hardest job in finance v1
TRANSCRIPT
Corporate Foreign Exchange ManagementThe Hardest Job in Finance!
Topics to be Discussed Today
• Panel Introduction & Opening Comments
• Corporate Foreign Exchange Management(What makes it so hard?)
• Risk Factors (What should you be concerned about?)
• Best Practices(Is there a better way?)
• Questions from the Audience
• How to Get Started
Copyright 2007 Rim Tec Inc. Slide 2
Panel Speaker Introductions
• John Connors– Partner at Ignition Partners– John spent sixteen years at Microsoft Corporation in several strategic roles.
• 2000 to 2005 SVP of Finance and Administration and CFO• Previous positions included VP of Enterprise Group and Corporate Controller
– Serves on the Board of Directors for Nike, BioPassword, Second Space, Jobster, Xensource and FiREapps
• Wolfgang Koester– CEO of FiREapps– Former CEO of GFTA Trendanalysen, a quantitative currency management firm. He
has managed risk for a broad range of companies as well as governments, including G-10s, since 1986
• Corey Edens– Chief Product Officer FiREapps– Formerly the President of Valcon Distributing, Controller for Microsoft Networks, and
an Auditor for Deloitte Haskins and Sells
Copyright 2007 Rim Tec Inc. Slide 3
A Fragmented Cross-Functional Process
Corporate Controller• A/P • A/R• Intercompany
Treasurer• Cash Management• I/C Settlement
Tax• Repatriation• I/C Loans• Transfer Pricing
Regional Controller• A/P • A/R• Intercompany
Foreign Exchange Manager Banks
Resource & Time Intensive
Inaccurate Exposures
Unnecessary Cost & Risk
Copyright 2007 Rim Tec Inc. Slide 4
The Old Way of Managing Foreign Exchange
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Survey: What Makes Foreign Exchange Exposure Mgmt So Hard?
DataIntegrity
ERPLandscape
ComplexSpreadsheets
CurrencyVolatility
ComplexDerivatives
TaxImplications
CashManagement
IntercompanyPayments
PolicyCompliance
GlobalCoordination
InaccurateExposures
UnnecessaryTransactions
PoorResourceUtilization
EarningsVolatility
IncreasedAudits
MarketRisk
NonCompliance
UnnecessaryCosts
BusinessImpact
Challenges
ForeignExchangeManager
Copyright 2007 Rim Tec Inc. Slide 6
Foreign Exchange Exposure ManagementOperational Challenges Create Economic and Compliance Risk
Compliance
Economic
Risk Factors
Economic
Compliance Operational
• FAS 52 • FAS 133 • SOX
• Earnings Volatility • Unnecessary Costs
• Turnover
• Lack of Skilled Resources • Manually Intensive Process
Copyright 2007 Rim Tec Inc. Slide 7
Cornerstones of Foreign Exchange Best Practices
• A holistic/enterprise-wide approach
• Top down management support
• Understand the currency exposures well– data integrity – system set up– measurement– transparency
• Sound foreign exchange processes and responsibility
• Communication
• Leverage the power of automated, on-demand solutions
Copyright 2007 Rim Tec Inc. Slide 8
Foreign Exchange Exposure Management Value Chain
Pre -Trade Trade Post-Trade
AggregateExposures
AnalyzeExposures
DecideActions
SelectInstrument
PriceExecuteTrade
ConfirmTrade
SettleTrade
FiREapps Banks / Inv. Banks Treasury & Accounting Systems
Accountfor Trade
Copyright 2007 Rim Tec Inc. Slide 9
Keys to Success: Process, People, and Systems
Foreign Exchange ExposureManagement Platform
Exposure Analytics Decision Management
DataIntegrity
ExposureMeasurement
PolicyBased
Decisions
InternalBanking
LogicOptimization
Centralized, Disciplined and Timely Process
Transparency, Auditability, and Compliance
Copyright 2007 Rim Tec Inc. Slide 10
Holistic Exposure Management Process
Corporate Controller• A/P • A/R• Inter-Company
Treasurer• Cash Management• I/C Settlement
Tax• Repatriation• I/C Loans • Transfer Pricing
Regional Controller• A/P• A/R• Inter-Company
Centralized FX Mgmt PlatformTimely Disciplined ProcessGlobal Coordination
ForeignExchangeManager
Copyright 2007 Rim Tec Inc. Slide 11
Transform Risk Factors into Value Drivers
• Accurate FX Exposures
• Auditable Processes
• Risk Mgmt Policy Compliance
• Decrease Earnings Volatility
• Reduce Transaction Size and Volume
• Exposure Analysts • Focus on Value Add
• Global Coordination
ValueDrivers
OperationalCompliance
Economic
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Start Your Journey to Foreign Exchange Best Practices
• Best Practices Whitepaper: – Mailed to webinar attendees – Link will be sent early next week
• Contact FiREapps to schedule a 15 minute FX Health Check:– Call +1.866.928.FIRE (3473)– www.fireapps.com
Copyright 2007 Rim Tec Inc. Slide 13
Thank You for Your Time