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 The Interim Treasurer

The interim treasury ‘function’ has grown steadily over the past ten years, fuelled by demand from companies, more flexible working practices, and a supply of experienced treasury personnel.  This article addresses the reasons for the demand and the supply, and how different assignments progress.

When do companies use interim treasury services?

Many companies need access to detailed treasury expertise for short, relatively concentrated periods, to arrange borrowing facilities, install a new treasury system, and manage other specific projects, or cover for the absence of a key treasury member, which may be either planned or unplanned. In some cases, where a company is setting up a treasury function, there is a good case in favour of using an interim treasurer (the interim) for an initial extended period, rather than make a permanent appointment, which might not be sustained over the longer term. Whatever the case, the circumstances are likely to be unusual or exceptional and the person recruited to handle that situation needs to be able to do so. 

The supply

When seeking an interim, the choice is usually between the person who is ‘between jobs’, who might be happy to join the company on a more permanent basis, or the experienced interim, who has a broad range of treasury experience and expertise, who is used to moving from company to company, and project to project. The experienced treasurer who is looking for another position may be perceived as being a ‘safe pair of hands’, yet this sometimes gives rise to a slightly condescending attitude by the company, who may regard themselves to be in a buyers market. Some of the larger consulting firms are occasionally willing to supply their younger treasury consultants or auditors for this role as it enables both the company and the consultancy to benefit from the experience, whilst supporting the relationship between the two. These arrangements can work well, but are quite difficult to organise and are almost impossible to repeat.

How it works

No two appointments are the same, and each one depends on the attitude and the relationship between the company and the interim. As it often takes as much as a year to gain a full understanding of the business of a company, and how it works, it is usually necessary for interims to confine themselves to the immediate assignment, together with any other aspects which it is essential to understand, and not to get bogged down in unnecessary history, detail or internal politics.

If the appointment is to cover for a planned absence, the permanent employee concerned can sometimes feel vulnerable, which the experienced interim will understand better than the employee. However, the degree of success will depend on the employee being able to ‘let go’ in the confidence that the interim has no intention of replacing them permanently. It is in their joint interest for a detailed and amicable handover at both ends of the contract, to enable the interim to be as effective as possible. Sadly, it is not unknown for the permanent employee to undermine the authority of an interim before they depart, which makes the role much more difficult to manage effectively. Even though everyone accepts that the interim is only in place temporarily, the arrangement does work best if they are accepted into the company by all of the other staff as well as the organisation as a whole. This means full access to systems and facilities, although that has to be managed carefully so as not to compromise the separate taxation status of the interim. 

Sometimes an interim is needed whilst a permanent appointee is being recruited, and is drawn into that recruitment process. In this case, whilst the prime responsibility is to the company, it is frequently easier for the interim to see the ‘wood for the trees’, than either the company or the candidates. It may be easier therefore for the interim to express candid views about an appointment or a situation, without any internal ‘political’ involvement. Whilst even these views might be misconstrued, it is easier for someone who is both temporary yet experienced to air them, and to be objective about issues within a company.

The function for which an interim is initially recruited to handle is quite often not the one which ends up being done. In some cases, the role expands, as more tasks are added to the original one, whilst in others the original role dissipates, often towards the end of the assignment. Companies and personnel within treasury can often change significantly over the period of a long contract, and it can come as a surprise to new personnel when the time comes for the interim to leave, as they need to be able to provide an ‘air’ of permanence. 

The interim is also likely to become an ‘insider’ for share dealing purposes, but without benefiting from any share option schemes.

Systems and Software

Interims need to look forwards and backwards as far as software is concerned. They need to keep up to date, to be able to use the latest software or to be able to use some of the more obscure systems on which some companies have standardised, as well as the different Electronic Banking and Treasury Management Systems. Interims are often surprised about the ease with which they gain access to different systems which can reveal serious security shortcomings.  They have to adjust to different company cultures, but not to take any negative cultural aspects on to the next company.

The Cost

The cost of an interim treasurer is a matter of considerable debate, with companies pressing for a cost as inexpensive as possible, and permanent employees making direct comparisons with their own packages. However, the interim treasurer’s skills are particularly specialised, and it is not possible to make a direct comparison with other interim markets. Unless a company employs the interim on their payroll on a fixed term contract, the main practice is to employ them as a contractor either directly or through a company used by the interim for that purpose. The existence of a company to support this role is probably the clearest indication of whether the interim is ‘filling in’ or regards long term interim treasury management as a role itself. In any case, the amount paid to the interim needs to cover tax, national insurance, pension provisions, medical insurance and probably VAT, whilst the work invoiced is generally the time worked, without payment for holidays (irrespective of any European employment regulations). Contracts can range from just a few days to periods in excess of a year, with shorter contracts being more highly paid.

The specialist treasury employment agencies are most likely to be able to provide a range of candidates and will charge a commission for the duration of the contract, as a percentage of the amount received by the interim. They will probably also charge an additional commission if the interim joins the company permanently. Some appointments are also filled using the ‘treasury grapevine’, with the long term interims keeping in touch with each other and referring enquiries to each other. The informal treasury network is probably the most difficult to define but is easy to access for members of the Association of Corporate Treasurers (ACT) and their companies.

Interim treasury management should not regarded as an easy option for those entering the role. It can offer a wide range of interesting and challenging opportunities which other treasurers cannot expect to experience in a single company, although it can also be demanding, stressful and uncomfortable. Those who undertake interim treasury functions over the long term, usually find it stimulating to work in different companies and industries, and it can enable them to develop a portfolio of other interests, both paid and unpaid (including making a more active contribution to the ACT). Above all, interims need to be flexible in their approach, being prepared to fulfil routine and basic treasury functions, whilst knowing, understanding and addressing the strategic and management issues when required to do so. Interims also need to be able to handle new issues of which they do not have direct experience, and will be expected to cope with unpleasant and unsatisfactory situations, which can appear without notice. They need to be able to cope with the uncertainty which grows towards the end of each contract, although in practice there is often little or no time between assignments.

April 2012


The UserCare Treasury Consultancy Limited