What's on today's treasurers' minds? in the uncertain global economy, treasurers are faced with a slew of internal and external financial, risk and technological challenges.

• Author: Heffes, Ellen M.
• Position: Treasury

The treasurer of a 3,700-store U.S.-based retail chain is the steward of $2 billion in cash that was raised in the past two years through financing transactions and asset sales to mitigate the risks of paying bills and paying off debt. The treasurer of a global software company is managing $400 million in cash, distributed around the world, that is not necessarily "liquid cash," available for use within the U.S.

Ask a treasurer if he or she could be called "Chief Liquidity Officer" (CLO), and they'll probably agree. The CLO moniker fits, since regardless of industry or geography, today's treasurers main concerns focus on liquidity: how much cash or equivalents they have, where it is, its availability, how much of it is flowing--both in and out--and the degree of risk associated wth it.

The adage that "cash is king" is an understatement in the world of treasury, where even having cash has its challenges. And, along with global financial uncertainties, considerable changes impacting the treasury function are presenting new challenges for all treasurers, both the "haves" and the "have-nots." Financial Executive spoke with treasurers from the two industries described above to tap into their thinking on the current environment's impact on their role.

Treasurer of Autodesk Inc.

"We are a cash-rich company," says Jan P. Berger, treasurer of Autodesk Inc., whose main assets are its people and its software. "In the past, we have enjoyed a fairly decent return from interest income. In the current environment, our yields are down, and so the expectations that we had two or three years ago with regard to interest rates contributing to the bottom line have shrunk." It's a challenge, he says, "to try to eke out extra return while maintaining credit quality of investments." Also, as the company has grown internationally, managing that growth and getting return and yield on its cash balances have also changed.

Autodesk develops and markets design and drafting software and multimedia tools, primarily for the business and professional environment. The company operates with a small staff that controls the "lion's share" of activities, including its centralized treasury function, from its San Rafael, Calif. headquarters. While it sells in Japanese yen, Australian dollars, Canadian dollars and European euros, hub locations in Singapore, Switzerland and Montreal are structured as U.S.-dollar functional from an accounting standpoint. Berger explains that by holding the excess cash in U.S. dollars, "we're not subject to foreign exchange re-measurement every accounting period," and that allows the firm more flexibility for its investment choices. While some local generally accepted accounting principles (GAAP) reporting requirements relate mainly to taxes, the company's books are consolidated in U.S. dollars.

Berger works with one principal international bank with the geographic reach and global infrastructure that fits his requirements. "We leverage our banking structure and technology," he says, adding that "using its services and branches wherever we can around the world enhances our relationship and affords us the control to move money from one central location."

However, a recently changed legal structure is creating new challenges for the company's geographic "pockets of cash," says Berger. The strengthened euro and weakened U.S. dollar has been "somewhat" beneficial: "We sell in euros and yen, exchange those receipts into U.S. dollars, [so] we're getting more dollars." On the other hand, he says, "We do have hedge programs in those currencies, so those hedge programs, to a certain extent, limit our upside potential." He says his view of foreign exchange hedge programs is to minimize the big losses and the very large swings. "You're essentially buying insurance," he says, and need to stick to the course of a disciplined program that has a consistent approach. "If you try to time the...