Tearing Down Cash Silos

How Murphy USA improved cash forecasting by opening lines of communication companywide.

As Murphy USA prepared for its spinoff from Murphy Oil two months ago, cash management was a key concern. The new company wouldn’t be able to borrow as easily as Murphy Oil can, so treasurer Kristi Clay and manager of cash management Todd Gilreath needed better real-time visibility into their cash position and forecasts. The company engaged a team of Deloitte & Touche LLP advisers led by Carina Ruiz, partner, and Prashant Patri, senior manager, to assist.

Not only did the project dramatically improve cash management, but it also opened up new lines of communication companywide and boosted visibility between business units. Treasury & Risk sat down with Clay, Gilreath, and Patri to discuss how Murphy USA broke down the silos in its corporate culture.

T&R:  Do you get conflicting forecasts from different business units?

TG:  Sometimes we do. That was a big problem up front. Early on, we showed large cash swings because two groups wouldn’t be aligned. We look at this every week. And not only do we get their finalized forecasts, but we get all the background information so we can see what’s driving each part of the overall forecast. For example, we might see on the forecasts that volumes are consistent from last week to this week, while pump prices and margins are down. If the forecasts show we still have cash, then we can dig into the backup sheets to find out why. Maybe our supply group is selling more to third parties, so we’re making up the difference on that end.

T&R:  How does Murphy USA benefit from the improved visibility into your cash position?

TG:  To be honest, business has been good, so cash-wise we’re doing well. We’ve been an independent company for a month and a half, and we’ve already paid down on some spin-related debt because our executive team had confidence that they understood our cash position and the direction of the company.

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