Digital Guarantee Management: Move from tedious paperwork to electronic process management

| 22-10-2018 |  TIPCO 

“Three hundred and seventy-five thousand and thirty-three Swiss francs”. If you are involved in guarantee management, you’ll know that it is often still necessary to write guarantee volumes in words. Besides this, treasurers also spend lots of time dealing with complex requests, ticking numerous boxes correctly and accurately transferring addresses. The margin of error is zero.

Guarantee management is a specialist area where details really matter, and where a well-trained eye, top levels of concentration and lots of hard work are preconditions. At corporate groups, this often involves many subsidiaries and therefore numerous players and parties.

When a subsidiary needs a guarantee, it often takes several days and no-end of coordination until the bank guarantee is finally available. During these tedious coordination processes, it is often necessary for a colleague to pick up the phone after the fifth email and personally ask about the guarantee – but that doesn’t make things any more efficient. Double data entries are not rare, cost everyone involved lots of time and increase the error rate. And, if high volumes require several approval steps, then compliance checks and even more patience are necessary.

The objective: Less paper, more speed

Imagine you could do away with this paper chase and digitalise your guarantee management as far as possible. Starting with the request for a guarantee, on to the approvals process and distribution, all the way to issuing the associated documents. Paper-based applications which are circulated within the group and later forwarded to the bank by fax, email or post, would then be a thing of the past.

That is all possible with a digitalised process and tailor-made workflow management: Reduce your processing times, forget tedious typing work and have more time for performing analyses. The following case study highlights what this could look like in practice.

The full article can be read on the website of TIPCO treasury.

 

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Cash flow forecasting – more than just safeguarding liquidity

| 4-6-2018 | Gerald Dorrer | TIPCO Treasury & Technology GmbH |

“We don’t need cash flow forecasting” – statements like this are frequently heard at companies with significant cash reserves. They often highlight concerns about major internal expenses as capturing the relevant data can tie up significant resources. Modern cash flow forecasting, however, is about far more than just safeguarding against insolvency. And using up-to-date technologies only minimal efforts are needed to implement a forecast that will provide you with an array of insightful data. 

The easy way to achieve modern forecasting

Many of the data needed for cash flow forecasting already exist in various systems. ERP systems are a particularly efficient data source. For example, this is where you’ll find all of your receivables and payables, including the associated due dates and terms of payment. These data alone will already provide much of what you need. You can also find other influential factors here such as the volumes of regular salary payments. Modern forecasting systems already come complete with an interface to ERPs, making it possible to import these data at the press of a button and take them into account in your forecasts.

Another helpful tool is predictive analytics. Although the statistical methods which predictive analytics are based on have already existed for quite some time, modern technologies now make it possible to use these in practice. Predictive analytics is the key to leveraging historical data to predict future developments with an amazing degree of accuracy. A good example of the advantages offered by this procedure is in the case of a company with seasonal fluctuations in terms of its revenues. If you already have a target figure for revenues in the coming year, then predictive analytics will be able to rapidly and accurately break this down into sales for the individual months. But far more complex scenarios are also conceivable, such as the early identification of trends by means of automated analyses of social media data which can ultimately be translated into cash flows.

Flexibility

But which factors characterise a modern forecasting system?

Besides the criteria mentioned above (a connection to existing data sources and predictive analytics), flexibility is the most important factor – in all respects.

A modern system will allow you to freely define the structure of your forecasting within just a few minutes. Regardless of whether you need standard forecasting of operational and non-operational payments and financial cash flows or whether your company mainly engages in project-related business, you should be able to freely define the structure and the details of your cash flow categorisation. On the other hand, it should also be possible to rely on templates provided by the system in order to start the process using a structure tailored to your specific industry.

At the same time, modern systems also allow you to be flexible in terms of your forecasting horizon. Everything should be possible: from short-term day-by-day forecasting required by banks for companies facing critical cash flow bottlenecks, to long-term forecasting with a horizon of several years. Top-of-the-line systems can even offer you the option of mixing daily, weekly and monthly data in order, for example, to forecast the next seven days on a daily basis, the following twelve weeks on a weekly basis and the remaining nine months on a monthly basis. You can specify how the weekly and monthly values are automatically distributed. This means that you are free to define how previous figures with a low degree of granularity appear at the weekly or daily level after the next data rollover.

Flexibility is also required when it comes to displaying the data. Modern systems offer you several features which enable you to investigate the causes of significant differences between the current and earlier forecasts. For example, switch between the various levels of granularity, whether in terms of the structure or the timeline, or compare forecast and actual figures, or even forecasts from different points in time. Thanks to these flexible display options, expensive analysis tools are no longer necessary; all you need to do is take a quick look at your system.

More than just safeguarding liquidity

The primary purpose of forecasting of course remains ensuring sufficient liquidity. Based on your current cash reserves, the cash flows captured for future time periods are aggregated to provide you with the forecast of cash available at the end of every period. This makes it possible to quickly spot cash bottlenecks.

If your system also offers you the option of managing your credit facilities and their due dates, and integrating these into your cash flow forecasting, then this will enable you to quickly determine when credit lines will need to be drawn on or when they will need to be increased. This is just one of the many aspects which make it clear how significantly you can be supported by a well-designed system.

Systems which also permit you to forecast on a currency-differentiated basis offer considerable additional benefits. This feature will allow you to capture all cash flows in the original transaction currency. The advantage here is that, as soon as you have prepared the forecast, you not only have an overview of the development of liquidity but also of your FX risk exposures. If your system also allows you to manage FX hedge transactions, a comparison of FX payments and these hedge transactions will enable you to determine your unhedged FX exposure in no time at all. The latest systems can even automatically generate hedge proposals based on the unhedged exposure which are then automatically forwarded to your trading system in a workflow-based process once these have been confirmed and approved.

Conclusion

Technological progress has made preparing a cash flow forecast easier today than ever before. Even if no liquidity bottlenecks are currently likely at your company, due to the ongoing reduction in the expenses involved, it nonetheless makes little sense to take unnecessary risks and to pass up on the advantages that comprehensive cash flow forecasting offers.

 

Gerald Dorrer – Manager TIPCO Treasury & Technology GmbH 

 

Content originally posted on Cash & Treasury Management File on 26/3/2018

 

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From dull numbers to smart data: A new era of cash visibility is dawning

| 06-03-2018 | TIPCO | Sponsored content |

Building on information that is now more readily available than ever before, advances in technology help create new insights for corporate treasurers. 

 

 

For the last decade or so, many treasury departments have focused on getting their hands on the data required for establishing daily, or at least weekly, visibility of group-wide cash. Countless projects have revolved around collecting electronic bank balance data – think MT940 and others – and considerable time and resources have been invested in automating and speeding-up data retrieval from TMS, ERP, trading platforms and other source systems.

After all, besides bank balances, data on bank and IC loans and deposits, intercompany clearing accounts and other financial positions needed to be incorporated as well to allow for a realistic assessment of the group’s financial status and available headroom. However, reporting based on these data has remained a painful exercise for most treasury teams as it typically involved exporting information from various, isolated data silos to numerous spreadsheets containing a plethora of handcrafted reports. The result: the number of hours spent on consolidating data, updating reports and correcting errors often reached double-digits, on a weekly basis.

The first step: compiling information

In recent years, the provision of relevant data has become much more automated and common place since the goal of having electronic account statements of all bank accounts world-wide centrally available was high on the priority list of many corporates. Very often, this was part of a larger effort to streamline and centralise cash management and payments. In many cases, a TMS was introduced to replace Excel spreadsheets and the treasury modules of popular ERP suites started to offer more sophisticated features, providing corporates with a preference for all-in-one solutions with a viable alternative to a standalone TMS. A mix of tried-and-tested, file-based connectors and more sophisticated web-services allowed for even speedier data interchange between source systems such as TMS, ERP or trading platforms. And any data not centrally available to the treasury department was collected from subsidiaries – facilitated in the best case by easy-to-use, web-based applications. With this kind of information basis established, dedicated treasury reporting solutions were leveraged to achieve close to 100% visibility of cash. At the same time, the rise in business intelligence software allowed end users to easily retrieve data without having to resort to spreadsheets and accessing reports online or even via smart devices became the norm rather than the exception.

The next step: Turning information into insight

For many corporates, these steps were already a big leap forward. But what next, now that all the integration challenges have been mastered and information is readily available? Of course, the ‘data puddles’ turned ‘data pools’ mentioned above can be used for plain and simple financial status reporting. But, given that it is 2018 and self-driving cars will soon hit the road in California: should that really be it? For us, the answer is a clear ‘no’. Today, treasurers have access to a whole new range of applications which make use of information that is now more readily available than ever, and which leverage recent advances in technology such as artificial intelligence to provide value-added services to treasury depart-ments. While we are very careful when talking about ‘revolutions’ in treasury, the advances we want to highlight below surely are a noteworthy evolution. Until recently, data analysis in treasury was still very much a manual task. This no longer needs to be the case as smart tools greatly reduce the time needed for performing even in-depth data analyses, thus allowing more time to be spent on acting on the results of such analyses. Let us take you on a quick ‘tour d’horizon’ using five examples of how smart applications can take your cash visibility to the next level:

1. Policy checks
In a typical treasury policy, one finds numerous rules and regulations relating to the opening of new bank accounts, the maximum allowed number of these accounts, acceptable account purposes, etc. Why not replace email-based processes for new bank account requests with intelligent workflows that not only ensure an end-to-end audit trail, but which also ensure that new bank accounts are automatically fed into all relevant systems such as ERPs, TMS or reporting tools once finally approved.

2. Compliance controls
Combined with smart request workflows as described above, regular, system-supported compliance checks further enhance group treasury’s grip on what is going on around the group. Whether these checks relate to the number, currency or counterparty of bank accounts or other financial positions, or the timeliness of data on authorised signatories in the system, outliers can easily be identified, and compliance can be swiftly restored.

3. Fraud detection
When electronic account statements are merely used as a means of importing end-of-day balances, much of their potential is lost. Based on smart search patterns, data provided as part of the remittance information can be used for valuable insights: Where in the group do frequent cash-based transactions occur? Banks’ business transaction codes (BTCs) or other related text snippets can point you in the right direction and responsible, local or regional finance staff can be notified automatically, using workflow-based notification processes so the background and soundness of such cash movements can be checked.

4. Performance KPIs
KPIs as a means of systematically measuring treasury performance are high on the agenda of many of the more advanced treasury departments out there. Whether they relate to the efficiency of core treasury processes (think request and approval workflows once again) or to other indicators such as the overall number of bank accounts, the percentage of accounts included in cash pooling arrangements, the share of trapped cash in overall cash – to name only a few basic KPIs: a well-compiled set of such figures that covers not only cash management but other areas as well – presented in the form of a clearly laid out KPI dashboard, finally provides the treasurer with a strategic steering wheel.

5. Bank fee controlling
You wonder what bank fee controlling has to do with cash visibility. The short answer: everything. Regular, system-supported bank fee analysis is not only about penny pinching but equally about developing an in-depth understanding of what is going on further up the process chain. A strikingly high number of fax payments in a country where you wouldn’t expect them? Fees titled ‘Others’ which amount to thousands of euros every month? If nowhere else, then you’ll find this information in the electronic fee statements (e.g. camt.086) provided by your bank. A smart analysis tool allows you to interactively drill down from cruising altitude to the line item level and within minutes you can reach out to either your bank’s customer service, your subsidiary or both to clarify what’s going on.

If you would like to know more and find out how technology can help you go one step beyond cash visibility and ease your daily life as a treasurer, get in touch with us. We are looking forward to helping you unleash your data’s full potential.

TIPCO Treasury & Technology GmbH

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Bank fee monitoring – more than just “penny pinching”

| 06-02-2018 | TIPCO | Sponsored content |

The electronic analysis of bank fees not only cuts costs but also helps to sustainably improve the quality of treasury processes.
Monitoring bank fees is not a task which is particularly popular in treasury departments. The idea of working through stacks of paper in the hope of understanding confusing bank fee nomenclature doesn’t usually generate much enthusiasm. This onerous task is often delegated, or statements are just blindly signed off on by the accounts department. That’s a shame. Why? Because the systematic analysis of bank fees can not only save considerable sums of money but can also lead to real improvements in treasury processes.

Evil intentions are not the only reason behind incorrectly charged items. Banks claim that updates of their fee calculation systems are sometimes responsible for standard fees being charged rather than those which have been specially negotiated with certain clients. Simply on the grounds of human error, there is a need to regularly check whether agreed fees are always taken into account by the software that banks use.

What do you need to do to retain an overview?

First of all, you need a bank which is capable of providing you with electronic statements in either the TWIST BSB or camt.086 formats. The gentle pressure that major corporates have put on their banks in recent years has paid off. Banks are increasingly responding positively to relevant customer requests. We will be happy to provide a list of those banks which can already provide these statements and in which countries.

On the other hand, your systems need to be able to read and process these formats. While you can open the statements relatively easily in Excel, special system support is necessary in order to perform in-depth analyses. Many corporates use web-based and TMS-independent platforms for this which have specially developed to monitor bank fees. Bespoke interfaces guarantee integration into your existing system landscape. A good example of such a system is the treasury information platform TIP, which is already in use at corporates such as Deutsche Post DHL Group or Lufthansa.

How will you benefit from regular checks?

The first benefit comes from checking that agreed fees are actually charged in practice. The press of a button is all it should take to highlight all discrepancies and provide a basis for demanding reimbursement from the bank. But this is just the beginning. Once transparency has been established about the services and fees charged, it doesn’t take long to draw conclusions about suboptimal payment processes. For example, if your analysis frequently highlights expensive “non-STP” or “repair” fees, you would be well advised to take a closer look at your payment processes. Perhaps there is simply a need to update incorrect master data. On the other hand, it might be necessary to brief your personnel on correct payment processes.

A further example: document-based payment methods. If your Canadian subsidiary in-structs a bank by fax to perform 800 transfers a month, this is not only a problem for your internal audit team but generally also extremely expensive. Here is another case relevant in the context of compliance which can be highlighted by bank fee monitoring: Cash withdrawals from company accounts at a bank branch may be above board in certain cases but should certainly be queried.

Another positive side effect of a transparent overview of bank fees is a comparison between different subsidiaries: Do all your subsidiaries in a particular country pay the same fee for the same service, and if not, why not?

Another situation: Imagine that you asked the general manager of your Spanish subsidiary three months ago to close two unnecessary EUR accounts, but the account management fee keep appearing on the statements. Electronic statements can therefore help you to insist on compliance with your cash management policy.

However, this issue is not only suitable as a means of slapping the wrists of banks and in-ternal troublemakers. The systematic processing of bank statements also provides you with exactly the data you need for your next payment service RFP: The relevant products you use and volumes are presented on a silver platter; meaning that you don’t need to painstakingly collect these data from your subsidiaries. Besides the quantitative factors, the analysis of bank fees also provides you with a better impression of the quality of the services provided by your banks. Armed with these data, you are far better prepared for bank negotiations.

What will the future bring?

What might still sound far-fetched today may soon become reality: Work is already ongoing in some pilot projects to directly book fee-based information from electronic account statements in ERP systems. This is based on statements prepared using the ZUGFeRD format, a standard developed by the Forum for Electronic Invoicing Germany (FeRD), which will make it possible to send invoices in a defined PDF format which can then be automatically read and processed.

Parallel to this, the German Association of Corporate Treasurers (vdt) has formed a working group to establish an XML format proposal which meets the minimum requirements necessary for bank fees to be VAT deductible. And, in the near future, electronic statements may also include all of the key elements of banks’ year-end summaries.

Efforts to introduce electronic bank fee statements are also being intensified internationally: The Common Global Implementation (CGI) initiative, investigating the standardisation of payment formats, has set up a working group to further develop camt.086, the ISO standard for cash management statements. Numerous other initiatives in Germany, Austria and France are also regularly bringing banks, corporates and system providers together for meetings. Increasing numbers of medium and large corporates are starting relevant projects and sharing their experiences at fairs such as those of the Association of Financial Profes-sionals (AFP) in Denver and at the Finance Symposium organised by Schwabe, Ley & Greiner. This issue is also being addressed in academia, highlighted by the numerous dis-sertations and theses focussing on how theory and practice should be combined. Last but not least, system providers are increasingly integrating bank fee monitoring into their solutions.

How can you help?

Rising demand from corporates is ensuring that this issue remains firmly at the top of credit institution agendas. While banks of course are keen to pass on the necessary investment costs to their customers, don’t let yourself get caught up in any discussions on this issue. After all, you don’t pay other suppliers to send you electronic invoices that you can understand.

TIPCO Treasury & Technology GmbH

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Decentralised data capture, centralised data analysis: a case study

| 10-7-2017 | Hubert Rappold | TIPCO Treasury Technology GmbH | Sponsored content |

From now on, Faber-Castell will be organising its cash flow forecasting, accounts and derivatives with TIP. Regardless of where in the world, TIP allows the many subsidiaries of the multi-national to forecast and plan without major time inputs. Data capturing is decentralised while data analysis is centralised.

Case study

Groups with international subsidiaries need to regularly request all financial data from their subsidiaries spread around the world. This requires a lot of time and robust review procedures. Our web-based treasury information platform, TIP, allows the decentralised input of these data, irrespective of the various source systems, and their automatic reporting to Group Treasury. On behalf of the well-known family-owned company Faber-Castell, we recently implemented a solution which allows this stationery manufacturer to access and plan its group-wide data, ranging from its financial status and cash flow forecasting to its derivative management. Find out more about the implementation and how Quick Guides helped Faber-Castell subsidiaries to get started with the new system in their case study.

TIPCO Treasury Technology

TIPCO provides treasury reporting and cashflow forecasting solutions for over 120 companies. TIP automatically compiles existing data from various systems (TMS, ERP, etc.) and prepares analyses of these. This avoids the need to capture data manually, which is one of the most common causes of inaccurate data. Huge data volumes can be processed within seconds and reports can be set up and managed flexibly, even if the company’s requirements change. A smart cashflow forecasting module utilises that data and allows modification and simulation of forecasts.

You can read more about their case study by clicking on this link.

If you want to find out more about TIPCO and their services and products please refer to their company profile on treasuryXL.

Hubert Rappold – CEO at TIPCO Treasury & Technology GmbH

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TIPCO & TIS Webinar – Streamlining Your Treasury Processes: Trends in Payments and Reporting

| 16-06-2016 | treasuryXL |

tipcotisDear community members, we would like to bring something to your attention: TIPCO and TIS joined forces to organise a noteworthy webinar on the 7th of July: TIPCO & TIS: Streamlining Your Treasury Processes: Trends in Payments and Reporting.

The treasuryXL team works hard to bring you the most relevant treasury events and courses. Are you organising an event or did you run into an event that’s not on our website yet? Please let us know by using the contact form or simply e-mailing [email protected].

Since we have been in close contact to both TIS and TIPCO for some time now, we know this webinar will be something interesting; they have their own solution that can be complementary for the already existing market. TIS and TIPCO have assured us the webinar focuses on bringing you new insights on your treasury processes. So, we would like to emphasize that it will not be a sales pitch.

Content of the webinar:

You’re involved with treasury topics in your organisation daily. You know how important it is to have a handle on your data. However, do you have the right tools and processes in place in order to keep your activities streamlined while also being able to report on the key information? Are you reaching maximum efficiency and accuracy within your department – or is there a better way forward?

You will learn how to:

  • automate and standardise your payment transactions
  • enhance transparency and control through liquidity and cash flows
  • manage banking relationships and complex banking landscapes more efficiently
  • improve your treasury reporting at the touch of a button
  • reduce complexity and easily link subsidiaries

Speakers:

hubertrappoldHubert Rappold, CEO and Co-founder, TIPCO

 



 

joerg wiemerJörg Wiemer, CSO and Co-founder, TIS



Practical info:

Date: Thursday, 07th July 2016
Time: 15:00 – 15:45 CET
Duration: 45 minutes
Language: English

Follow up

Missed the TIPCO & TIS Webinar? Don’t worry we got you the webinar recording.

Find more treasury related events on our event calendar, we also promote treasury related education on our education&training page. 

Stephanie Derkse

Stephanie Derkse

Community Manager