Treasury management

Performance-driven solutions
Summary
Organization and governance 5
Performance assessments:
towards best practice 6
Financial risk management 8
Cash and liquidity management 9
Corporate funding 10
Financial instruments valuation
and accounting 11
Treasury technology 12
Assurance and control 13
Contacts 14
The evolving treasury function
A challenging context
The demands on corporate treasury departments are subject to
constant change with, for instance, an increasing requirement of
shareholders for companies to demonstrate how financial
resources and financial risks are managed. These requirements for
increased transparency and control have led to a global trend
toward centralization of treasury activities. In addition, treasurers
need to cope with a growing complexity of financial instruments,
ever more volatile financial markets and the introduction of new
regulations and accounting practices. For treasury, this means that
you need to update continuously your know-how, to ensure
reduction of costs, minimize volatility, bring value to the company
and ensure short and expansive lines of communication.
Your goals our mission
We will help you to define clearly the responsibilities of treasury
and to engage further in supporting the business. We have the
required know-how and expertise available for all the important
topics of treasury (for example, cash and liquidity management,
financial risk management, accounting, system utilization). In
addition, we will confirm whether the internal control environment
of your treasury is in accordance with statutory requirements and
market practices.
More than ever, it is important to adopt an integrated holistic
approach instead of pursuing temporary solutions for individual
issues.
Our offer
The growing demands on the treasury function are driven to a
large extent by the current market situation. They are associated
with a heightened awareness of management for operational and
financial risks, focused on the following themes:

Improvement of cash-forecasting quality and methodologies for
liquidity management and financial planning

Management of derivatives, market price and counterparty risks

Accounting and valuation of all treasury transactions
In parallel, there is continual pressure to improve the efficiency of,
and control over, treasury.
Ernst & Young provides you with a portfolio of services that cover
the full scope of a treasury function. We have a knowledgeable
team, with the right combination of treasury skills and experience
to support your treasury through all types of challenges.
Topics
Our primary Treasury services cover the following areas:

Treasury organization & governance

Treasury performance assessments

Financial risk management, (interest, FX, credit and commodity
risks)

Cash and liquidity management including cash forecasting

Corporate funding and capital management

Treasury technology, including Treasury Management System
TMS selection and implementation

Valuation and accounting for financial instruments (IFRS and
local GAAP)

Audit, Quality assurance & compliance
Your benefits

Integrated service offering

Powerful, customized approaches

Rapid, sustainable knowledge transfer

Solid process embedment

Holistic perspective

Profit from Ernst & Youngs global Treasury network and
multinational team
Which service offers you the competitive
advantage?

Self Assessment using our proven analytical methodology

Analysis of potential improvements, based on your current
situation

Individual approaches to address any weaknesses identified

Quick check of accounting policies and hedge relationships
Make an appointment and talk to us. We are happy to inform in
detail about how we can help you drive your treasury forward.
I
m
p
le
menta
tio
n
P
l
a
n
n
i
n
g
S
trategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Assurance
& control
Treasury
technology
Valuation &
accounting
Corporate
funding
Cash - and
liquidity
management
Financial risk
management
Performance
assessments
Organization
& governance
3 Ernst & Young Treasury management
Organization and governance
Organization
& governance
Performance
assessments
Financial risk
management
Cash - and
liquidity
management
Corporate
funding
Valuation &
accounting
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Choosing the right organization
With the increasing importance of treasury,
companies must choose a robust and
dynamic organizational structure. In
particular, a well thought-out strategic,
forward-looking approach is essential. This
begins with choosing the right operating
model. In order to do this, the scope of
activities that are covered by the treasury
Department and the degree of
centralization must be determined. Does
treasury execute only the most necessary
activities such as liquidity management or
if treasury is determined a core
organizational process does it cover the
full range of services? This must be taken
into account when designing the optimal
hierarchical structure of the central and/or
local treasury functions.
Reorganization and
transformation
Due to changing circumstances, e.g,
transactions such as mergers and
acquisitions, carve outs, spin offs and as
part of reorganization projects such as
enterprise resource planning (ERP)
implementation and centralization of
treasury functionality, a reformulation of
the organizational structure, processes and
financial risk management is needed.
Our services
Using a gap analysis of your current
treasury structures compared with the
requirements according to your strategic
objectives, we make recommendations for
choosing the right organization and
optimizing the treasury function. This leads
to, inter alia, improved communication and
reporting processes and identifies process
duplication and redundancies.
We accompany you along the whole
process: from definition of objectives to
implementing a new or revised organization
of the governance structure and underlying
processes.
Current state analysis

Analyzing the current state compared
with leading practices and established
control requirements

Assessing the systems and
methodologies, focused on identification
of potential improvements
Future state development

Defining the target organization given
the objectives, identifying leading
practices that are both fit for purpose
and focused on value optimization

Defining, updating or standardizing
policies, processes and procedures for:
Banking network (banking selection
and rationalization)
Cash management (pooling/ netting)
Short- and medium-term financing
(e.g., factoring and securitization)
Financial risk management (strategy
optimization)
Treasury accounting

Defining and adjustment of (key)
management indicators

Selecting and implementing TMS(s)

Defining roles and responsibilities, job
descriptions and provide assistance
towards recruitment and/or secondment
placement
Implementation support

Project planning and management
(objectives, resources, milestones)

Identifying and implementing quick
wins

Assist with planning and implementation
of a rollout of the new global structure

Additional organizational knowledge
through workshops covering operations,
accounting, finance, legal, tax services
and information systems

Interim staffing of operational or control
functions (when allowed)
Your benefits

Realignment of the treasury to meet
current and future economic and
regulatory requirements

Realization of potential synergies and
efficiencies by optimizing treasury
processes
5 Ernst & Young Treasury management
Performance assessments:
towards best practice
Performance
assessments
Organization
& governance
Financial risk
management
Cash - and
liquidity
management
Corporate
funding
Valuation &
accounting
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Key factors Basics Developing Established Leading class
Policies and
procedures
Informal policies and procedures not
documented.
High level policy statements setting out central
treasury activities. Limited documented
guidance on local treasury activities and
incomplete procedure documentation.
Well documented group treasury policy and
procedures. Limited policies and procedures
on treasury activities in local business units.
Comprehensive policy document for group
treasury and the business units.
Governance
Treasurer or group FD responsible for all
aspects of treasury. No compliance monitoring
or internal audits.
Regular reporting to the board on treasury
activities. Internal audits not performed by
treasury experts. Minimal compliance
reporting.
Treasury compliance regularly monitored and
reported to the board and/or the relevant
treasury/finance committees. Regular internal
audits using external treasury sprecialists.
Treasury activities monitored by and treasury
strategy approved by Board or board
subcommittee. Regular internal audits by
treasury experts with treasury self
assessments.
Structure
Decentralised treasury structure with local
businesses responsible for managing their own
treasury activities. Little/no interaction
between Group Treasury and Group
companies.
Centrally managed funding with businesses
responsible for managing local treasury
activities. Some interaction between Group
Treasury and Group companies.
Centralised treasury with clear guidelines
governing any local treasury operations.
Communication between group treasury and
group companies on an informal basis.
Centralised treasury with all treasury activity
managed by group treasury (as far as
possible). Regular dialogue between group
treasury and business units.
People and skills
Treasury activities are performed by personnel
with little or not treasury experience. Treasury
usually performed by finance staff on part
time basis.
Dedicated treasurer with inexperienced
assistant(s) and support staff.
Experienced and established team with
appropriate professional qualifications/
qualified by experience in key positions. Good
knowledge of all aspects of treasury and of the
companys business.
Experienced and qualified professionals in all
key positions within treasury. Good knowledge
of treasury activities and experience of
working in a multinational treasury function.
Treasury function maturity
Current state analysis
Our performance assessment can be the
first step towards developing a risk-and
profit-oriented, comprehensive view of
your treasury activities. Based on our
treasury experience and peer comparison
in the market, we identify potential points
for improvement and further development
potential.
The thorough investigation of structures
and processes and their comparison with
the legal framework and market practices
are the foundation of our treasury
advisorys holistic approach.
Our services
Ernst & Young has developed a specific
framework for assessing functional
performance of a treasury department,
which is based on our global experience with
treasury organizations, regular treasury
projects and client surveys. In addition,
external benchmarks and guidelines are
taken into account, for example, from local
Associations of Corporate Treasury, IFRS7
and the local Corporate Governance Code.
The many facets of corporate treasury
require a practical and pragmatic
interpretation of relevant regulations, which
need to be considered in the broader context
of the complexity and risks of the company.
Taking into account external market trends,
as well as our extensive industry
experience, we have developed a compact
corporate treasury checklist that allows a
comprehensive benchmarking against
leading practices and provides a quick
insight into potential improvements.
In addition, the maturity of the treasury
function is assessed compared with well-
established, leading treasury
organizations, while taking into account the
firm-specific characteristics.
6 Ernst & Young Treasury management
Company XYZ: Treasury management Process Effciency Maturity Assessment Dashboard
The main themes covered in a Treasury Assessment are:

Treasury organization, strategy and systems

Integration into the companys strategy, rules and responsibilities

Management of financial risks (e.g., interest rate, currency and
commodity risks)

Liquidity and cash management

Internal control

Performance measurement

Reporting
Your benefits
Based on the analysis, you receive an assessment of your treasury
organization compared with leading practices, with individual
recommendations for potential further improvements and
significant risks.
This assessment enables you to determine priorities and if
applicable define an action plan, for implementation
7 Ernst & Young Treasury management
Weighted scores Maturity profile Weighted
Dimensions Current
state
Future
state
Leading
practice
Operational strategy 2.0 3.0 5.0
Process & policy 3.0 4.0 5.0
People &
organization
2.0 3.5 5.0
Technology & data 3.5 4.0 5.0
Performance
management
3.0 3.0 5.0
Vertical maturity
index
3.0 3.5 5.0
Vertical maturity
index (%)
60.0% 70.0% 100.0%
Cperational
strategy
Process
& policy
People & organization Technologie & data
PerIormance
management
1
2
3
4
5
;mjj]flklYl]
>mlmj]klYl]
D]Y\af_hjY[la[]
+&(
-&(
+&-
E
Y
l
m
j
a
l
q

k
[
g
j
]
Raw Equal dimensions Maturity profile Raw Equal dimensions
Dimensions Current
state
Future
state
Leading
practice
Operational strategy 2.5 3.0 5.0
Process & policy 3.0 4.0 5.0
People &
organization
2.0 3.0 5.0
Technology & data 4.0 4.5 5.0
Performance
management
3.0 3.5 5.0
Vertical maturity
index
3.0 3.5 5.0
Vertical maturity
index (%)
60.0% 70.0% 100.0%
Cperational
strategy
Process
& policy
People & organization Technologie & data
PerIormance
management
1
2
3
4
5
;mjj]flklYl]
>mlmj]klYl]
D]Y\af_hjY[la[]
+&(
-&(
+&-
E
Y
l
m
j
a
l
q

k
[
g
j
]
Raw scores Equal questions Maturity profile Raw Equal questions
Dimensions Current
state
Future
state
Leading
practice
Operational strategy 3.5 4.0 5.0
Process & policy 3.0 4.0 5.0
People &
organization
2.0 3.0 5.0
Technology & data 4.0 4.5 5.0
Performance
management
3.0 3.5 5.0
Vertical maturity
index
3.5 4.0 5.0
Vertical maturity
index (%)
70.0% 80.0% 100.0%
1
2
3
4
5
Cperational
strategy
Process
& policy
People & organization Technologie & data
PerIormance
management
;mjj]flklYl]
>mlmj]klYl]
D]Y\af_hjY[la[]
+&-
-&(
,&(
E
Y
l
m
j
a
l
q

k
[
g
j
]
Financial risk management
Financial risk
management
Organization
& governance
Performance
assessments
Cash - and
liquidity
management
Corporate
funding
Valuation &
accounting
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Financial risk management
Strong market volatility, constant evolution
of the international accounting standards
and increasing importance of financial
reporting prompt companies to improve
regularly their financial risk knowledge and
to optimize its management. In this
environment identification of risk drivers
and exposures, definition of risk
management policy and implementation of
appropriate management tools,
communication lines and reporting are the
key means to enable effective financial risk
management.
Treasury and financial derivatives
In order to control financial risks, most
treasury departments, inter alia, use
financial derivatives. The hedging
strategies need to be aligned with the
overall objectives of the company, while
ensuring that valuation methods for
derivatives do not lead to unwanted
volatility of profits. In addition, a consistent
separation of functions in risk management
and appropriate monitoring systems are
needed.
Major risks
The key financial risks that treasury needs
to identify, quantify, manage and monitor
are liquidity, FX, interest rate and
counterparty risks. An increasing number
of companies are also active in commodity
or energy risk management.
Our services
Based on our extensive experience, we
provide advice and support for all elements
of financial risk management, for example:

Identifying the main sources of financial
risk exposure and measuring the
companys natural hedging
effectiveness

Co-developing a strategy for financial risk
management within the groups financial
supply chain

Development and validation of models to
quantify and monitor financial risks,
including VaR, EaR, Gap and scenario
analysis

Integration of more complex financial
products into your information systems

Implementing appropriate (hedge)
accounting to reflect adequately the
(economic) exposures, including hedge
effectiveness testing

Develop appropriate reporting to enable
effective monitoring and steering of
financial risks by management
The financial crisis has demonstrated that
methods that seem to work in normal
circumstances may fail in the case of
major calamities. For example, a significant
interaction between market prices,
collateral demand, liquidity and credit
quality occurred. Therefore, the creation of
an overall corporate financial risk
framework is a central aspect of our
Treasury Advisory approach.
Your benefits
We will assist in further developing and
strengthening the understanding of the
financial risk management strategies to
help you best achieve your business goals,
both economically and in terms of financial
reporting.
This includes an adequate organizational
structure and infrastructure (policies,
controls, processes, models, etc.) as well
as the development of methods and
processes for quantifying, assessing and
monitoring financial risks.
Together we will develop scenarios and
stress-testing methods, including
emergency plans that are tailored to your
companys risk profile and classification so
that you are fully prepared to handle crisis
situations.
8 Ernst & Young Treasury management
Identity Diagnose Design Deliver Sustain
K
e
y

T
a
s
k
s

Analyze and comment on
current XYZ risk
management framework

Understand and validate
the current state of XYZ
FX risk management
framework

Analyze impact of FX risk
management framework
on XYZs results

Formulate
recommendations to
implement enhanced
XYZ risk management
framework

Post implementation
analysis ans sustainable
improvement plan
A
c
t
i
v
i
t
i
e
s

Understand XYZ business
structure, economic
model and transactional
flows

Conduct FR risk exposure
analysis of XYZ FX
porfolio

Analyze current XYZ FX
risk management policy
and hedging framework

Analyze business
planning schedule and
cycle vs. FX risk forecast
schedule and cycle and
comment on potential
improvement

Assess and validate the
current state of XYZ FX
risk management
framework

Define criteria for its
evaluation and
understand XYZ desired
future state

Assess accounting
schemes and impact of
FX risk management
framework on XYZs
result for both statutory
and management
reporting

Identify Benchmark
competitors (MNC) in
terms of FX risk
management

Set FX management
objectives considering
linkage with
shareholders value

Define XYZs FX risk
tolerance taking into
account XYZs business
dynamics

Design/Enhance XYZs
FX risk management
policy and hedging
framework

Formulate
recommendations of
potential benefits of
using or not using hedge
accounting

Analyze impact on:

SAP ECC 6.0 and
SAP-FSCM

SOX control
framework

Develop the approach
and requirements for the
selected improvements
as stated in the new FX
risk management policy

Design/Enhance the FX
risk management manual

Validate the newly
designed FX risk
management framework

Analyze impact and
redesign of FX risk
management framework
on stratutory accounting,
management reporting
and SOX control
framework

Support on FX risk
Management framework
implementation

Confirm the newly
designed FX risk
management framework
is operating as intended
and capture lessons
learned (KPIs,
performance
management reporting)

Perform test of design to
identify performance
gaps of the newly
designed FX risk
management framework

Implement an ongoing
monitoring program

Identify further
opportunities to extend
the benefits across the
XYZ group
Cash and liquidity management
Cash - and
liquidity
management
Organization
& governance
Performance
assessments
Financial risk
management
Corporate
funding
Valuation &
accounting
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Cash remains King
The ability of companies to manage
liquidity and loans is scrutinized with ever
more attention by financial markets and
stakeholders. During the financial crisis,
the capacity of a firm to generate liquidity
has re-emerged as the priority. Treasury
plays a central role in monitoring liquidity
risks, setting up cash-flow forecasting and
planning and reporting on liquidity buffers,
relevant financial covenants and other
key-indicators for liquidity risk.
Stress tests are becoming increasingly
important to monitor potential liquidity
risks. These should reflect both company
specific and market-wide scenarios and are
based on historical market trends, while
also mapping hypothetical - but possible -
future business scenarios. Based on these
tests, liquidity constraints can be identified
to be taken into account in your planning
and risk control.
Our services
We help you to focus and optimize the
methodologies for cash and liquidity
management and monitoring liquidity risks.
We will assist you to:

Define a liquidity risk management
strategy, policy and procedures

Review your companys local, regional,
and global cash collection, disbursement
and bank account structure

Develop cash pooling solutions, ranging
from architecture and processes to the
request for proposal (RFP) and bank
shortlist

Develop or review methodologies for
cash-flow forecasting and variance
analysis procedures

Review or select systems and technology
used in the cash forecasting process

Optimize the cash and liquidity
management processes and structures in
alignment with global tax strategies

Assess and reorganize cash management
activities (for instance, methodology to
implement shared service centers)

Develop a framework for structured
monitoring of key indicators for liquidity
risk

Enhance cooperation from local
management
Your benefits
We are able to guide you through the
optimization of the financial resources of
your company (cash management and
funding) and detect the best path to follow
to ensure that cash is effectively managed.
We will assist you in assessing cash
forecasting reliability and process adequacy
as well as executing or designing an
adequate cash forecasting model.
In addition, we have the right knowledge to
assist you in securing your payments
means, more effectively leveraging on
Single Euro Payments Area (SEPA) and
other changes in the payments landscape.
50% of large companies
have not implemented
homogenized procedures
to forecast their cash
flows.
34% of companies do not
analyze the variances
between real cash flows
and forecasts
systematically, in order to
make the necessary
improvements.
Source: Ernst & Young European Treasury
Survey
9 Ernst & Young Treasury management
Corporate funding
Corporate
funding
Organization
& governance
Performance
assessments
Financial risk
management
Cash - and
liquidity
management
Valuation &
accounting
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Funding strategy
In todays financial context with recurrent
liquidity tensions and increases in funding
costs, the control of liquidity risks is of
strategic importance to companies. Access
to a substantial and diverse pool of
financing is a security interest, providing
companies with the flexibility to adjust their
financial strategy. Regulatory, legal, tax
and accounting constraints complicate both
the assessment and the implementation of
financing solutions.
In this environment, the key factors to
success in the financing function of
treasury are:

The definition of an optimal funding
strategy, to optimize financing costs
while at the same time minimizing
liquidity risks

The set up of appropriate in-house
banking structures in a complex
regulatory and tax environment

Effective bank and investor relationship
management

Effective management of the financial
documentation supported by
management and control
Our services
Our services cover the full range of
financing activities, from defining the
strategy to support in negotiating and
implementing a financing arrangement.
Define the financing strategy

Identification of the medium and long
term financing needs

Develop a methodology for forecasting
and monitoring financing needs and
financial covenants

Practical examination of the borrower
and its group in terms of banking loans
and/or intra-group and concerning the
recurrent and exceptional guarantees
granted to third parties

Identification of the financing structures
diversity possibilities. For example, bond/
MTN issues, money market, open market
or syndicated banking credit/loan,
securitization, project financing, sale/
lease back and factoring
Negotiate financing

Implement a call for tenders / RFP
procedure, including the assistance in
preparing term sheets to support
negotiations with banks

Examination and negotiation, with the
assistance of legal advisors, of the
financing arrangements

Second opinion on offered financing
arrangements, including pricing of
(embedded) derivatives and key
covenant implications

Analysis of the implied credit risk of the
company, based on the credit spread
included in the financing arrangement

Analysis and advisory on tax and/or
accounting operations treatments
Implementation support

Assist with implementing the necessary
structures and teams to manage the
financing needs

Set up an in-house bank, including a
transfer pricing policy for financial
instruments and guarantees

Provide tax constraint management
while preserving an acceptable
administrative management level (e.g.,
withholding tax, interests deduction,
stamp duty and VAT)
Your benefits

Appropriate structures, procedures and
systems to determine and manage the
financing strategy of the company

A financing strategy which is tailored to
meet the organizational, legal,
regulatory, fiscal, contractual and
accounting constraints

Support in reaching optimal financing
costs and appropriate diversification of
funding sources
10 Ernst & Young Treasury management
Financial instruments
valuation and accounting
Valuation &
accounting
Organization
& governance
Performance
assessments
Financial risk
management
Cash - and
liquidity
management
Corporate
funding
Treasury
technology
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
The solid base or did you feel it
shaking, too?
Reliable information is the basis of your
decisions. The valuation of your financial
instruments is, inter alia, the foundation for
measuring and managing risks and taking
strategic decisions. If this foundation is not
stable, the whole building is in danger.
Due to the volatility in the financial
markets, the assessment and valuation of
financial instruments has become more
complex. Counterparty and liquidity risks
have to be quantifiable components of your
risk assessments and valuations.
With the increasing use of derivative
instruments, it is important to keep the
accompanying, sometimes very complex,
accounting rules in mind to ensure that the
accounting results are in line with the
economic rationale of your hedging
strategy.
Our services
For Ernst & Young, valuation and
accounting are essential core
competencies. Our goal is to translate this
knowledge to add value to our clients. Our
support services can be divided here as
follows:
Valuation

Valuation of complex financial
instruments, including embedded
derivatives and personnel options

Modeling and valuation of complex
derivatives

Quantification of credit risks/spreads and
impacts on valuation

Valuation and hedging in illiquid markets
Accounting for financial
instruments
We assist you in applying the (hedge)
accounting provisions of IAS 39 or your
local GAAP, in particular:

Preparation or review of your accounting
policy compared with leading practices

Design and optimization of hedge
accounting procedures

Measurement of hedge effectiveness

Support in applying the de-recognition
requirements so that a reliable
accounting of asset backed securities,
transactions, factoring, etc. is achieved

Reviews of large portfolios

Provide accounting advice for the
issuance of mezzanine capital, such as
convertible bonds, hybrid bonds

Knowledge transfer and training to the
treasurers and relevant operating units
Finally, we support you in the application of
disclosures and risk assessment-related
information according to IFRS7.
Accounting for commodities and
energy derivatives

Valuation of energy derivatives, such as
virtual power plants and modeling of
electricity spot prices (Hourly Price
Forward Curve)

Application and interpretation of the
own use exemption

Industry-specific features (energy and
utilities sector)

Hedge accounting for commodity
derivatives, including emission rights
Your benefits

Experience in financial instruments and
valuation

Skills for modeling and quantifying risks
and valuing derivatives

Forward-looking statements by use of
various solid valuation methods
11 Ernst & Young Treasury management
Treasury technology
Treasury
technology
Organization
& governance
Performance
assessments
Financial risk
management
Cash - and
liquidity
management
Corporate
funding
Valuation &
accounting
Assurance
& control
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Technology: the core of treasury
TMS has a central role in the control
environment of treasury, as it provides
functionality for front, middle and back
office activities and controls, with a trend
toward straight-through-processing. In
addition, the TMS provides the basis for
critical information such as forecasting,
valuation and reporting. It is therefore
essential to ensure that the system aligns
with the companys requirements and is
adequately configured and implemented.
At the same time, the range of offers in the
software industry is becoming more and
more complex due to significant evolutions
in technologies and approaches. In the
current economic environment
characterized by the concentration of
vendors, IT solutions tend to widen their
scope of functionalities, covering needs
from market activities to cash management
as well as banking communication.
Our services
Selecting a solution that fits your needs
Together with you we identify your treasury
organizations current and future business
requirements. This analysis should not only
focus on functional requirements but also
on technical and vendor-related aspects.
Based on this analysis and our extensive
knowledge of the TMS market we provide:

Advice on vendors to be considered in a
structured selection process

Support in development of a RFP, based
on existing proven templates

Management of the complete RFP
process, including vendor communication

Advice on the vendor responses

Facilitation of vendors demos, Proof-of-
concept and/or reference visits

Assistance with the preparation of the
cost/benefit analysis and business plan
Support and guidance in the
implementation
To ensure that IT systems quickly and
seamlessly fit into the business of your
treasury, we will guide you in the
implementation through:

Overall program and/or project
management

Conduct design workshops and prepare
design documents (blueprints)

Define and configure static data

Prototype instruments and unit test

Define reporting requirements

Reconcile static data

Develop and perform testing programs
and scripts

End-user training
In addition, we provide quality assurance
through all parts of the implementation
project.
Your benefits

Optimal alignment of treasury
technology to your requirements

Fast and efficient integration of systems
into the process

Extensive TMS knowledge and proven
methodologies for system selections and
implementations

Independence in choosing a system
provider

Sustainable knowledge transfer
Forecasting system Risk management system Accounting system Reporting system
Treasury Management System
Interest rate risk
FX risk
Credit risk
Commodity
Cash management
Liquidity management
Corporate finance
Treasury accounting
Back-office
Treasury control & reporting
Market data systems
Bank systems
Trading platforms
Confirmation
systems
Strategic
scope
P
h
a
s
e

0
P
h
a
s
e

1
Duration
P
h
a
s
e

2
Request for Information
Motivated long list
Motivated
short list
Test agenda
Final report with
recommendations
Analyse system integration
EY systems
knowledge base
Project start
and planning
Final
report
Demos
Implementation /
integration
Draw up
test agenda
Send, receive and assess
RFI
Review:

Determine
selection
criteria

Draw up
request for
information

Make long list
12 Ernst & Young Treasury management
Assurance and control
Assurance
& control
Organization
& governance
Performance
assessments
Financial risk
management
Cash - and
liquidity
management
Corporate
funding
Valuation &
accounting
Treasury
technology
I
m
p
lementatio
n
P
l
a
n
n
i
n
g
Strategy
Q
u
a
l
i
t
y

a
s
s
u
r
a
n
c
e
Treasury
management
Effective control
Several recent events remind us of the
importance for a company and its
shareholders to have an effective control
environment for its treasury activities.
The international accounting standards
(IFRS and FAS) and the obligation for
executives to report the internal control
framework (e.g., the Financial Security
Agreement Law and the Sarbanes-Oxley
Act) have created an additional level of
compliance.
For a technical and high risk function, such
as treasury management, specialized
assistance is often necessary to alert the
cash manager, the finance department or
the executive management about the main
challenges and to comfort their opinions
about the quality of the organization and
the internal control framework related to
cash, financing and risk management
activities. It is often necessary to reinforce
the internal teams of the company by
mobilizing competences and methodology
specifically developed for treasury
management control.
Key questions

Are the objectives for treasury and
financial risk management clearly
defined?

Are all financial risks of the group
identified and correctly measured?

Is treasury management meeting its
objectives and does it respect the limits
and guidelines assigned to it?

Is the organizational set up satisfying and
are its procedures correctly documented
and implemented?

Are the resources of the treasury
management department sufficiently
numerous, competent and independent?

Is the reporting on treasury transactions
and positions relevant, exhaustive and
independently done?

Are the methods used and the financial,
legal and fiscal risks related to derivative
instruments well understood, measured
and controlled?
Our services
We offer to share control and management
systems and methodologies, taking into
account the requirements for:

Legislative/regulatory compliance

Efficiency

Efficacy

Accountability
To this end, we perform a full review by
checking and analyzing the current state,
followed by recommendations for
optimization with regard to the statutory
requirements based on our experience of
leading practice.
Our services include support to the existing
internal audit units in the planning,
preparation, performance and reporting,
taking into account current and future
trends. The results are recommendations
for the development of an effective
(continuous) monitoring control
environment, support for the
implementation of programs (such as
fraud prevention or SOX) and evaluation of
the implemented controls and efficiency.
Your benefits

Assurances and advice focused on
minimizing operational risks and
identifying potential operational
improvements

Compliance with relevant legislation

Active use of your control framework to
increase efficiency and effectiveness of
processes
13 Ernst & Young Treasury management
Country Contacts Address
France
Olivier Drion
Tel: +33 1 46 93 79 14
olivier.drion@fr.ey.com
Ernst & Young et Associs
Tour Ernst & Young
Faubourg de lArche
92037 Paris La Dfense Cedex
Germany
Dr. Karsten Fser
Tel: +49 711988114497
karsten.fueser@de.ey.com
Ernst & Young AG
Wirtschaftsprfungsgesellschaft
Mittlerer Pfad 15
70499 Stuttgart
Italy
Luca Calvetti
Tel: +39 02 806 69755
luca.calvetti@it.ey.com
Ernst & Young Financial Business
Advisors SPA
Via Wittgens, 6
20123 Milano
The Netherlands
Nico Warmer
Tel: +31 88 40 71400
nico.warmer@nl.ey.com
Ernst & Young Nederland LLP
Antonio Vivaldistraat 150
1083 HP Amsterdam
United Kingdom
Owen Purcell
Tel: +44 20 795 1 0059
opurcell@uk.ey.com
Ernst & Young LLP
1 More London Place
London SE1 2AF
Switzerland
Marco Stalder
Tel: +41 58 286 3341
marco.stalder@ch.ey.com
Ernst & Young AG
Brandschenkestrasse 100
CH8002 Zurich
Sweden
Karin Sancho
Tel: + 46 8 520 590 00
karin.sancho@se.ey.com
Ernst & Young AB
Jakobsbergsgatan 24, P.O. Box
7850, SE-103 99 Stockholm
Norway
Mikal Opheim
Tel : +47 24 00 26 63
mikal.opheim@no.ey.com
Ernst & Young AS
Christian Frederiks Plass 6, Atrium
NO- OO51 Oslo
Hungary
Tibor Szucs
Tel : +36 1 451 8795
tibor.szucs@hu.ey.com
Ernst & Young Advisory Ltd.
Vci t 20
1132 Budapest Hungary
Contacts details
EMEIA treasury services
14 Ernst & Young Treasury management
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young
Ernst & Young is a global leader in assurance, tax,
transaction and advisory services. Worldwide, our
144,000 people are united by our shared values and
an unwavering commitment to quality. We make a
difference by helping our people, our clients and our
wider communities achieve their potential.
Ernst & Young refers to the global organization of
member firms of Ernst & Young Global Limited, each
of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee,
does not provide services to clients. For more
information about our organization, please visit
www.ey.com.
2010 EYGM Limited.
All Rights Reserved.
EYG No. AU0612
In line with Ernst & Youngs commitment to
minimize its impact on the environment, this
document has been printed on paper with a
high recycled content.
This publication contains information in summary form and is
therefore intended for general guidance only. It is not intended to
be a substitute for detailed research or the exercise of professional
judgment. Neither EYGM Limited nor any other member of the global
Ernst & Young organization can accept any responsibility
for loss occasioned to any person acting or refraining from action as
a result of any material in this publication. On any specific matter,
reference should be made to the appropriate advisor.
The views of third parties set out in this publication are not necessarily
the views of the global Ernst & Young organization or its member
firms. Moreover, they should be seen in the context of the time they
were made.