team can carry out a quick-fire review of your key systems and information.  This will help to trouble shoot and keep your business one step ahead of any major issues.

We can also review and document procedures, provide TMS expertise and staff training and supply outsourced, best practice segregation in a way that works within your business constraints.  With the key areas covered, you’ll find it easier to relax during the audit season.

If you’d like discuss ways of tightening up your operational procedures, segregation of duties or filling in gaps in your team’s treasury knowledge, feel free to contact us and we can set up a time to talk.