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As your company moves into international markets, it may be time to check whether your corporate treasury is keeping pace.
The market is moving from a growth-at-all-costs stance into an era of renewed focus on managing profitability, margin and bottom line, and your treasury function may be the place to find new capabilities and competitive advantage. A more strategic treasury can help make it easier for you to do business, offering insights into partnerships and ways to build powerful strategy, governance and pricing frameworks that can help boost sales and increase profitability as you expand.
These insights can help your company gain agility in managing international pricing to limit risk and grow revenue. Here’s how to take your treasury to the next level.
How treasury leaders can thrive operating in global markets
No matter their stage of international growth, treasury executives tell us they must answer key questions when facing decisions that can greatly impact local-market success.
- You’re going international. When should you price your products in local currencies?
- You’re already international. What kind of governance strategies should you employ around price changes and FX risk management?
- You’re scaling globally. Do your strategy, governance and policies support a multi-currency business model? Do you have the right processes, organization model and systems in place to support growth and future business needs?
- You’re a market leader. Do you have fit for purpose systems and processes that help enable agility and automation? Can these be tailored to differentiate from the market as a competitive advantage?
We set out to establish benchmarks and gather industry-leading practices to better tackle questions like these. We talked to more than a dozen treasury, commercial and regional finance executives in the global cloud and software industry, and they shared their approach to managing commercial foreign exchange risk and the pricing mechanisms they have in place.
The road to achieving competitive advantage
We found very few companies lead across all aspects of their corporate treasury operations when it comes to international pricing strategy.
Emerging-stage businesses, for example, generally have yet to establish strategy, governance or policies to handle pricing or FX management. These companies typically conduct business primarily in the US and only in USD. As these companies begin to grow internationally, they often find themselves with growing FX exposures and lack strategies that help to deal with multiple foreign currencies.
Companies in the middle stage of the maturity curve may have established governance and policies and conduct business in a handful of currencies, but they can face challenges in scaling their processes to match the expanding needs of the enterprise.
At the most mature stage, companies can realize a competitive market advantage with strategies, governance and policies tailored for sophisticated international pricing and FX agility.
Leading peer practices to help drive profitable international growth
There’s no single route to success for treasuries. From setting your overall strategy and organizational structure, to establishing a governance framework and the right tools to manage FX, you’ll find there are many ways to climb up the maturity curve.
Here are some strategic questions we hear top companies asking that shape the practices that help them successfully identify where they fall on the maturity curve — and where they’ll need to focus if they want to level up.
We can help
Whether you’re taking your first steps into international markets or seeking to benchmark your global pricing and FX risk management strategies against your peers, our Treasury team can help you identify where to focus your efforts.
We’ve worked with clients to implement treasury technology solutions that helped set a foundation for their international growth. We’ve helped establish robust international pricing strategies and governance processes, and we can assist with your FX risk management strategies and related accounting needs.
Marguerite Duprieu, Pavel Balada, Ranee Wiley, Moz Chhagan, and Shuman Wang contributed to this piece.
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