Treasury for Scale-Ups
Treasury for
Scale-Ups
As your company grows, the Treasury function will become a critical part of the organization to support business growth and mitigate operational, financial and reputational risk
Treasury Function Journey
Treasury Function as a Growth Driver
As your company grows, the Treasury function will become a critical part of the organization to support business growth and mitigate operational, financial and reputational risk
Treasury Function Journey
Treasury Function as
a Growth Driver
Challenges faced by clients experiencing rapid growth
Presence in multiple locations with multiple banking partners
Initial phase of the Treasury function build out, but need to mature
Cash distributed across global locations with limited centralization / FX optimization
Challenging to gain visibility of global cash positions efficiently and reliably
Many processes remain manual and unstructured, with limited use of technology (e.g. ERP / TMS)
Lack of familiarity in the business with regards to the value Treasury generates
Identifying the building blocks typically required to establish a best-in-class Treasury function
Treasury Structure and Operating Model
Manage liquidity in a centralized manner, allowing for working capital efficiencies, better yield and risk management
Decentralized
Treasury Model
Optimal Treasury
Operating Model
Treasury Structure and Operating Model
Manage liquidity in a centralized manner, allowing for working capital efficiencies, better yield and risk management
Decentralized Treasury Model
Optimal Treasury Operating Model
Liquidity and Cash Management
Design a centralized liquidity structure that maximizes yield while improving real-time visibility of cash
Maximizing efficiencies for your cash...
To maximize recycling of Group cash while minimizing costs, many mature corporations consolidate the balances of their Group entities to redistribute it where needed
This set-up, known as “Cash Concentration”, minimizes reliance on external financing while ensuring cost-efficient usage of Group’s financial resources
...while moving from Physical with Virtual
Replace selected Physical Accounts with Virtual Accounts to ensure immediate availability and visibility of funds into the Treasury account
Provides real-time offset of credits and debits to reduce reliance on intraday lines
Liquidity and Cash Management
Design a centralized liquidity structure that maximizes yield while improving real-time visibility of cash
Maximizing efficiencies for your cash...
To maximize recycling of Group cash while minimizing costs, many mature corporations consolidate the balances of their Group entities to redistribute it where needed
This set-up, known as “Cash Concentration”, minimizes reliance on external financing while ensuring cost-efficient usage of Group’s financial resources
...while moving from Physical with Virtual
Replace selected Physical Accounts with Virtual Accounts to ensure immediate availability and visibility of funds into the Treasury account
Provides real-time offset of credits and debits to reduce reliance on intraday lines
FX and Currency Management
Create an integrated cross-currency workflow to improve pricing and visibility of your cross-currency flows
FX and Currency Management
Create an integrated cross-currency workflow to improve pricing and visibility of your cross-currency flows
International Expansion
As your company expands internationally, Treasury should focus on requirements for deployment to enable seamless business growth
Establish appropriate local banking partners to open accounts and connect with global structure
Determine how to capitalize a new entity and align funding structure with a compliant transfer pricing model
Understand and comply with tax laws and insured deposit limits; prepare reporting to align with local requirements
Evaluate local payment rails and whether you need a payment processor; align collection methods with customer expectations
International Expansion
As your company expands internationally, Treasury should focus on requirements
for deployment to enable seamless business growth
Establish appropriate local banking partners to open accounts and connect with global structure
Determine how to capitalize a new entity and align funding structure with a compliant transfer pricing model
Understand and comply with tax laws and insured deposit limits; prepare reporting to align with local requirements
Evaluate local payment rails and whether you need a payment processor; align collection methods with customer expectations
Technology and Connectivity
Combination of Enterprise Resource Planning (ERP) and Treasury Management System (TMS) is a critical integrated tool for today’s treasurer, enabling a large degree of efficiency
Technology and Connectivity
Combination of Enterprise Resource Planning (ERP) and Treasury Management System (TMS) is a critical integrated tool for today’s treasurer, enabling a large degree of efficiency
Cybersecurity and Fraud Prevention
As your business expands, the surface area for cybersecurity attacks increases while risk of internal fraud needs to be managed through systems-based controls
Unauthorized actions by employees or insiders to misappropriate funds, manipulate financial records, or exploit treasury processes for personal gain
Risk areas
• Cash Handling
• Payment Processing
• Access Controls
• Reconciliation Gaps
Malicious software, to include viruses, ransomware, and spyware, designed to cause damage to data and systems, or gain unauthorized access
Risk areas
• Malware modifying legitimate payment instructions to an unauthorized beneficiary
• Encryption of critical files & servers for extortion
Psychological manipulation of people into performing actions or divulging confidential information
_
Risk areas
• External communication channels
• Call from someone pretending to be a vendor (phishing)
• Internal relationships and communication channels e.g., senior / urgent requests
Cybersecurity and Fraud Prevention
As your business expands, the surface area for cybersecurity attacks increases while risk of internal fraud needs to be managed through systems-based controls
Unauthorized actions by employees or insiders to misappropriate funds, manipulate financial records, or exploit treasury processes for personal gain
Risk areas
• Cash Handling
• Payment Processing
• Access Controls
• Reconciliation Gaps
Malicious software, to include viruses, ransomware, and spyware, designed to cause damage to data and systems, or gain unauthorized access
Risk areas
• Malware modifying legitimate payment instructions to an unauthorized beneficiary
• Encryption of critical files & servers for extortion
Psychological manipulation of people into performing actions or divulging confidential information
_
Risk areas
• External communication channels
• Call from someone pretending to be a vendor (phishing)
• Internal relationships and communication channels e.g., senior / urgent requests
IPO Readiness
The Treasury function plays a critical role in the run-up to IPO requiring significant upfront preparation
IPO Readiness
The Treasury function plays a critical role in the run-up to IPO
requiring significant upfront preparation
M&A Integration
Establish a framework for managing M&A to ensure Treasury is fully prepared for the challenges of integration
Document current state
Arrange deal close funding and
establish escrow
Prepare for day 1 liquidity and bank account control
Timeline
Announcement Date – Closure Date
Desired outcome
Comprehensive understanding of current state & available resources for M&A process
Day 1 plan execution
Analyse current state and develop target state operating model
Identify and size the efficiency opportunities
Timeline
Up to 120 days
Desired outcome
Combined bank structure & connectivity with required documentation
Consolidate the organizational structure and banking model
Centralize, standardize and automate treasury processes
Rationalize/merge IT systemsto single global platforms
Evolve treasury using SSC, IHB and OBO set-ups
Timeline
1-3 years
Desired outcome
Fully consolidated optimized
treasury capabilities
M&A Integration
Establish a framework for managing M&A to ensure Treasury is fully prepared for the challenges of integration
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|---|---|---|---|
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• Document current state |
• Day 1 plan execution • Identify and size the efficiency opportunities |
• Consolidate the organizational structure and banking model |
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Announcement Date – Closure Date |
Up to 120 days |
1-3 years |
|
|
Comprehensive understanding of current state & available resources for M&A process |
Combined bank structure & connectivity |
Fully consolidated optimized treasury capabilities |
Why partner with
J.P. Morgan?
J.P. Morgan Payments has a strong track record of working with rapid growth
Scale-Ups as they progress on their journey towards becoming global corporates
1 JPMorganChase 2023 Annual Report. 2 JPMorganChase Investor Day 2024, May 2024. 3 JPMorganChase Investor Day, May 2023. (Excludes ~400k active SMB merchant accounts across the franchise.)4 JPMorganChase proprietary data 2023 5 Greenwich 2021 U.S. Large Corporate Cash Management Study, Excellence Awards Winner for Innovation, Digital Platform Design, Digital Platform Functionality, Domestic Product Capabilities, Quality of Advice and Customer Service. 6 JPMorganChase Investor Day, May 2022. Excludes ~350k active SMB merchant accounts across the franchise
Why partner with J.P. Morgan?
J.P. Morgan Payments has a strong track record of working with rapid growth Scale-Ups as they progress on their journey towards becoming global corporates
1 JPMorganChase 2023 Annual Report. 2 JPMorganChase Investor Day 2024, May 2024. 3 JPMorganChase Investor Day, May 2023. (Excludes ~400k active SMB merchant accounts across the franchise.)4 JPMorganChase proprietary data 2023 5 Greenwich 2021 U.S. Large Corporate Cash Management Study, Excellence Awards Winner for Innovation, Digital Platform Design, Digital Platform Functionality, Domestic Product Capabilities, Quality of Advice and Customer Service. 6 JPMorganChase Investor Day, May 2022. Excludes ~350k active SMB merchant accounts across the franchise
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