WEBINAR ALERT | How to achieve cash forecasting excellence – challenges and strategies

treasuryXL | Nomentia |

 

Date & time: October 20, 2021 at 3.00 pm CET | Duration 45 minutes

Cash forecasting remains one of the most challenging topics in treasury management. With the knowledge and years of experience of our experts within TreasuryXL and Nomentia, we will discuss cash forecasting in more depth. We’ll tackle the challenges that are paired with cash forecasting, and strategies to overcome challenges to achieve cash forecasting excellence.

Join the webinar to learn more about: 

  • Brief introduction to TreasuryXL and Nomentia
  • Short introduction to cash forecasting
  • Why many companies have sub-optimal cash forecasting
  • The challenges with cash forecasting
  • Managing the cash forecasting process
  • Steps to create cash forecast excellence

Click on the banner for registration.

Meet the speakers

Francois de Witte (1)

François de Witte

Seasoned Treasury Expert
TreasuryXL

Huub Wevers

Huub Wevers

Senior Sales Manager
Nomentia

Jouni Kirjola

Jouni Kirjola

Head of Solutions and Presales
Nomentia


 

 

Why You Should Say Goodbye To Spreadsheets

| 29-09-2021 | treasuryXL | Nomentia |

A recent Cash management survey that we did showed that 43 percent of respondents continue to experience issues with their Cash flow forecasting. Unsurprisingly, more than half of the market still use spreadsheets to execute this business-critical function. The million-dollar question is, why?

According to the European Spreadsheet Risks Interest Group, the reliability of a spreadsheet is essentially the accuracy of the data that it produces and is compromised by the errors found in approximately 94% of spreadsheets.

If accurate cash flow forecasting remains one of the key priorities for treasury and finance professionals alike and the market has easy access to affordable, cutting edge forecasting applications, why do we continue to rely on outdated, ineffective forecasting tools?

Common myths prevail that spreadsheets save money, are easy to use & flexible. In the spreadsheet’s defence, it’s a nifty tool, that ticks many of the aforementioned boxes and can work very well with cash forecasting solutions. But, for a growing business looking to mitigate risk and plan for the future, risks run high if you’re relying on a system that’s almost surely flawed, demands hours of manual input effort, prone to human error, exists largely undocumented and which no one really knows how it works.

“After the clever intern, who developed the nifty macros and formulas is no longer around……nobody knows how the application generates the numbers.”

Penny wise, pound foolish 

Spreadsheeting is, by and large, the manual process of gathering, inputting and administrating data. Typically, spreadsheets have been built up and added to over a period of years, becoming cumbersome to manage and share. In an eye-watering number of cases, the person originally responsible for constructing the spreadsheet has long since left the department. No one knows the algorithm behind the macros and no one assumes responsibility for its maintenance, let alone documenting changes and adaptations. The whispered precedent remains, “if it’s not broken, then leave it alone”……… Ouch!

Alternatives are perceived to be more expensive. Excel, for example, is cheap to acquire whilst Treasury Management Systems are expensive with lots of added features that SME’s in particular, don’t require.

Busting the myths

Cost is no longer a plausible reason to rely on spreadsheets for cash flow forecasting. Cloud-based solutions such as Nomentia Cash Forecasting, offer competitive pricing. Modular, on-demand, SaaS solutions have revolutionised application choice. Simply choose the modules you need, pay by the month and no IT involvement required. Free up more departmental time by reducing the number of resource hours required to maintain a spreadsheeting process and the cost-saving just got bigger.

Spreadsheet errors and inaccuracy are by far the most compelling reasons to consider a move to a specialist cash forecasting application. Finance and treasury cannot afford to make mistakes. Inaccurate cash flow forecasts can literally lay to ruin to a company’s business reputation and/or result in a financial loss or penalty. No scare tactics needed.

Mini Case-Study: Conviviality a ‘Spreadsheeting Horror Story’

(Source: The Guardian UK, 21 March 2018)

At first, the drinks retailer Conviviality said profits would be 20% lower than the £70m expected by the City, with £5.2m of the £14m hole that had opened up in its forecast, down to a spreadsheet error. The remainder was a reflection of weakening profit margins.

On 21 March 2018, the Guardian (UK) reported “Firm issues third profits warning; says it will meet investors to raise funds via a share placing’’. The company, in a stock exchange announcement, said it was holding meetings with investors to raise £125m via a share placing that would help it pay a £30m tax bill due at the end of the month, fund overdue payments to creditors and repay a £30m loan.

The company blamed the first shock profit warning on a spreadsheet arithmetic error made by a member of its finance team and weakening profit margins, and then admitted it had not budgeted for the £30m tax bill due this month.”

Conviviality has since gone into administration

Whether or not the use of spreadsheets was the sole cause of this bankruptcy is not clear, but it seems to have been a major contributor. Such cases are exceptional, but they do illustrate how relying on spreadsheets is not a sensible course of action for any finance & treasury team anywhere.

Many spreadsheets also contain, quite clever but complex, macros and apart from keeping these up to date, finance & treasury is responsible for ensuring their integrity. This is something that is not always feasible. Even when errors are spotted it is often very difficult to decode them, especially given the sheer size of the spreadsheets many finance and treasury folk utilise.

Embracing future-proof change

Readily available and affordable cash forecasting applications have, for those organisations who have embraced the benefits of technology, reduced risk exposure exponentially, facilitated real-time & accurate cash visibility, minimised human resource demand, and liberated finance leaders to take a more strategic role across the business. No-brainer.

Sometimes taking a leap of faith, moving away from the old and onto the new, can be a daunting decision. Historical hang-ups, ranging from less than favourable experiences with legacy systems, pre-conceived assumptions around cost implications, and work-flow disruption make it all too easy to decide to ‘leave well enough alone’. Before you take the decision to stick with the spreadsheet that’s done what it apparently ‘says on the tin’ for many years – let’s consider the following:

Back to the future

In a world where cyber security is of the utmost concern and data privacy, e.g., GDPR, is a regulatory requirement, can finance and treasury really afford to run their operations on spreadsheets? Spreadsheet security cannot and does not compare to the advantages of specialist systems that have been built with security in mind. Indeed, some spreadsheet applications lack even basic authentication security, can be easily copied and distributed outside the confines of the business without the knowledge or prior agreement of management.

Spreadsheets were built for convenience-only in a pre-internet world where cyber-attacks and data security were unknown and of no consideration. Spreadsheets were not built with security in mind.

Square peg in a round hole

Spreadsheets don’t grow with your treasury and finance needs. Organisations often try to adapt their spreadsheets to a growing business but soon realise that the complexity of doing so is almost impossible. Adding new accounts and deleting old accounts becomes challenging at the best of times, but managing this critical process in a spreadsheet, whilst trying to drive the business forward, is often a step too far, leading to errors and oversights.

Treasury and finance, by its very nature, consists of a number of different individuals performing a variety of activities, sometimes at the same time. This results in the sharing of valuable company information between several people and departments in any one day. Managing this process on spreadsheets can be difficult and nigh on impossible, even if some automation is achieved. Typically, only one person can update a spreadsheet at any one time so the workload that needs to be shared becomes inefficient and confusing. Maintaining full transparency around additions, edits, and alterations are off the table. Once an edit, or error, is made on the spreadsheet, it remains invisible and untraceable until something goes wrong. In addition, identifying the point of error-impact is often a time-consuming, futile, and frustrating exercise for some unfortunate departmental executive, even if they have the necessary investigative skills.

Doomed to repeat the same mistakes

Spreadsheets are not that good at quantifying or qualifying historical data, and treasury & finance needs this data regularly. That is not to say data cannot be stored in earlier spreadsheet versions, but due to the way they work, it is not a simple task to access, view, assess, and report this data as efficiently and effectively as modern cash management applications. Losing valuable historical data for comparison and variance purposes is a high-risk consideration. Accidentally saving over historic files, or indeed losing files altogether, is a terrifying experience we’ve probably all experienced at some stage in our careers. Notifying management of a spreadsheet faux pas is just as bone-chilling, remaining undisclosed and causing further inaccuracy to forecast outputs.

As alluded to in an earlier blog ‘Five expensive myths in Cash Forecasting’, there is a very real chance that the person who created the original spreadsheet has moved on and left the company. How many finance and treasury departments have found themselves in a position where a mega spreadsheet, long lauded as a ‘work of art,’ is no longer sufficiently supported and documented with non-existent instructions on how to maintain or update the worksheet.

Cassette recorders, big hair, leg warmers, the Rubik’s cube, Walkman, and mobile phones the size of small suitcases are all legacies from the 1980’s. Technology and hairstyles have moved on….. so should cash forecasting applications.

 

 

 

Which Options Are There When It Comes To Bank Connectivity?

15-09-2021 | treasuryXL | Nomentia |

In this blog, we want to give an overview of the different options for bank connections from host-to host, direct connections through regional standards and SWIFT. On top of that we’ll also take a look at open banking APIs and what possibilities they might hold for the future.

Bank connections enable corporate customers to exchange messages with their banking partners. Companies need to have a relationship with at least one bank, in practice there are typically several banks involved, for example to exchange account information and sending payments. Bank connections are so to speak the backbone of your treasury department because they ensure the uninterrupted flow of information between your business process tools and banks, allowing you to create accurate cash forecasts, manage liquidity and the likes. Bank connectivity will remain a topic that corporate treasury departments need to decide how to approach. Now, let’s look at the different options for creating bank connections.

Direct host-to-host connections

One of our webinar polls showed there are still 30% of our respondents who maintain host-to-host connections with their banks. This means that typically the IT department sets up bank connections to specific banks. How those work in specific then depends on the bank. With some banks a host-to-host connection is needed for each country where the company is operating. Luckily many banks offer single point of entry connectivity which means that once you’re connected, you can use it to operate cash management messages in all or multiple countries where the bank has branches.

Since the bank is hosting the service, it also means that the bank is dictating all technical requirements and corporate customers need to adapt to changes the banks might make.

And change is imminent, especially when it comes to messaging formats, communication protocols and security requirements. There are for example client certificate renewals that come up usually every two years. Root certificates expire more infrequently but cause more maintenance work.

Another quite timely example is the Transport Layer Security (TLS) protocol version upgrade. TLS certificates not only have to be renewed from time to time, but older TLS protocol versions have known vulnerabilities and the banks are enforcing their clients to use newer versions all the time.

Maintaining direct host-to-host connection requires you and especially your IT department to make a commitment to maintain these connections day in and day out. Which requires special technical expertise from the IT department and a lot of resources, especially when you employ many host-to-host connections in your ecosystem.

Direct connections through regional standard protocols

The EBICS (Electronic Banking Internet Communication Standard) is a standard protocol that is used in Germany, Switzerland, and France. Also, banks in other countries are testing this standard.

The challenge with EBICS has been that different countries have their own versions of the standard. In 2018 EBICS 3.0 was launched with the goal to harmonize the differences and to make it easier to communicate across borders. In practice Germany and Switzerland are still using EBICS 2.5 and it will take until November 2021 until EBICS 3.0 becomes mandatory for banks in Germany.

Some international banks have adopted EBICS into wider use. Which means that corporations familiar with EBICS may use it for message exchange and authorization in other countries as well. Only the future will show if EBICS fulfils its vision of becoming the pan-European standard protocol for bank communication.

Connections through SWIFT

Companies can connect directly to the SWIFT network and with that get connected with over 11 000 financial institutions in more than 200 countries. SWIFT is hosting and maintaining the global network for that. It’s highly secure and reliable. It’s a single gateway that almost sounds like it opens the door to paradise for you, at least in the mind of someone who spends his time building host-to-host bank connections for single banks. You are empowered to change banking partners based on your business needs without having to worry about establishing new connections.

SWIFT has a sort of do-it-yourself approach by providing Alliance Lite2 to companies. And here comes the other side of the coin. A direct connection to SWIFT is costly and requires time and resource-demanding integration. In addition, you need to comply in full scope with the SWIFT Customer Security Programme (CSP) that requires all their members to protect their endpoint, because naturally, they need to protect their network.

Most corporate customers use a SWIFT Alliance Lite2 Business Application (L2BA) provider or a Service Bureau for the connection. In the L2BA model, a service provider takes care of handling all necessary requirements to connect to the Swift network and you buy your bank connections pretty much as a service. Often this is packaged with other products and solutions you might use.

Open banking APIs

Open banking APIs are one of the most interesting developments. We already see banks all across Europe offering premium APIs for corporates that go beyond what is possible today.

Open banking APIs are set to bring a real-time component to the game that hasn’t been there so far. In the past there was no way for external systems to fetch for example real time balances from banks, but this is about to change. While as previously, corporations would execute batch payments, with open banking APIs this will be possible whenever a payment is needed with instant effect. Looking at balances and payments is the beginning of new solutions that will be available to corporate treasury.

Open banking APIs is something that companies and providers such as Nomentia will need to take into account for their roadmap because this is clearly where we will be able to provide innovative solutions for our customers in the future.

What’s the verdict?

It would be great to give an easy answer to this question. But it’s just not that simple. As I outlined above, all connection methods have pros and cons It really depends on your needs and internal structures what you need.

WATCH OUR WEBINAR ABOUT BANK CONNECTIVITY

 

 

Nomentia Acquires TIPCO: A union of exceptional products and teams

08-09-2021 | treasuryXL | Nomentia |

Nomentia announced yesterday that the company has acquired TIPCO Treasury & Technology. Shortly after the news was released, we had the chance to sit down with Jukka Sallinen, CEO of Nomentia, and talk about the announcement, what does the acquisition promise for finance and treasury professionals globally, and what does the future hold for Nomentia.

The acquisition of TIPCO is the latest milestone in Nomentia’s history. What’s the reason behind the transaction?

There are a couple of reasons. First and foremost, we’ve felt that both companies share a very similar mission. We want to provide unparalleled solutions for and with our customers. TIPCO’s Treasury Information Platform (TIP) is an exceptional treasury management solution that is widely known in the DACH region, and TIPCO has been also famous for its acumen in treasury. Our combined solutions and domain expertise make us one of the strongest players in the cloud treasury and cash management space. I have no doubt that our current and future customers will benefit from our combined product portfolio. Another good reason for joining forces with TIPCO is that we’ve strongly felt that both companies have had surprisingly similar cultures – both have a very healthy obsession for providing the best solutions for our clients and we take pride in what we do.

 

Tell us more about the merged product portfolio and how treasury teams will benefit from it?

Before the acquisition, Nomentia cash management was consisting of Bank connections, Payments, Cash Forecasting, In-house banking, Bank Account Management, and Reconciliation solutions. Adding TIP to the solution mix, we can now provide robust and sophisticated cash flow forecast and cash visibility solutions, as well as solutions for trade finance, FX risk, treasury reporting and treasury workflows, and more. TIP has been always loved by the users and now all Nomentia customers will have access to TIP.

Today, it’s not feasible for treasury teams and finance teams to choose one provider for all their needs or trust that their ERP system would provide a working solution alone. Treasurers should be able to choose the solutions that can best resolve their challenges and meet their needs. To get the best outcome, finance and treasury teams often need to work with multiple vendors – taking the best solution from each. Of course, that’s not always ideal from IT’s point of view, but that’s where our team comes in to take care of the implementation plan together with the client and integrate with their existing systems and banks. We trust that a lot of our current customers will find new solutions from our updated offering that can help them to overcome their current challenges.

New customers will find that Nomentia can offer the widest cash and treasury management solution portfolio on the market to help them build better treasury processes.

 

How does the acquisition affect Nomentia’s future?

During the past year, Nomentia has taken big steps toward becoming the global powerhouse for treasury and cash management. After last year’s merger of OpusCapita and Analyste, we’ve successfully got our footprint in many new markets, and we’ve been especially growing in the DACH and Benelux regions besides continuing to be the number one choice of treasurers in the Nordics. Acquiring TIPCO and merging the two product portfolios will help us to strengthen our position in Europe even more.

Our team has been also growing significantly – it’s always great to work with people that are experts in their field and can truly help our customers to develop their operations. Together, we will exceed our customers’ expectations with our strong product portfolio and even stronger team. Personally, I am thrilled about the news and can’t wait to roll up our sleeves and get to work together with our new colleagues!

 

Read the press release to learn more

 

 

What to Consider When You choose your Bank Connectivity Strategy? 7 Important Criteria

| 01-09-2021 | treasuryXL | Nomentia |

Most organizations would benefit from some form of Bank Connectivity as a service. But just deciding on outsourcing bank connectivity won’t magically make all those connections appear. In this blog, we’ll cover 7 important criteria you should think of when evaluating different options.

1. In which banks do the majority of your payments flow?

Make a list of all banks that your organization is connected with and include all banking relationships from all your subsidiaries. We have noticed in interactions with our customers that this first step can be eye-opening at times. Often, we have an idea of the different banking relationships but then there are still local bank relations that might not be that visual to your treasury function. It also provides you with a good understanding of how many bank connections you would need and whether you would benefit from simplifying your banking landscape before implementing a bank connectivity solution. If your organization is only working with 5 banks altogether the story is very different from an organization that has relationships with 20+ banks.

After mapping this out, you might want to apply the 80/20 rule: typically, you would first set up connections to the strategic banks that cover 80% of your payment flows. A cloud-based software from a Cash Management specialist will most likely be able to provide you these connections as part of their out-of-the-box functionality.

2. Evaluate your use of local banks

Even if you expand the use of strategic banks to more countries, you might still find a set of local banks that you cannot replace. Typically, a discussion about bank connectivity increases in complexity when the long tail of local banks comes into play. That’s where you need to ask yourself why you are working with local banks. Is it for collecting money, for making payments from a regulatory point of view or because of specific needs within your local business?

Having visibility on Cash is straightforward while covering payment flows is not easily justified from a direct cost savings point of view. At the same time payment fraud plays a role in the local banks. You might want to consider a solution to replace internet banks for manual payments with a centralized solution. Then, the business case cannot be backed up by direct cost savings, but cost-efficient risk mitigation.

3. How consolidated is your banking landscape?

After mapping out all your banks in a first step, you know your strategic banks. Now it’s time to take a look at which countries are covered by these strategic banks. Would it be a good time to reduce your banking relations by using a certain set of strategic banks in more of your countries in order to reduce the number of domestic banks?

4. How many file formats and payment types do you have in use?

It is a different thing to set up credit notes and treasury payments only, as opposed to also including domestic payments, salary payments, and tax payments. We recommend having a solution for all your payment types and file formats: this is the only way to get rid of the internet banks and the tokens.

5. Are you concerned about payment fraud and information security?

You should have a solution to cover all payment types in all countries with all banks. That is the only way to have a full audit trail and control in every country. A centralized payment process enables centralized validation and control. We have covered the topic of payment fraud extensively.

In our case, having bank connectivity as a cloud service lets you benefit from a platform, which invests annually roughly 1bn$ in information security. From an information security perspective, this lets us concentrate on application-level security, which is annually audited by 3rd parties.

6. Are you interested in having transparency in your bank fees?

Modern bank connectivity solutions enable transparency in banking fees: Having bank agreements and the related fees included and matched against the banks’ reports. Even more transparency can be gained with services like SWIFT GPI: SWIFT GPI enables banks to provide bank fee information for the e2e chain. Not all banks support these features yet.

7. Choose wisely

Once you go through the questions and mappings outlined above you are at a good place in making your decision for the right bank connectivity provider. It might seem tedious at times and one might think of bank connections as a mere technical thing, but they are so much more. We feel this is a perfect moment to evaluate all your processes and look at ways to harmonize them.

It’s also a great way to work closely together with your colleagues. We recommend approaching this topic in a project team between treasury, finance and IT: From an IT perspective you want to minimize the IT-footprint, finance will run the daily operations and treasury sets the policies and controls.

DOWNLOAD OUR BANK CONNECTIVITY WHITEPAPER

 

 

Are You Still Thinking About Virtual Accounts or Already Implementing POBO and COBO?

| 04-08-2021 | treasuryXL | Nomentia |

Companies are increasingly focusing on harmonising their banking landscape to obtain better visibility of Cash balances, to mitigate Fraud Risks and to improve automation and security in their treasury processes.

In a world where the next fraud attempt is lurking around every corner, no company wants to create processes with different banks, tokens, and user lists for each of their different local entities. With this harmonisation, companies start to rethink their processes, and this naturally leads to in-house banking, including POBO and COBO. This is because the question soon arises as to why, for example, not all euro payments should be handled from one account, if that were possible within the regulatory context.

Setting up an in-house bank doesn’t happen overnight. It’s the result of several steps taken to centralise an organisation’s cash management. The six steps are:

  1. Managing corporate bank account structure. You can read more in our bank connectivity guide.
  2. Harmonising and centralising payment process. It’s also a way to mitigate the risk of payment fraud. You can read more in our payment fraud ebook.
  3. Streamlining internal payments. This is a logical next step after managing your corporate bank account structure.
  4. Establishing POBO.
  5. Establishing COBO.
  6. Centralising control over financing.

Today we would like to focus on POBO and COBO. They are the ultimate goals of a payments project because they create transparency and make cash management processes more efficient and automated. This sounds great, right? So why, then, aren’t all organisations just setting up POBO and COBO and calling it a day?

Moving from disparate processes, tools and a varied (if you want to be positive) banking landscape to a centralised treasury doesn’t happen easily. Companies might even feel hesitant about implementing on-behalf-of structures because their set-ups are too complicated. That’s an interesting point and I’d like to stress that the more complex a company is in its cash management or enterprise resource planning (ERP) structures, the more they will benefit from an on-behalf-of set-up.

Increased control, transparency, and efficiency

In the POBO model, the subsidiaries process the payment data in their systems according to internally harmonised processes, and the group treasury decides on the most cost-efficient payment method and banking connection. The group treasury is able to centralise cash outflows, which significantly enhances the safety of and control over the payment process.

COBO and POBO make it possible for the group to reach the highest level of independence from banks and maximise cost efficiency.

The benefits of POBO and COBO can be summarised into increased control, transparency, and efficiency. But there are also challenges associated with on-behalf-of structures that need to be evaluated before setting them up.

Where there’s a benefit there’s a challenge

POBO is possible for most payment types, but some are regulated in such a way that they cannot be completed by the on-behalf-of method. This is often related to tax or salary payments. Legal restrictions specific to each country can make it difficult to set up POBO and companies need to assess whether the benefits they will gain are worth the effort. There is no one true answer for all companies; it really depends on the level of complexity they are facing.

Another reason why companies might feel hesitant about implementing POBO is because they use multiple ERP systems. If that is the case, the mere idea of POBO is simply far too complicated. To be honest, when we hear that ‘excuse’ we see it as a challenge, and it makes us happy. Because this then means we can talk about payment factories –especially our payment factory solution. We can create a process that makes it possible for all entities to pay with internal bank accounts as payments-on-behalf-of. I’d even go so far as to say that the more ERP systems a company has, the more benefits it will get from POBO.

When it comes to COBO, the main challenge is that companies are dependent on their buyers to know what to collect from whom. Companies need to retrieve all accounts receivable (AR) information and maintain an overall view of account balances. In some countries that might be relatively easy, as invoices generally have a reference number. But that’s not the case in all countries. It comes back to identifying incoming payments correctly. For example, this can be achieved by matching payments to open invoices. A solution for automatic bank account reconciliation would be able to automatically match incoming payments based on information provided, for example in the message to the right AR account. We took a closer look at the topic in this blog post about how an in-house bank with modern matching solves the COBO challenge.

That said, of course, it’s not an easy task to create on-behalf-of structures, but it’s something that organisations will greatly benefit from if done correctly.

 

 

 

The Art of Selecting Suitable Treasury Technology

| 21-07-2021 | treasuryXL | Nomentia |

Many Corporate Treasury functions are aware of the importance of utilizing technology to deliver improved efficiency and control in their treasury operations. This is being driven by the increasing pace of regulatory change, continuously evolving business models, volatile economic conditions, and fast-growing technological developments. Also, treasurers are recognizing the benefits of a strategically focused ‘smart treasury’ – one that utilizes the latest technology to be more integrated, automated, and optimized; adding value to the business.

However, as the treasury technology landscape continues to evolve at a rapid pace, many organizations find it difficult to successfully adopt this technology, either because their entry point is not clear or because they had previously made the leap and are now struggling to keep pace with the evolution. There are a multitude of options and considerations for those looking for the right solutions, which are important to understand before deciding on what is right for an organization.

We have outlined below some key insights and considerations when selecting suitable technology solutions.

Develop a treasury technology roadmap

Your roadmap should consider essential functional requirements that must be satisfied immediately – current hot topics include improved cash visibility, robust and accurate cash forecasting, a more efficient payments and receivables process, and fraud prevention. All of these areas are ‘must-haves’ for many organizations, so the first building block for the roadmap is finding a solution that can satisfy them.

However, alongside considering your immediate needs in your roadmap it is also important to plan for the future. To do this, you must look at the internal and external drivers of change for your business and how the treasury will need to support that.

An example of an internal driver could be where accelerated geographical growth is expected, and therefore treasury will be required to rapidly connect with new banks, set up new accounts, and adopt new currencies. This comes with challenges around dealing with country-specific requirements for payment formats and new types of bank connectivity, so your chosen technology solutions should be capable of adopting these easily.

Similarly, for external drivers you can look at the current markets you operate in and identify any expected developments in payments and banking initiatives. Current examples of external drivers for those operating in the Nordics and Europe include the P27 Nordic payments initiative or PSD2 electronic payments services regulations. Once again, your technology solutions should be chosen to ensure you are able to keep pace with these changes.

Self-hosted versus SaaS solution

We find that a number of treasuries have had historic on-premise solutions which have not always kept up to date with the developments in functionality and the market. As a result, treasurers have had to establish a number of in-house workarounds which are costly and complex to maintain.

To improve upon this, most technology companies now provide a solution that is delivered as software-as-a-service (SaaS), a deployment method that comes with several benefits.

SaaS solutions are hosted in the ‘cloud’ and hence there is no need for the organization to manage technical matters such as maintaining appropriate servers, backups, etc. Because the solution is managed in the cloud by the vendor, there is no longer a need for users to manually upgrade their solutions and perform the associated regression testing – upgrades are tested and deployed by the vendor on a regular basis, ensuring all organizations using the solution are using the latest version containing the latest functionality. Over the past years, we have seen an increasing number of solutions being offered as a SaaS solution and can see this as a trend that will continue to dominate in the future. You should also consider your organization’s overall IT strategy as it is critical to ensure you are aligned with this.

All-in-one versus best of breed

Over the years we have seen significant shifts in the treasury technology market with innovative and specialized Fintech solutions driving advancements in the market. These applications are often focused on specific areas of functionality rather than covering the broad set of requirements a treasury function may have. They are often meant to be complemented by other platforms to form a suite of treasury applications that cover all requirements.

Hence, the key consideration for an organization is whether to opt for an ‘all-in-one’ TMS or to deploy a stable of ‘best of breed’ solutions. An all-in-one TMS comes with clear benefits such as a single platform to handle all treasury transactions/processes and fewer interfaces to monitor and maintain.

However, for some organizations the all-in-one TMS comes at a significant initial and ongoing cost commitment when their requirements aren’t as broad compared to the functionality on offer. Although many of the vendors of all-in-one TMSs allow organizations to choose which modules of the platform they utilize for a reduced license fee, it is often not the case that if you are only using 50% of the functionality you will be paying 50% of the price. A much more palatable solution comes in the form of best-of-breed solutions, which deliver a more flexible technology landscape utilizing specialized systems that may address the many unique requirements of a treasury function, at a lower cost than the all-in-one TMS. Previously the use of multiple platforms was not favorable due to difficulties that could be faced such as technical integration and reporting. However, the rising use of digital APIs has improved the way systems interface with each other. Also, data-warehouses coupled with BI solutions has enabled reporting based on data sourced from a variety of platforms.

Typically, when implementing a new system you will sign a license agreement for a minimum 5-year term, so it is important to ensure you have considered the suitability of the technology partner(s) and the functionality to support you in your digitalization over many years. During the selection process, it is important to perform an analysis of partners and vendors focused on their experience, innovation roadmap, development track-record, reliability, and support model. These are attributes that will demonstrate to you that the vendor is able to support your business not only now but also in the future, as your operations and the demands placed upon the treasury function change as your business grows and evolves.

Final comments

One size does not fit all treasury functions, as each organization’s treasury remit and activities will drive the appropriate solution or solutions.

 

Nomentia Cash Management Release Info Event

| 15-06-2021 | treasuryXL | Nomentia |

Welcome to the Nomentia 2021 first release information event this year to hear and see the top new features and updates of the Cash Management solution.

The webinar is on June 22nd 15:00 CET / 16:00 EET with a duration of 45 minuten. As we are updating the solution frequently, we will invite you to our biannual release information events so that you can stay up to date with the latest releases. In this session, we will introduce the best picks of the new features from all Nomentia Cash Management modules.

In the webinar, we will cover the following areas:

At the end of the webinar, you will have the opportunity to ask questions.

The webinar will also be recorded and we will send it to you shortly after the webinar has ended.

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Meet the speakers

Jaakko Kilpinen

VP of Product and Solutions, Nomentia

Jaakko has over 20 years of experience in corporate cash management and has deep expertise in cash forecasting, netting, and In-House banking. Jaakko has previously held e.g. a position as Group Treasurer in a publicly listed Finnish company.

Pamela Quiroga Badani

Solution Manager

Pamela is a finance and accounting professional. Previously, Pamela worked as a Finance Analyst and for the past four years, she has been working with implementations in consultant and project management roles.

About Nomentia

Nomentia is a Nordic powerhouse for global cash management. We believe in a world in which businesses can make the right decisions no matter how unpredictable the times are. Our SaaS-based platform offers solutions for cash forecasting and visibility, global payments with bank connectivity, reconciliation, in-house banking, guarantees, and FX dealing. We serve 2,300+ clients in over 100 countries processing more than 200 billion euros annually. Cash is king!

 

 

 

 

 

 

Payment Fraud | A 750 000 euro Financial Scam that could happen even to you

| 02-06-2021 | treasuryXL | Nomentia |

Have you read the recent news on how Bol.com deposited almost 750 000 euros into a fraudulent bank account over a year ago? Simply, they thought they were making a payment to Brabantia, a household goods manufacturer. If you are not familiar with the story, here is it in a nutshell:

At the same time, Brabantia did not receive the payment, so obviously, they took a lawsuit to the court. And that was the point when the court discovered that Bol fell for a financial scam.

It all started with a legit-looking email like usually

In November 2019, Bol received an email in poorly written Dutch. Nevertheless, the email looked legit like it has been sent from Brabantia including the company’s logo. They were asking Bol.com to transfer the outstanding payment to an account in Spain.

The Bol employees fell for the trick. No surprises there, as these emails can be very well-crafted and if you have never seen one before, you could become a victim too.

The court thought the scam email was obvious and easy to recognize 

Bol tried to get out of paying Brabantia claiming that the company’s employee fell for a business email compromise, and they were accused that they did not use two-factor authentication in the Microsoft 0365 environment. The story doesn’t tell if the email was really sent from Barbantia using a stolen username and password but hopefully, it still makes you want to protect your accounts with multi-factor authentication (MFA).

Despite this, the court ruled in the favor of Brabantia and ordered Bol to pay the outstanding payment. The reasons for it were the following:

  •  The court believed the email was clearly a phishing email due to grammar errors. Previously, all communication between the two companies happened in Dutch, while the scam email was written in mixed Dutch and English.
  • The court thought that Bol should have been suspicious about the odd request to transfer money to a Spanish bank.

How to avoid something like this happening to you? 

There are a few tips that you should always remember.

  1. Always be suspicious: Always be suspicious, especially, when you are handling large payments. If you have the slightest doubt about the legitimacy of the request, something is probably wrong.
  2. Never accept a payment alone: In this case, always ask for help! Never send out payment before at least you had a second pair of eyes looking at it. In most companies, that’s an everyday process.
  3. If you are in doubt, ask for help: Still, if there is even one person that is a tiny bit unsure, don’t process the payment. Ask for more help within your treasury or financial department, procurement, or even from your cybersecurity department. Your cybersecurity team will be able to tell with high likelihood whether the email is real or not.
  4. Use a payment hub: Payment hubs come with features that enhance the security of processing payments. Consider using the following: Workflows to manage authorization of different payment flows | Approval limits for different payment types | Templates to limit and control releasing of manual payments
  5. Strict processes to update supplier master data: Supplier master data should be correct in the ERP system. It should only be managed by procurement who has strict processes in place to validate the possible changes before updating master data. Always execute payments according to registered beneficiary bank account details.
  6. Don’t skip the CyberSecurity and phishing training: While you may think it’s easy to spot phishing emails, it’s not. Especially when we are talking about financial scams. Spear phishing is a growing business and it’s expected to grow to 1,4 billion US dollars by 2022. Scammers can work even two weeks on crafting an exceptional financial scam to lure in financial professionals to make a large payment. Good phishing training should be targeted for your expertise and prepare you through challenging exercises to spot potential scams. It’s always better to report an email to your security team and ask for their opinion than make a payment and regret it later.
  7. Care about security: Security is a bigger part of treasury operations than you would think. Make sure that you care about security. Things like using a strong password, updating the password frequently, using multi-factor authentication, or not sharing user rights matter and can do a lot.

When you care about security, you also show a good example to the rest of the team.

Trust your instinct and the learnings of this story and the security training

Always rather take longer to process the payment than pay a scammer! Creating good and strict payment processes and workflows can help with this. Also, trust your own and co-workers’ instinct if you feel like something is off.

Stay curious about financial scam news to know what the latest trends are and how hackers will try to trick you. Work closely with your security department! It’s in everyone’s best interest to avoid falling victim to a scam.

It’s not a question of whether you will receive financial scams and phishing emails, but when you will get them. Be prepared that you will be targeted and face the situation with confidence to avoid making a payment.

About Nomentia

Nomentia is a Nordic powerhouse for global cash management. We believe in a world in which businesses can make the right decisions no matter how unpredictable the times are. Our SaaS-based platform offers solutions for cash forecasting and visibility, global payments with bank connectivity, reconciliation, in-house banking, guarantees, and FX dealing. We serve 2,300+ clients in over 100 countries processing more than 200 billion euros annually. Cash is king!

 

 

Barbara Babati

Barbara is working in the marketing department at Nomentia. Previously, she worked in cybersecurity and data integration industries.

 

 

 

 

 

Successful Businesses Excel At Cash Management

18-05-2021 | treasuryXL | Nomentia |

Nomentia commissioned Forrester Consulting to evaluate the current state of Cash and Treasury management in large global multinationals, the challenges, and the opportunities to move forward.


Embrace future-fit Cash management

We commissioned Forrester Consulting to create a study to understand how global decision-makers will embed cash management excellence into daily operations, processes, and decision-making in 2021 and beyond.

  • Cash flow management tools | To improve visibility and forecasting, companies are adapting cash management, payment efficiency, and cash flow liquidity tools.
  • Improve cash flow visibility | Cash flow transparency, flexible reporting, and data collection can eliminate the high costs associated with the lack of cash flow visibility.
  • Automate core processes | Automating core day-to-day tasks while guaranteeing payment security brings efficiency into the high complexity of treasury operations.

83% of decision-makers at large multinational enterprises say that low Cash visibility has hidden costs 

Understand the cash flow, payment visibility, and efficiency ->  Decision-makers agree that improving data analytics, increasing cash management and payment efficiency, maximizing cash flow liquidity, and improving cash flow and finance reporting are their top priorities in 2021 and beyond.

67% say it’s challenging or very challenging to collect data on cash flow

Technology can help to enable better cash management. Treasury management solutions with analytics, security, and automation can turn treasury from a cost center to a strategic revenue-creating opportunity.

52% of business leaders are prioritizing adopting SaaS Treasury management solutions

Download Study

Learn how companies are enhancing their cash excellence to strengthen and transform cash management operations.