Tag Archive for: cash management

Enhanced Global Liquidity through Notional Pooling and Payment Netting

| 21-12-2020 | Vincenzo Masile | treasuryXL |

Liquidity management is one of the core roles of treasury and maintaining the right level of liquidity to guard against risks is of key importance. Liquidity needs are affected by many factors both internal and external, some of which lie outside the treasurer control and some of which are extremely subjective and difficult to forecast. Liquidity, after all, is not an exact science

The level of liquidity held varies hugely, even between companies in similar industries and similar market positions, while due to complex account structures a “safety net” of cash holdings may be inaccessible when most needed. Effective liquidity management requires an account structure that facilitates fast decisions and simplifies transfers between the company accounts.

A global cash pool is a balance netting cash concentration solution providing with access to group liquidity through a real-time, cross-border, multi-currency cash pooling structure. The cash pool is topped by an off-balance multi-currency master account, holding the cash pool net balance in the currency of the treasurer choice. One on-balance top account per currency holds the pooled net balance in the respective currency. A global cash pool replaces multiple local cash pools and offers significant advantages to the group liquidity management.

What is Netting?

A process which reduces transfers of funds between subsidiaries or separate companies to one net amount.

What are the benefits of Netting?

  • Consolidates and off-sets payables against receivables between multiple group companies on a global and multicurrency basis
  • Reduces the number of inter-company funds transfers
  • Minimizes costs of associated foreign exchange
  • Avoids the need for group companies to make multiple transfers and execute opposite foreign exchange transactions

The Netting Cycle

Customer:                                                                                                                                                    Netting provider:

day X-4                Company “A”  participants                  Invoices to be paid >                          processing & checking

day X-2               Company “A”  participants                <  Preliminary/Final Results                calculations

day X                   Company “A”  participants                 <  Payments from participants         settlements

Payments to participants >

Why Implement Netting?

  • Less administrative workload
    – Netting center can be viewed as corporate treasury back-office
  • Continuity of operational tasks
    – Funds will be paid/collected with proper/same value date
    – Settlement over existing local bank accounts; no accounts at netting bank are required
  • Increased visibility and control
    – All netting input and output stored in one database
  • Centralization of FX
    – Consolidates FX positions
    – Improves FX spread
    – Ability to include FX hedge transactions
  • Flexibility
    – Settlement can be in any currency required by affiliate
    – Additional run on an ad-hoc basis; quarter end, year end

Global Multi-Currency Notional Cash Pool

Notional Cash Pooling

  • Group companies open bank accounts in their own name in local currency at the pooling center
  • No inter-company loans are created
  • Group companies with credit balances at BMG are deemed bank deposits and group companies with debit balances at BMG are deemed bank overdrafts
  • All account balances – both credit and debit – are treated on a net basis
  • Interest is bank interest
  • Interest rates applied are based on the net position per currency in the cash pool (not traditional bank BID/ASK spreads)
  • Treasury can choose interest margins to create revenues for Finance company/Treasury

Zero Balance Cash Pooling

  • The Finance company (or other group company) opens accounts in their name at pooling center
  •  Group companies can put cash on deposit with the finance company or borrow from the finance company
  •  Inter-company loans are created
  •  Inter-company loans need to be administered
  • Interest is inter-company interest

True Multi-Currency Multi-Entity Notional Pool

  • Enables multiple group companies in numerous geographical regions to retain local accounts at local banks; “overlay”
  • Consolidation is achieved by transferring local balances (both debit and credit) to accounts held by the individual group companies at the pooling center. There is no change of ownership of funds, and no question of intercompany loans
  •  Offset is accomplished without physical concentration/conversion (FX)

Also:

  • One interest rate per currency (no spread between overdrafts and deposits)
  • Permits not only concentration of excess cash, but allows overdrafts within the pool
  • Full offset capabilities (risk and accounting) for both client and bank
  • Operational in multiple time-zones

Notional Cash Pool & Key Tax Points

Bank Pledge versus Cross Guarantee

  • Notional Cash Pool is based on Pledging of Balances to the bank. Normally cash pools are based on Cross Guarantees which is an unlimited joint resulting in liabilities between related group companies

 Interest

  • Interest is classified as bank interest (credit and debit). All Cash Pool balances are cash on deposit or a current account overdraft

Transfer pricing

  • The bank executes the daily investments and borrowings of the group companies and applies arm’s length interest rates. Tax can insert interest margins as needed

Interest withholding tax

  • BMG is domiciled in the Netherlands resulting in no WHT on credit interest paid. In some cases WHT is applicable on interest charged

Thin cap rules

  • The Cash Pool borrowings are deemed loans/overdrafts from the bank. Thin cap rules are sometimes more flexible regarding bank overdrafts

Conclusion

Companies who implement netting or cash pooling significantly boost the efficiency of their cash and FX management. Companies who implement both, effectively create an in-house bank. The final stage in the process of designing a new cash mobilization structure (or reviewing an existing one) is to assess all possible solutions against the group’s original objectives. Treasurers should bear in mind this to ensure an appropriate and cost-effective solution is chosen.

 

Vincenzo Masile

Treasury Expert/Credit Risk Manager

 

Treasury Delta’s corporate treasury RFP platform: How does it work and why collaborate?

| 18-11-2020 | treasuryXL | Treasury Delta | Having a hard time dealing with complex and time-consuming RFP processes?

Read more

KYRIBA Global Summit

| 07-10-2020 | treasuryXL | Kyriba |

We are excited to invite you to the first ever Kyriba Global Summit, a free virtual event bringing together treasury, finance and IT teams from around the world to discuss their successes and the latest innovations in cash management, payments, bank connectivity, FX risk management and working capital management.

Hear successes and stories of transformation from some of the most recognized companies in the world with a globally diverse group of speakers.

REGISTER HERE

About Kyriba

Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, and market data providers. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in New York, Paris, London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other major locations. For more information, visit www.kyriba.com.

Nomentia – the new Nordic powerhouse for global cash management

| 30-09-2020 | treasuryXL | OpusCapita |

OpusCapita and Analyste join forces

Two leading cash management providers have joined forces to form a new company. OpusCapita and Analyste have merged to create Nomentia – a Nordic powerhouse for global cash management.

”This is a natural step in our journey. Combining forces will improve our offering to our customers, increase our capacity, speed up innovation, and enable us to offer solutions to our customers on a global scale”, says Mikko Soirola, the CEO of Nomentia.

The new company is owned by Providence Strategic Growth (‘PSG’), and Verdane – a North European growth equity investor – will own a minority stake alongside the companies’ management teams. The merger was announced on June 29, 2020.

While the name is new, the companies are not. Founded in the mid 1980s, OpusCapita and Analyste have brought cutting edge Nordic Fintech to the world for over 35 years. Nomentia has a strong heritage of innovation and trust with an average customer lifecycle of over 11 years.

“Our passion is to modernize payment automation and cash management processes and provide clients with the best solutions and tools. We will be able to combine best practices from both companies and create an extensive pool of experience from over 2.300 customers, which will allow for much wider best practice sharing”, says Mikko Soirola.

“We are proud of our Nordic heritage and innovation that we have continuously delivered to the cash management community for over 35 years. Our new brand and visual identity are a salute to our roots, while demonstrating that we have the courage and ambition to be different. From this moment, the name Nomentia shall stand for the Nordic powerhouse for global cash management. We combine best-of-breed solutions from both OpusCapita and Analyste in our cash management portfolio and are looking forward to take this to the world”, states Jukka Sallinen, Deputy CEO Nomentia.

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!

Media contacts

Mikko Soirola, CEO Nomentia, [email protected] +358 40 703 0553

Jukka Sallinen, Deputy CEO Nomentia [email protected] +358 40 590 6144

Wiebke Arendt, [email protected], +358 458731636

OpusCapita shares exciting news – A Nordic Powerhouse

| 07-09-2020 | treasuryXL | OpusCapita |

In July OpusCapita and Analyste announced that they entered a transaction. Now the companies are about to launch the new company they form together.

Make sure to sign up here to be the first to know more.

 

About OpusCapita

OpusCapita enables organizations to buy and pay quickly and securely, with a real-time view of their business. OpusCapita customers use their source-to-pay and cash management solutions to connect, transact and grow. OpusCapita processes over 100 million electronic transactions annually on its Business Network.

 

 

Visit OpusCapita

Visit Partner Page

Read Customer Success Stories

Partner Interview Series | A deeper dive with Paul Simpson from Kyriba

01-09-2020 | treasuryXL | Kyriba |

In the upcoming weeks, you will get inspired by the treasuryXL partner interviews. Each interview will be different, the only thing we can recommend: Learn, Discover and Enjoy!

The first interview to start with is Kyriba where we will take a deeper dive into their recent hosted webinar about Mitigating Fraud With a Corporate Payment Hub.

AN INTRODUCTION TO

 

Paul Simpson is Strategic Payments Director at Kyriba who also was one of the presenters during the webinar in July.

We asked him 9 questions and 3 bonus questions. Let’s go!


INTERVIEW

1. Can you tell us about the Corporate Payment Hub and your specific role?

My role is to promote the Kyriba Payment Hub, to make customers and prospects aware that we also have a powerful payment module. Often people think of Kyriba for TMS, but we have far more to offer, for example an anti-fraud solution in addition to payments. As part of my role at Kyriba, I look at the constantly changing payment landscape to inform treasurers and finance teams of these changes, whether that’s regulatory or technological. The Kyriba Payments Hub detangles what I call the “ERP payment spaghetti”, streamlines global bank connectivity and format transformation, whilst providing companies with real-time fraud detection. This can also accelerate ERP cloud migration projects.

2. What is the core issue the Corporate Payment Hub aims to address and how does it differentiate it from the other players in the market?

Essentially a payment hub gives our clients a single, consolidated point of access across bank accounts, giving the ability to set up payments, define different payment types and provide notification of pending approvals. Kyriba provides this visibility by consolidating payment streams from different systems – ERPs, finance, treasury, legal, capital markets and decentralised teams, thus transforming dis-aggregated processes into a single source of record for all outgoing payments, all done with built-in fraud detection. We also, uniquely, support and maintain a “bank” of over 45,000 bank formats in-house via our bank formats team. This allows the payment hub to transform payment data into bank-specific file formats and connects directly with global banks via multiple protocols, including host-to-host, SWIFT and regional networks. Other providers build each bank format for each customer at a high cost and development time. The Kyriba payment hub is designed to work across different ERP solutions, whereas ERP systems will not work across other instances.

3. Can each ERP work with the Corporate Payment Hub also when you work with multiple ERP’s located in different countries?

Absolutely. The Kyriba payment hub is designed to work with multiple ERP systems across different countries.

4. What are the most common fraud scams that businesses are dealing with?

Fraudsters are trying to use the current crisis to their advantage. With people working from home, for example, they may attempt to ask finance to make payment to a new bank account – knowing the sign off process is not as robust as it was when teams were all together in the office.

5. What’s the difference in Fraud Scams before COVID19 and the time we live in now?

We have research that shows the number of fraud scam attempts is up by nearly a 1,000 times since Coronavirus. The finance sign-off process for making payments are defragmented as people are working from home. This is where the Kyriba payment hub can bring standardised workflows, sign-off and approvals together to help eliminate fraud

6. What critical elements of Fraud are often overlooked by businesses?

Businesses fail to use AI and machine learning in addition to rule-based technology and processes to reduce fraud. This is a key component of the Kyriba Payment Hub

7. What has been the best experience of one of your customers working with the Corporate Payment Hub?

We are able to cut the time and cost of a customer migrating their ERP solutions to the cloud, as we can handle all the payment connectivity and formats etc “out the box”, thus saving the company many 100,000s of Euros, and 6 months or more in time, whilst also providing and standardising work flow sign off processes etc.

8. What is, in your perception, the biggest benefit of a working with the Corporate Payment Hub?

True, real-time visibility of all payments, from all systems, in one place with enhanced fraud protection and built in work flow.

9. What is your best fraud prevention advice for businesses?

Prevention is always better than cure! I always preach this. Always use combined workflow and AI / Machine learning technology together – the best of both worlds.

BONUS QUESTIONS

Have you ever experienced a fraud scam yourself? If yes, how did it impact you?

I have never experienced a fraud scam myself, the protection I had in place alerted me to a potential scam and I took action.

How are you defending yourself against payments fraud?

Every payment has to be checked via a rule and AI/Machine Learning process.

How does the future of fraud prevention look like in your perspective?

Fraudsters are getting more sophisticated, with only 6% of Corporates using machine learning/AI, they need to use the latest technology or be left behind and suffer fraud.

About Kyriba

Kyriba is the global leader in cloud treasury and finance solutions, delivering mission-critical capabilities for cash and risk management, payments and working capital solutions.

Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, and market data providers. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in New York, Paris, London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other major locations.

Visit Kyriba

treasuryXL announces collaboration with Refinitiv, one of the world’s largest providers of financial markets data and infrastructure

| 27-8-2020 | treasuryXL | Refinitiv |

VENLO, The Netherlands, August 27, 2020 – treasuryXL, the community platform for everyone who is active in the world of treasury, and Refinitiv, one of the world’s largest providers of financial markets data and infrastructure today announced the signature of a premium partnership.

The collaboration aims at offering a continuous flow of treasury content, making treasury knowledge available. This collaboration includes:

  • collaboration on messaging, content production, and visibility
  • mutual distribution on select items of interest
  • collaboration on larger themes: event promotion, speaking and experts contribution, publications

With this collaboration, treasuryXL and Refinitiv are striving to make sure that treasurers are always up to date with the latest news and events in their field.

According to Kendra Keydeniers, treasuryXL “We are very excited to welcome Refinitiv in our community. Refinitiv is one of the world’s largest providers of financial markets data and infrastructure, serving over 40,000 institutions in over 190 countries. Refinitiv will have a prominent role in the Treasury Topic environment with coverage in corporate finance, risk, cash management, working capital management & treasury software which is a considerable contribution to our ecosystem.”

About treasuryXL

treasuryXL started in 2016 as a community platform for everyone who is active in the world of treasury. Their extensive and highly qualified network consists out of experienced and aspiring treasurers. treasuryXL keeps their network updated with daily news, events and the latest treasury vacancies.

treasuryXL brings the treasury function to a higher level, both for the inner circle: corporate treasurers, bankers & consultants, as well as others that might benefit: CFO’s, business owners, other people from the CFO Team and educators.

treasuryXL offers:

  • professionals the chance to publish their expertise, opinions, success stories, distribute these and stimulate dialogue.
  • a labour market platform by creating an overview of vacancies, events and treasury education.
  • a variety of consultancy services in collaboration with qualified treasurers.
  • a broad network of highly valued partners and experts.

About Refinitiv
Refinitiv is one of the world’s largest providers of financial markets data and infrastructure, serving over 40,000 institutions in over 190 countries. It provides leading data and insights, trading platforms, and open data and technology platforms that connect a thriving global financial markets community driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime.

For more information visit: www.refinitiv.com

Active Liquidity Podcast – How AI Protects Payments During COVID19

| 17-08-2020 | treasuryXL | Kyriba |

Our Partner Kyriba has launched their podcast, in which the Chief Product Officer Thierry Truche shares his view on how AI (Artificial Intelligence) is essential as the third line of defense for finance chiefs, ensuring payments are protected during the COVID 19 pandemic. Even if you are a company that has strong fraud prevention processes in place, remote working conditions require AI to detect abnormal payments activity. Hear why Truche sees AI as a replacement for the collective intelligence that is more present in an office setting in this episode of the Activity Liquidity Podcast!

 

 

About Kyriba

Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, and market data providers. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in New York, Paris, London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other major locations. For more information, visit www.kyriba.com.

 

SOURCE

Webinar | July 16 | Mitigating Fraud With a Corporate Payment Hub

| 22-06-2020 | treasuryXL | Kyriba |

In today’s changing IT environment, we see more corporates exposed to the risk of fraud, due to legacy controls and manual processes. With many companies applying a new ‘working from home’ strategy, the risk of fraud is bigger than ever before.

In today’s changing IT environment, we see more corporates exposed to the risk of fraud, due to legacy controls and manual processes. With many companies applying a new ‘working from home’ strategy, the risk of fraud is bigger than ever before.

During this webinar we will hear:

  • How does a payment hub support you in mitigating fraud?
  • What is rules based fraud detection?
  • Why is machine learning an important part of our fraud detection?
  • How does fraud detection fit in your overall payment processes?

Paul Simpson, Strategic Payments Director at Kyriba, together with Value Engineer, Alroy D’Cruz, will discuss these most important questions and will give you an insight on how Kyriba is supporting over 2,300 of your peers worldwide with our SaaS Payment Fraud solutions.

Presenters:

 

 

 

PAUL SIMPSON

Strategic Payments Director, Kyriba

 

 

 

 

 

ALROY D’CRUZ

Value Engineer, Kyriba

 

 



Submit on the registration page and save your place.

 

About Kyriba

Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, and market data providers. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in New York, Paris, London, Frankfurt, Tokyo, Dubai, Singapore, Shanghai and other major locations. For more information, visit www.kyriba.com.

7 Experts on Activating Liquidity – a Guide to Leveraging Technology to Generate New Growth

| 11-6-2020 | treasuryXL | Kyriba |

Managing liquidity has never been easy, but new technologies are making it easier. With ease comes speed, accuracy and efficiency, enabling treasury to more effectively see, move and protect cash and generate increased business value. However, activating liquidity while navigating volatile markets can be difficult. So how does treasury leverage technology to activate liquidity and generate new growth, and what does it gain by doing so?

‘7 Experts on Activating Liquidity’ is a Mighty Guide, sponsored by leading global cloud treasury and finance solution provider Kyriba.  In this guide the question of how to leverage technology to optimise treasury and finance, extend visibility and controls, and maximise enterprise value is explored by asking seven treasury management experts from different industries the following questions:

  1. How does expanding the scope of treasury to be inclusive of cash, risk, payments and working capital increase enterprise value?
  2. How do you most effectively manage FX risk exposure, and why is it important to do that?
  3. What are the advantages of centralizing and standardizing global payment processes through a single system?
  4. What are the advantages of centralizing the management of free cash flow and liquidity in your organization?
  5. What level of integration is necessary to get a true, real-time view of cash and liquidity, and how would that real-time data enhance decision making and performance?

Their insights are collected in the five chapters of this eBook. In reading them, David Rogelberg, Editor, was struck by how different the challenges are for each of the expert’s business, and how they all benefit from greater visibility into cash, payments, risk and working capital.

CFOs have a tough balancing act – trying to pursue strategic growth initiatives while minding the right level of risk. And recent global events have exacerbated this challenge. The answer to solving this problem lies in Active Liquidity – an approach to treasury and finance that elevates the impact of liquidity to generate new market value, even in volatile markets.

Kyriba is excited to sponsor this eBook, in which seven treasury leaders lend their expertise to the concept of Active Liquidity and the key pieces that it encompasses – optimizing cash, payments and risk to generate business value.  Activating Liquidity puts organizations on a path to new value creation, enabling them to:

  • Expand the abilities of treasury and finance, using liquidity as a lever to build value
  • Extend visibility and controls to see, move, protect and grow cash
  • Transform data into intelligence and drive action to maximize enterprise value

This Mighty Guide aims to provide a holistic view and credible advice by exploring, comparing and contrasting a variety of viewpoints from top experts.  The insights given by these treasury executives will give a deep understanding of the benefits of Active Liquidity and how insight into global cash, liquidity and exposure can help execute treasury strategies more easily and efficiently.

Request and download free e-book:

Kyriba is a proud sponsor of this Mighty Guide.  Kyriba empowers CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation, while also protecting against financial risk. Kyriba’s pioneering Active Liquidity Network connects internal applications for treasury, risk, payments and working capital, with vital external sources such as banks, ERPs, trading platforms, market data providers, and other financial institutions. Based on a secure, highly scalable SaaS platform that leverages artificial and business intelligence on an API-enabled architecture, Kyriba enables thousands of companies worldwide to maximize growth opportunities, protect against loss from fraud and financial risk, and reduce costs through advanced automation. Kyriba is headquartered in San Diego, with offices in The Netherlands, London, Paris, New York, Tokyo, Dubai and other major locations.

For more information, visit www.kyriba.com.