Key Takeaways
- Centralised treasury management empowers corporations to manage liquidity, risk, and capital more effectively across subsidiaries and business units—especially in high-growth markets like Vietnam.
- Decentralised treasury systems are increasingly unsustainable for organisations with complex operations, resulting in inefficiencies, financial blind spots, and missed opportunities.
- With a clear strategy, stakeholder alignment, and the right technology, treasury centralisation becomes a lever for long-term competitiveness and sustainable growth.
The Strategic Case for Treasury Centralisation
Over the past decade, treasury management has evolved from a siloed, operational function to a central part of corporate strategy. As businesses scale, especially in emerging markets like Vietnam, the limitations of decentralised treasury models become clear: fragmented data, inconsistent processes, and reduced visibility into overall financial health.
Centralised treasury management addresses these pain points by consolidating financial activities - cash positioning, risk management, funding, and investment planning - into a single, unified function. With the support of modern Treasury Management Systems (TMS), treasurers gain real-time insights and control across the enterprise. The result is faster decision-making, tighter compliance, and significant cost savings.
In Vietnam, the trend toward centralisation is being shaped by several factors: globalisation, foreign direct investment, regulatory modernisation, and digital transformation. While adoption remains uneven, the direction is clear: treasury centralisation is no longer a best practice reserved for multinationals—it’s an emerging necessity for domestic market leaders as well.
The Risks and Costs of Decentralised Treasury Models
Companies that maintain decentralised treasury functions often underestimate the hidden costs and operational risks.
- Inefficiency – In decentralised models, each subsidiary manages its own finances, leading to redundant processes. For example, if a global company has 10 subsidiaries each spending 50 hours a month on cash forecasting, it wastes a total of 500 hours, costing around VND 600 million per month or VND 7.2 billion annually (assuming VND 12 million hourly rate).
- Lack of Transparency – Decentralised systems create siloed information, limiting senior management's visibility of the overall financial status. For instance, if two subsidiaries hold VND 360 billion in cash but have VND 240 billion in liabilities, management might overlook potential liquidity issues and missed interest income from centralised cash management.
- Inconsistent Risk Management – Decentralisation leads to varied risk assessment methods, increasing financial exposure. Without a unified hedging strategy, a company facing VND 2.4 trillion in currency fluctuations could risk losses of VND 120 billion due to unhedged positions.
- Increased Operational Costs – Managing treasury functions across multiple units raises operational costs. If each unit spends VND 4.8 billion annually on treasury activities, five units would total VND 24 billion per year. Centralising could reduce costs by 30-50%, saving VND 7.2 – 12 billion annually.
How Centralisation Delivers Strategic Advantage
A well-structured centralised treasury model offers a wide range of tangible and strategic benefits.
Based on our research and analysis, we present quantifiable benefits that companies worldwide have achieved through centralised treasury management:
5-15% |
10-30% |
1-5% |
20-50% |
10-20% |
| Minimised working capital requirements through enhanced forecasting. | Reduced excess cash reserves due to enhanced cash positioning. | Optimising cash utilisation from increases interest income on surplus cash. | Reduced currency exposure losses through improved hedging strategies. | Lower borrowing costs by optimising debt levels and enhancing credit ratings. |
When Is a Company Ready to Centralise?
While every organisation is different, there are some common signals that suggest a business is ready - or overdue - for treasury centralisation:
| Criteria | Description |
Operational Complexity |
|
Revenue Criteria |
|
Geographical Spread |
|
Number of Entities |
|
Transaction Volume |
|
The more of these criteria a company meets, the more value it can unlock by transitioning to a centralised model.
Choosing the Right Centralisation Model
There is no universal model for centralised treasury management. Instead, organisations must choose the structure that best aligns with their size, structure, and geographic reach.
Description
Global Treasury Centers (GTCs) centralise treasury management for multinational corporations, streamlining Cash Management, Risk Management, Funding, and Investments while consolidating positions and improving negotiations and Foreign Exchange transactions across global subsidiaries.
Benefits
- Enhanced visibility over global cash positions.
- Improved bargaining power with financial institutions due to consolidated operations.
- Streamlined risk management through standardised policies and procedures.
Example
A corporation like Unilever, which operates in numerous countries, benefits from a GTC to optimise its cash flow and manage currency risks effectively across its diverse global operations.
Description
Regional Treasury Centers (RTCs) manage treasury functions for specific geographic regions, like Asia-Pacific or Europe.
This model benefits organisations with concentrated operations, handling cash management, risk assessment, and local compliance while balancing global oversight with local efficiency.
Benefits
- Tailored risk management strategies that address local market conditions.
- Faster response times to regional treasury needs.
- Reduced operational complexities associated with managing diverse currencies and regulations.
Example
Coca-Cola has adopted RTCs in key regions to enhance local currency management and regulatory compliance while retaining oversight of global financial strategy.
Description
Shared Services Treasury Centers (SSTCs) integrate treasury activities with other administrative functions like finance and accounting in a centralised unit.
This model streamlines back-office functions, offering services such as cash management and payment processing, ultimately increasing efficiency, reducing redundancy, and lowering costs.
Benefits
- Cost savings through shared resources and reduced headcount.
- Improved standardisation of processes and policies across the organisation.
- Enhanced data analytics capabilities from centralised financial information.
Example
General Electric (GE) utilizes a Shared Services model by consolidating its treasury and finance functions, resulting in improved cash management and operational efficiency.
Best Practices for Implementing a Centralised Treasury Model
Transitioning to a centralised treasury model requires more than a vision - it demands a thoughtful, phased approach rooted in the business's financial and organisational reality. Based on successful transformations, four key pillars stand out.
Overcoming the Common Challenges
Tackling resistance to change
Employees often resist new systems due to fear of the unknown, but this can be addressed by engaging stakeholders early to foster ownership and alignment with goals. Clear communication of benefits—such as improved efficiency and cost reduction—combined with comprehensive training ensures a smoother transition and builds confidence in new systems.
Navigating global and local complexities
Balancing global objectives with local needs requires collaboration with regional teams to gain insights into local practices and regulations. Flexible centralisation models that respect cultural nuances and regional variations enable organisations to align global strategies with local requirements effectively.
Ensuring data security and compliance
Centralised data management demands robust cybersecurity measures like encryption and intrusion detection to protect sensitive information. Staying updated on data protection standards and adhering to local laws ensures compliance and mitigates regulatory risks.
Case Study: Treasury Transformation in Action
- Background
- Approach
- Key benefits quantified
- Overall impact
Background
Acme Corporation, a multinational manufacturing company with operations across North America and Europe, previously managed treasury functions independently within each subsidiary, leading to fragmented cash visibility, inefficient payment processing, and increased exposure to currency fluctuations. To optimise cash flow, reduce transaction costs, and mitigate financial risk, Acme decided to implement a centralised treasury management system across all subsidiaries.
Approach
- Centralised treasury team – Established a dedicated treasury team at the corporate headquarters responsible for managing all cash flows, foreign exchange transactions, and liquidity planning.
- Integrated treasury management system – Deployed a sophisticated treasury management software to consolidate bank account information, automate payment processing, and provide real-time visibility into cash positions across all entities.
- Standardised banking relationships – Negotiated preferred banking agreements with global banks to leverage economies of scale and secure competitive rates.
Key benefits quantified
- Reduced transaction costs:
- 20% decrease in wire transfer fees: By consolidating bank accounts and optimizing payment processing through the centralised system, Acme significantly reduced international wire transfer fees.
- 15% reduction in foreign exchange fees: Centralised FX trading allowed Acme to negotiate better rates and minimise FX conversion costs.
- Improved cash visibility:
- 90% faster cash forecasting accuracy: Real-time data aggregation from all subsidiaries enabled more accurate cash flow forecasting, allowing for proactive liquidity management.
- 30% reduction in cash pooling delays: Centralised system streamlined cash pooling processes, resulting in faster access to available cash.
- Enhanced risk management:
- 25% decrease in FX exposure: By centralising FX hedging strategies, Acme minimised currency risk associated with international transactions.
- 10% reduction in interest rate risk: Optimised debt management through centralised borrowing and investment decisions reduced interest rate exposure.
Overall impact
- Annual cost savings – Estimated annual savings of $2 million through reduced transaction costs, improved efficiency, and optimised risk management.
- Improved financial performance – Enhanced liquidity management and risk mitigation contributed to improved financial stability and profitability.
- Operational efficiency – Streamlined processes across subsidiaries leading to increased productivity within the treasury function.
Conclusion
Treasury centralisation is not a short-term fix—it’s a long-term strategy. For Vietnamese corporations seeking resilience, agility, and financial clarity, centralising treasury functions is one of the most impactful transformations they can make.
It enables treasurers to shift from reactive management to strategic leadership—supporting innovation, expansion, and enterprise-wide performance. As businesses in Vietnam grow more complex, the question isn’t whether to centralise—but how soon to start.
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