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3 key benefits to managing your hedging program without spreadsheets

  • yinan yu headshot

    Authors

    Yinan Yu

    Director
    Accounting Advisory

    Corporates | Kennett Square, PA

Summary

Treasury organizations can replace manual data manipulation and significantly increase efficiencies through system integrations, which have become drastically easier and more cost-efficient with the advent of APIs and the refinement of SFTP connections.

When we speak to treasury professionals across different industries and functions, one of the key challenges they continually mention is the time and effort required to manage voluminous spreadsheets.

Many organizations depend on manual spreadsheets to:

  • Gather exposure data
  • Transfer data between trade portals and treasury management systems
  • Report hedging results to ERP systems

These back-office activities are manual, time consuming, and extremely prone to error.

Economic stress and market uncertainties caused by COVID-19, only amplify this challenge. Business forecasts and exposures consistently change, and the ability to access exposure information quickly and provide accurate, complete financial results for the hedging programs without extensive manual intervention has grown critically important to treasury organizations.

Fortunately, your organization can achieve significant increases in efficiencies through system integrations. Connecting systems has become drastically easier and much more cost-efficient with the advent of APIs and the refinement of SFTP connections, allowing treasury professionals to rely on systems to replace manual data manipulation.

Benefit 1: Simplified exposure gathering

For exposure gathering purposes, the integration of ERP systems and treasury platforms allows your treasury team to gather and consolidate balance sheet and cash flow exposures from ERPs at the local business level and streamline decentralized data gathering through system integrations. The automatic feed of exposure data from ERP systems enables your organization to make appropriate hedging decisions aligned with your risk management objectives.

Previously, we maintained an Excel database of our trades and exposures outside of our risk management platform, entering it all into the platform and making sure the data is accurate and making sense — and all of that with about 50 different spreadsheets linking to each other. Today, we have one system of record, our ChathamDirect risk management platform, where we enter data once and slice and dice it by legal entity, currency pair, geography, and counterparty. This has saved us a lot of time and enabled us to easily obtain the data for analysis.

Ash Srinivasan, Manager, Treasury and Risk Management, Brunswick Corporation

Benefit 2: Automated reporting

For reporting purposes, the integration of treasury platforms and ERP systems removes the need to synthesize and format accounting results in order to provide hedging results for business units with different charts of accounts and ERP systems. The automatic feed of financial results ensures the complete and accurate distribution of accounting data across the organization.

Benefit 3: Elevated strategic role

With automatic connections between ERPs, trade portals, and treasury management platforms, you can finally get relief from managing spreadsheets for data accuracy and completeness. This elevates your team to a more strategic role where you can serve as better business partners across the organization, providing valuable insights to management for critical decision-making.

Making informed decisions

Overhauling your processes and selecting the right technology to automate them requires time and resources, but the benefits can transform your treasury organization for years to come. A streamlined process from exposure gathering through reporting gives your team better insight and more time to engage in value-added analytics. As you work to assess your current operations and determine a course of action, access to expertise and technology is essential. As the world’s largest and most experienced independent financial risk management advisor and technology provider, Chatham Financial can empower your team to make informed decisions that achieve your objectives.

Related insight: In “Top 10 jobs for automation and efficiency in treasury,” learn how Brunswick Corporation saved 35 hours per week by streamlining treasury operations.

About ChathamDirect

ChathamDirect is a groundbreaking financial risk management and hedge accounting platform that supports foreign exchange, interest rate, and commodity hedging programs. ChathamDirect provides a clear view of your entire hedging program, including cash flow forecasts, balance sheet exposures, and hedge requests — all securely available on a leading SaaS platform. ChathamDirect is backed by Chatham Financial, an employee-owned, independent market leader with a global team of capital markets experts, risk management advisors, CPAs, lawyers, quantitative analysts, and technology developers who serve more than 3,000 clients annually.


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About the author

  • Yinan Yu

    Director
    Accounting Advisory

    Corporates | Kennett Square, PA


Disclaimers

Chatham Hedging Advisors, LLC (CHA) is a subsidiary of Chatham Financial Corp. and provides hedge advisory, accounting and execution services related to swap transactions in the United States. CHA is registered with the Commodity Futures Trading Commission (CFTC) as a commodity trading advisor and is a member of the National Futures Association (NFA); however, neither the CFTC nor the NFA have passed upon the merits of participating in any advisory services offered by CHA. For further information, please visit chathamfinancial.com/legal-notices.

Transactions in over-the-counter derivatives (or “swaps”) have significant risks, including, but not limited to, substantial risk of loss. You should consult your own business, legal, tax and accounting advisers with respect to proposed swap transaction and you should refrain from entering into any swap transaction unless you have fully understood the terms and risks of the transaction, including the extent of your potential risk of loss. This material has been prepared by a sales or trading employee or agent of Chatham Hedging Advisors and could be deemed a solicitation for entering into a derivatives transaction. This material is not a research report prepared by Chatham Hedging Advisors. If you are not an experienced user of the derivatives markets, capable of making independent trading decisions, then you should not rely solely on this communication in making trading decisions. All rights reserved.

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