FX Exposure Management
GPS FX Exposure Management strategy helps manage today's global treasury operations in order to streamline processes, reduce costs, and control risks while ensuring SOX 404 compliance.
FXpert®, GPS's proprietary fx software, provides a solution that simplifies the calculation, reporting and settlement of foreign exchange hedges. Its features include the ability to export real-time data from your ERP database; quantify, reduce, and control your FX risk by currency pair and entity; automated trade netting to pull FX volume out of the market; customized reporting; set individual trade limits/tiers and policies for hedging to compliment your existing FX policy; hedge at the subsidiary level while maintaining centralized control.
CASE STUDY
A Growing Company Means Growing Complexity and Exposures
- A large technology firm was enjoying rapid international growth but soon discovered that this success posed new pressures on the treasury operations.The firm found itself juggling spreadsheets from an increasing number of subsidiaries dealing in an increasing number of currencies. This meant growing risk fx exposure compounded by growing inefficiencies.
- They knew they had to do something to strengthen their FX exposure management strategy, control risk and streamline the process while remaining SOX 404 compliant. They selected Global Positioning Solutions, Inc (GPS) who, after assessing the firm's true FX risks, developed an automated global solution, mitigating risk while driving efficiencies.
15 Subsidiaries, 22 Currencies, Hundreds of Thousands of Keystrokes
- The tracking of positions and trades was getting difficult to manage. There were no standard time frames, procedures, or formats to acquire data. Each subsidiary created and sent data that had to be retouched and handed off to be traded. Data sharing occurred via emails and spreadsheets, impacting productivity while driving up the risk of error and the related impact on revenue. The company needed a system that could centralize, standardize, and automate their processes while ensuring the highest integrity and security.
Managed System Risk, Greater Efficiency
- One main objective was to eliminate the inefficiencies and risks associated with keystroking vast amounts of data. We therefore enabled straight through processing (STP). This simple eliminating of data re-keying and manual analyzing offered immediate efficiency improvements while assisting the company to remain Sarbanes-Oxley (Section 404) compliant. Perhaps more importantly, it eliminated the unquantifiable risk of errors that can lead to bad trades and inaccurate bookings.
- Simultaneously, FXpert® centralized the data, allowing for ready oversight while eliminating the inefficiencies of varied systems. By having all the data under one processing roof, FXpert® was able to reduce the company's number of subsidiary financial contracts by 90%-from an average of 500 outstanding to under 50. In turn, this aggregation of subsidiary contracts reduced the volume of transactions, thereby mitigating the losses associated with high volume of transactions.
A Customized Process, A Secure Transition
- The technology firm was eager to standardize their processes but knew they couldn't afford to disrupt business-or open themselves to new security risks. Nor could they afford to overhaul everything they did just to fit a new inflexible standard. They wisely demanded a customized solution that would not disrupt the integrity or security of operations.
- And so GPS conducted a professional review of the firm's accounting practice as it related to FAS 52 and FAS 133. Then, throughout implementation, GPS continues to work closely with the company to customize the FXpert® product, ensuring it met the company's internal demands while delivering the requisite changes, seamlessly and securely.
Better Business Processes Brings Peace of Mind
- Rapid international growth was straining this global technology firm-exposing it to risks, inefficiencies, losses in revenue, and unnecessary stresses. By automating the process, by consolidating the diverse systems, by greatly reducing the inevitable errors of keystroking, GPS delivered more than a better business solution. We delivered peace of mind.
Contact Us today and speak with an expert on how we can help your company manage its risk exposures.