Editor’s Note: For this installment of our multi-part blog series, profiling CFOs who are leveraging treasury to drive strategic change for their organizations, we focus on Sachio Matsumoto, executive vice president and chief financial officer of the LIXIL Group Corporation. Matsumoto discusses the changing role of treasury and why treasury should contribute to day-to-day business processes. His comments are from his interview in Kyriba’s e-book, “The CFO Perspective: The Strategic Value of Treasury,” which highlights more than a dozen CFOs and expert treasury consultants from Accenture and KPMG.
Matsumoto believes that treasury management systems (TMS) can dramatically enhance global treasury capabilities. “Treasury is a critical part of the organization as it directly influences stakeholders’ value and ensures that we have the capital we need to run the business,” Matsumoto said.
There’s more to it, however. Matsumoto points out that a TMS is a multifaceted application that can help organizations do more to track and balance assets. “Treasury is often the first department to identify potential issues in our group of companies because problems tend to appear in cash flows first. Treasury also protects our financial statements by identifying and hedging foreign exchange and other market risks, Matsumoto said.”
Success can be measured in a variety of ways, and each organization has specific metrics that carry more weight than others. For Matsumoto, the success of a TMS is in the numbers.
The standard of achievement for LIXIL’s treasury, according to Matsumoto, is when “treasury operations improve shareholders’ value by strengthening nominal key performance indicators, such as return on invested capital; net/debt earnings before interest, taxes, depreciation, and amortization; and financial leverage.”
“TMS can add significant value, such as added productivity and more accurate cash forecasting and cash visibility for the company to deliver the objectives and value of treasury previously mentioned.” For the rest of the interview from Sachio Matsumoto, download “The CFO Perspective: The Strategic Value of Treasury.”