Tag Archive for: corporate treasury

Building a cash flow forecast model

| 5-9-2017 | Lionel Pavey |

 

No company can sort out its funding and investment requirements without having a cash flow forecast. This gives valuable insight into potential bottlenecks where there is a shortage of liquidity that needs to be addressed in order that the company can continue its day-to-day operations whilst optimizing its cash position.

2 methods

There are 2 methods to be a model – indirect and direct.

Indirect uses the balance sheet and, as such, will contain non-cash items like depreciation and bad debts. Direct uses the projected receipts and payments shown at specific moments in time.The indirect method is handy for long term forecasting beyond 1 year as it shows the money required to finance capital intensive investments and projects.

The direct method is essential for short term analysis up to 1 year as it shows the money for operational activities and working capital. As a cash flow forecast is mainly used for the direct needs of a company, it is prudent to use the direct method.

What steps need to be taken to transform a budget into a cash flow forecast via direct method?

  1. Adjust the budget to remove all non-cash items
  2. Analyse historical data to obtain seasonally adjusted cash flows for operational activities
  3. Integrate the standard payment terms for creditors and debtors and adjust the cash date
  4. If there are no clear trends within the month, spread the amount evenly over the month
  5. Where pay dates are hard – wages, taxes etc. input these into those dates
  6. Calculate the operational cash flow
  7. Incorporate expected investments
  8. Incorporate existing financing obligations (principal and interest)
  9. Never forget the BTW (VAT)!
  10. Analyse the forecast for shortfalls or periods of excess liquidity

As this is an exercise that incorporates all departments within a company, it is essential that full support is given by management to the design and implementation of the process. No one person can collect and collate all the data – this requires continuous input by controllers and treasury staff.

How to design the forecast?

  1. Establish clearly defined criteria and processes
  2. Define the role and cooperation required by all parties, whilst highlighting the benefits
  3. Ensure commitment from all parties
  4. 1 data source only – data must be presented in 1 format on agreed dates
  5. Structure – all data is delivered on time to a central point, normally the treasury
  6. Keep it simple – do not over design the model
  7. Give constant feedback to all stakeholders so that they can see how their contributions matter
  8. Question the validity of the data – is it created by a bottom-up approach or has a simple top-down approach been taken without looking at the individual components that make up the forecast
  9. Stress test the data – build simple scenarios (best and worse) whilst making simple assumptions such as debtors extending payment times, fall in sales, increase in demand etc.
  10. Never sit back and think that your task is done. This is a living model that needs to be constantly monitored and adjusted where necessary
  11. Do not punish – many people are reluctant to provide forecasts out of fear that they will be wrong. Use the model to educate and focus stakeholders onto the reality of their cash positions as opposed to their bookkeeping positions. It is all about timing
  12. Remember – if you do not have it, you can not use it. There is nothing more harmful for a company than running out of cash, regardless of what the company accounts are telling you!

If you want to know more about this topic you are welcome to contact me.

Lionel Pavey

 

Lionel Pavey

Cash Management and Treasury Specialist

 

 

 

Introduction of a new initiative: Treasurer Development

| 1-9-2017 | treasuryXL |

Already over a year treasuryXL facilitates information exchange about corporate treasury. Contributions are, amongst others, about the development of the treasurer as a person. Due to the improved economy we notice a rising interest in this topic. Education, competence development and labour market are the most obvious examples. This is why we start the Treasurer Development  initiative.

Treasury education

In treasury education we see a rising interest from universities (also of applied science) which results in young graduates with treasury expertise. Both courses with certifications, like RT, ACT or CTP, are discussed as well as compact, result oriented trainings. Especially quick knowledge about FX and risk is in demand. The number of on-line trainings is quickly rising.

The ambition of many treasurers to have a bigger business impact results in a higher demand for training and coaching. Skills you do not learn in class. Questions like “what communication style works with an average and my CFO” or “how do I convince colleagues in an operating company to change their working methods” deserve a tailor made approach.

The labour market is tilting, the number of vacancies is rising. The way employers and employees find each other has changed over the last decade. Social media have a huge impact. Candidates do not only think about the next step but also about their career as a whole and the place their job has in life.

Treasurer Development Initiative

From this perspective a small group of professionals with relevant expertise came together to start the Treasurer Development Initiative. Questions like “how can we raise the professional level of corporate treasury and increase its impact” and “how can we introduce treasury in places where it has an added value”  will be considered from the perspective of the professional.

In our next blog we will introduce the group and inform you about first plans. If you want to contribute, please let us know.

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Trump’s determination to protect American business

| 14-8-2017 | Rob Beemster |

 

Many negative issues surround the President of the United States.  Approval rating hits new low,  surprise on his erratic conduct seems to grow daily. Trump is a unique politician. He is incomparable to any other western political leader. I want to pinpoint his monetary policy in 2017, by looking at the pattern of the dollar so far this year.

The dollar in 2017

Currency pair             January 2017              August 2017               Relative decrease USD

EUR/USD                    1.05                            1.18                            12.4%

AUD/USD                    0.72                            0.80                            11.1%

GBP/USD                    1.22                            1.32                            8.2%

USD/JPY                      1.18                            1.10                            6.8%

USD/CNY                    6.96                            6.70                            3.7%

Maybe Mr Trump does have a foreign economic policy.

He sees the results of Chinese manipulation and soft American response as an unfair trade relationship. The President of the US must do something about these unbalances. At least, this is how Trump judges.

Let’s take into account this Potus is a streetfighter. Long bilateral meetings with the Chinese are not options for Trump. Fast and furious, that it is: Bring the dollar down!!
And this is going on for half a year now. It is going the Trump way. Tough (but efficient)!

How to see the future value of the dollar?

The current outlook for the dollar against its main trading relations is related to some issues:

–          Process of QE by ECB, and  Euro interest rates

–          North Korea

–          China’s position in this geopolitical stress

–          Economic conditions of the US

–          Economic conditions of the main trading partners of the US

These are very important to determine the future value of the dollar. But this is the holistic view, we are all used to. Let’s be flexible and take a different stance. Just conclude as Trump will do. Be his alter ego.Then the most important issues are:

–          Pattern of the Euro against the dollar and the bilateral trade balance between US and Germany

–          China’s reaction to a lower dollar

–          US trade balance

–          US corporates repatriation of overseas cash

–          US investments to produce within America

–          FDI (Foreign Direct Investment) in America

This is a totally different scope. If we want to understand Trump, then we have to use his view on the international arena. The above mentioned bullet points are crucial. All can easily be measured, Trump loves that. I would like to go through these points to be able to clarify the possible outcome of the dollar for the coming time.

Pattern of the Euro against the dollar and the bilateral trade balance between US and Germany

The more than 12% revaluation will have a serious impact on the trade balance between US and Germany. When the correction emerges, Trump might temper his view on Germany. When we notice correction in the trade data, the dollar has gone far enough…

China’s reaction to a lower dollar

So far the yuan has gained some territory but not as much as other major currencies rose against the dollar. How will PBOC and the Chinese Government react on Trump’s wishes to correct the trade balance by a devaluation of the dollar against the yuan? If they take action on Trump’s stated requirements, whatever this may be, then pressure may diminish.

US trade balance

For many years the US  faces a deficit on its trade balance. The more than $500 billion yearly shortage is a notable pain point. If a remarkable achievement can be noticed on short term, a more relaxed dollar attitude may be expected.

US corporates repatriation of overseas cash

In history, attempts have been organised by US governments to return overseas cash of US corporations. During President Bush jr Presidency, corporations did repatriate cash. When Trump does decrease the corporate tax tariff to  15% and he rewards the US corps to transfer their money back to the US without any other penalty payments, a large repatriation may get going. Many of these funds will until now be held in local currencies, so a switch to the dollar may occur.

US corps return back to America

Trump has ordered US companies to produce in the US instead of overseas. If he becomes successful by bringing factories back to the US, the trade balance will shift, employment will improve. Also when large repatriation is done, these funds can be invested in local factories.

FDI in America

Many non-US corporations are scared by the threat of the US government that regulations like import tariffs and other taxes may be charged on imports. It will damage the advantage corporations have experienced last couple of years due to the high dollar. If special import tariffs are installed, investments may be done in the US to avoid these special expenditures. Onshore producing on American soil will become an alternative.

How to manage this?

Foreign currency management has always been a hard part of the international business. Currency moves are unpredictable. But since Trump, one has to be aware of non-economic issues as well. Note that all the above mentioned issues can have effect on the value of the dollar. Professional guidance of your flows is becoming more and more important. Barcelona valuta experts helps you to install a decent strategy to counter unpredicted events. We guide you in protecting the cash flow.

 

Rob Beemster

Owner of Barcelona valuta experts BV

Business intelligence for cash flows & cash positions

| 10-8-2017 | Treasury Intelligence Solutions GmbH (TIS)  | Sponsored content |

How do strategic professionals decide on the best path to success for their company? The key for strategic finance professionals and the best path to success lies in transparency and real-time reporting across company-wide cash flow and liquidity levels, bank transactions, customer and supplier relations and working capital.

When cash flow visibility is the lifeblood of your company, you want full control and knowledge. Direct access to insights on profitability and potential business risks allow you to make better decisions based on solid business intelligence that is accessible anytime and anywhere. Companies now can experience the power of the Business Discovery Manager – a business intelligence module within the TIS cloud platform. Supplier, salary and treasury payments can be easily analysed along with cash flows, liquidity and working capital via easy-to-use dashboards and reports. The tool, enhanced through state-of-the-art BI technology, enables users to access all strategic insights in a single, flexible, web-based and multi-bank, multi-ERP capable platform, available 24 hours a day from anywhere in the world.

Do you want to find out more about this interesting topic?
Do you want to discover the benefits and functions of the Business Discovery Manager in detail?

 

Treasury Intelligence Solutions (TIS)

You can request the TIS Factsheet via the red button.

 

Payment Processing in 2017: FX-MM’s survey and the results

| 4-8-2017 | treasuryXL | FX-MM |

For almost 25 years, FX-MM  publishes about the issues that bankers, corporate treasurers, fund managers, traders, brokers and technology vendors face in the international financial markets. With a focus on treasury, trading and technology, FX-MM serves all of these sectors effectively with their magazine on a monthly basis. Earlier this year they asked their community to take part in their payments processing survey, which they had conducted together with Accuity. 215 senior professionals involved in payments processing from the banking and corporate sector, ranging from the largest multinationals to SMEs, responded.
FX-MM now published a summary of the results online, which we summarize for you.

According to FX-MM’s editor Peter Graham the survey shows the ‘critical importance of payments data accuracy for banks and corporates as they seek to grow their businesses and increase their presence across the world.’

FX-MM made a difference between financial institutions and corporations in their survey. To be categorised in the corporate category, the respondent must work for a non-banking organisation that makes a substantial amount of payments through their daily operations. Typically this includes a range of payroll, supplier, and partner transactions and was referred to as ‘corporates’.

95 top-level corporate respondents from a wide range of industries took part in the survey, with the majority either being treasurers or chief financial officers.

The 120 respondents from the banking sector represented individuals working in all areas of payments processing, from corporate banking, payment operations, and electronic payments, to remittances, settlements and operations. Much like the corporate respondents, the banking respondents represented a wide range of organisations, .

Global reach

Geographically, respondents to the survey were mainly based in Europe and North America. 25% of bank respondents, and 20% of corporate respondents, however, were based outside these mature markets and featured representatives from all regions across the globe.

The majority of banks – 39% – are active in at least 15 regions, and at least 20% serve more than 50 geographic markets. Since only 21% of the banks only process payments domestically, these results highlight the need for accurate payments data across a range of regions. The survey highlights the frequency in which banks today are operating in emerging markets. Indeed, 61% of banks said they often or always route payments through Eastern Europe, 56% through Asia Pacific, 37% through Africa and 35% through Central and South America.

The need for global reach, and the increasing internationalisation of today’s business world, is also reflected in the corporate world. While just 9% of corporate respondents to the survey only send or receive payments domestically, 72% send or receive payments to up to 50 countries.The rest % send payments to more than 50 countries.

It seams that corporates are even more likely to expand their operations internationally than banks, with 64% saying they intend to enter new geographic markets. That implies that a wide scope of payments data is critical as corporates plan for the business needs of the future.

Why does payments data accuracy matter more in today’s market landscape?

Sarkis Akmakjian, Senior Director, Product Management at Accuity, explains: 

‘Evolving business strategies combined with the demand to send payments into emerging markets drives the need for accurate payments that go through every time and in any location. Yet, underpinning each successful transaction is critical financial and routing data. It is not surprising, then, that many financial institutions and multi-national organisations have become more concerned with ensuring this critical information is kept up to date.’

For multi-national corporations, accurate payments data is becoming a key factor in achieving strategic objectives. As the survey highlights, a growing number of global corporations (64%) are expanding their supply chain, customer base and workforce into new markets. However, this cannot be fully achieved if payments cannot be processed with certainty into those countries.

Many respondents (61%) acknowledge that their business could take advantage of new opportunities if it was less of a challenge to process payments. Therefore, they are most helped when payments data is delivered through tools that enable efficient processing.

For financial institutions, accurate routing data drives metrics like straight-through-processing (STP) rates and client satisfaction. In fact it takes fewer delayed payments which damage relationships with clients in a  financial market that is growing more competitive.

For both financial institutions and global businesses, the ability to overcome global payments challenges grows more important. Both types of businesses are looking to the accuracy of their bank and routing data to meet the pressure for accurate payments.

Mission critical for corporates

Significant consequences for corporates arose from not having complete and accurate payments data for their suppliers and vendors. 58% said it led to too much time spent on manual research to correct data errors, while 31% said it led to a lack of trust and posed a reputation risk with vendors.

The survey revealed that there are clear challenges for corporates as they onboard and maintain payments data for their suppliers and vendors. The corporates indicate that problems arose when vendors did not keep them up to date when their payments data changed, or when vendors did not supply all the information they needed. Corporates also stated that their onboarding process was too arduous and that they did not catch errors in vendor data.

Despite these challenges, the importance that corporates attach to payments processing should not be underestimated. 82% of respondents said the ability to process payments accurately had a direct effect on their organisation’s current success and future growth, while 62% said their organisation could take advantage of more new business opportunities if processing payments were less challenging.

The survey revealed the biggest challenges corporates face in keeping bank and payments up to date, namely  manual entry of data that led to errors in their master database and ensuring that payments met complex country-by-country requirements and language requirements.

Bank STP concerns

For banks, 57% said their straight-through-processing (STP) rate for payments was less than 95%. Clearly, this is a cause for concern. The most common cause of payment failure or delay at banks was incorrect or missing beneficiary details, missing or incorrect clearing system details or missing or incorrect account numbers.

The survey also revealed bank priorities for payment processing in 2017. . More than half of the respondents said reducing cost, time and effort was a priority. 42 % cited the need to minimise the risk and exposure of failed payments. A larger group mentioned the automating of data and workflow to save time. 33% of the banks in the survey wanted to protect organisational reputation and existing customer relationships.

It became obvious that banks are feeling the pressure as far as payments processing is concerned.

Without doubt payments are a vital instrument to keep the global economy running. Banks and corporates face challenges. Inaccurate data is clearly an obstacle to increase straight-through-processing and to realise the full benefits of payments automation. Overcoming these inaccurate data issues will reduce costs for banks and corporates and also place them in a better position to take advantage of business opportunities as they expand into the global markets.
(Source: FX-MM)

You can read the complete article about the survey results on FX-MM by following this link.

Annette Gillhart – Community manager treasuryXL

 

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Why Is Bank Independency Important?

|12-7-2017 | Mark van de Griendt | PowertoPay/Unified Post | Sponsored content |

As financial technologies develop, bank independency is something more and more companies adopt. Bank independency not only means that financial streams are dealt with online and require less manual interventions (straight through processing). Mainly not having to rely on the services provided by the bank where the account is held is also an important one when talking about bank independency. A couple of things mentioned below emphasise the importance of being, or becoming, bank independent.

The changing landscape

Since the economic crisis, the banking landscape has become a more dynamic environment. Besides banks going bankrupt we have also seen banks that have withdrawn themselves in certain geographical or business areas. This gave CFO’s in the corporate sector headaches for having to find another bank and to ‘move’ its business. A good example of a (sudden) change of the financial landscape is the Brexit. Not knowing what the Brexit will bring in this perspective, one thing we do know is that the changing banking landscape is here to stay.

Where using bank-independent tools, products or instruments doesn’t solve the problem of finding another bank, it does take away having to start up a time-consuming project changing the applications used in the various financial processes. Bank independency will become more and more common as the banking landscape continues to change.

Formats & Interfaces

Another good reason to use bank independent solutions is not to find yourself in a so called lock-in situation when looking at file-formats and interfaces. Where local formats or proprietary interfaces may have their benefits, formats and interfaces will be subject to change or even may be replaced by the bank offering the service. Recently a bank had decided to phase out a proprietary reporting format. Although this was done with an alternative reporting format and customers had a reasonable period to migrate, many of them were confronted with major changes in their business applications from which many of them being legacy systems.

Again in this case using a bank independent solution will not prevent you from change but a good bank independent solution or tool will offer the flexibility to deal with this type of change outside the corporate IT domain. Still a project but one with less impact on the organisation. When using fully bank independent instruments (for example MT101) the number of changes are limited to a bare minimum and in case of compliance will always be dealt with by the vendor as part of its service.

Cost Savings

Last but not least a bank independent will save costs. Of course there is an investment consideration with regards to a bank independent solution but when looking at the business case the benefits of not having to manage changes due to compliancy or technological developments will in most cases create a break-even point somewhere in year 2.

Recent customer case-studies even showed a significant decrease in costs in year 1 simply by not having to change its output from their applications creating payment instructions when expanding their business to other regions using new local banks. By itself not a bad investment, even when leaving the non-qualified benefits of bank independency aside.

Mark van de Griendt – Cash Management Expert at PowertoPay

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Please also read: 7 reasons why you should do e-invoicing too.

 

How long is your money tied up in stock?

| 7-7-2017 | François de Witte |

You might visit this site, being a treasury professional with years of experience in the field. However you could also be a student or a businessman wanting to know more details on the subject, or a reader in general, eager to learn something new. The ‘Treasury for non-treasurers’ series is for readers who want to understand what treasury is all about. Our expert François de Witte explains the cash conversion cycle and working capital managment.

Background

One of the main tasks of the treasurer is to ensure that the company has the required funds to operate. The treasurer will usually contact the banks for this funding. However, he can also finance the activities of the company by working on cash conversion cycle and the working capital management.

Cash Conversion Cycle

The cash conversion cycle (CCC) is the length of time required for a company to convert cash invested in its operations to cash collected as a result of its operations. A company’s operating cycle is the time it takes from the moment the company pays the invoices to its suppliers until cash is collected from product sales. In other words, it is the difference between when you pay for things and when you get paid.  Here is a simplified example:

When you build an equipment, you need to purchase parts. Let’s assume that you pay them 25  days after the receipt of goods and of the invoice. 10 days following on the invoice for the parts, the equipment is ready to be sold.  It takes another 20 days to sell the equipment to a customer. Let’s assume that the clients pay on average after 30 days. In this case, the cash conversion cycle is 35 days.  Hence, the business needs to have enough “working capital” to fund this transaction until it gets paid.

The following drawing illustrates the cash conversion cycle:

 

The real challenge for a company is to shorten cash conversion cycle, so as to free up cash, which can be reinvested in business or to reduce debt and interest.

If a company wishes to reduce its cash conversion cycle, and hence its working capital requirement, it can work on the following parameters:

  • Order to cash cycle: this is the time it takes from the moment of the receipt of a sales order, until the moment of the effective payment of the order.
  • Purchase to pay cycle: this is the time it takes from the moment that you issue a purchase order, until the effective payment of the order
  • Inventory management: aiming at reducing as much as possible the inventory levels

You can reduce your Order to Cash Cycle by e.g. :

  • Reducing time between delivery of goods and services, and the invoicing.
  • Optimizing the collection processes, by managing the payment delays and ensuring an active monitoring of overdue invoices
  • Using the right Payment instruments, e.g. by replacing cheques by direct debits
  • Automation of the reconciliation

You can optimize your Purchase to Pay cycle by e.g.:

  • Reducing manual and paper-based processes, duplication of data entries, reconciliation and matching processes
  • Automating the processes by moving to digital documents through OCR or other techniques
  • Aligning of the supplier terms and early payment discounts.

Working Capital Management Metrics

If you wish to monitor your performance in this area, it is important to have the right metrics. The most use measurement instruments for the working capital management are the following :

Days Sales Outstanding (DSO) :

This is the average number of days it takes for a company to collects its invoices. It is computed by dividing the commercial account receivables by the annual sales and multiplying this number with 365.

Example: A company with EUR 100 million turnover has end 2016 outstanding accounts receivable of EUR 15 million.

DSO = (EUR 15 million / EUR 100 million) * 365 =  54,75 days

The challenge for a company is to try to reduce the DSO as much as possible, hence shortening the cash conversion cycle. This can be done by reducing the payment terms and actively managing the overdue account receivable (credit control).

The DSO can vary from sector to sector, but as  rule of thumb, when this figure exceeds 60 days, this is an alert that there is an improvement potential.

 Days Inventory outstanding (DIO):

This is the average number of days of inventory a company has. I suggest to compute this by dividing the inventory  by the annual sales and multiplying this number with 365.

Example: a company with 100 million turnover has end-2016 EUR 12 million in inventory.

DIO = (EUR 12 million / EUR 100 million) * 365 = 43,8 days

Here also, the aim is to keep the inventory very low. This is not always possible, because for some sectors, there can be a lengthy production process. In addition, the company needs to ensure that it has in its shops the most used products, in order to avoid losing clients. However by putting an place a good production planning and inventory management, the inventory levels  can be further decreased.

 Days Purchase Outstanding (DPO):

This is the average number of days it takes for a company to pay its suppliers. It is computed by dividing the commercial account payables by the annual costs of purchases (goods and  external services) and multiplying this number with 365.

A company with EUR 100 million turnover, EUR 50 million of external purchases has end-2016 EUR 8 million in accounts payable.

DPO = (EUR 8 million / EUR 50 million) * 365 = 58,4 days

Traditionally, it has been recommended to try to increase the DPO much as possible, hence shortening the cash conversion cycle. This can be done by e.g. increasing the payment terms. However, when a company is cash rich or has an easy access to credits, it can be beneficial to decrease the payment terms by negotiating discounts.

The DPO will also vary from sector to sector.

Length of the Cash Conversion Cycle (CCC):  

This can be computed as follows:

CCC = Days Inventory Outstanding + Days Sales Outstanding – Days Payables Outstanding.

Example:

  • Average receivables collection period = 54 days
  • Inventory conversion period = 43  days
  • Average payable deferral period = 50 days
  • CCC = 54 days + 43 days – 50 days = 47 days

Cash Conversion Cycle (CCC) in absolute amount:

I recommend to also look at the overall figure of the CCC:

CCC in absolute amount  = Accounts payable + Inventory – Accounts Payable

Example :

  • Accounts Receivable = EUR 15 million
  • Inventory = EUR 12 million
  • Accounts Payable = EUR 8 million
  • CCC in absolute amount = EUR (15 MM + 12 MM – 8 MM) = EUR 19 million

Why active working capital management is important

Working capital management is a cheap source of financing, because, except in the case of early payment discounts, there is no financing cost.

The following example illustrates the gains a company can generate by improving its cash conversion cycle.

  • Turnover : EUR 100 million
  • Accounts receivable: EUR 15 million or 54,75 days
  • Inventory : EUR 10 million or 43,8 days
  • Accounts Payable : EUR 8 million or 58,4 days
  • Average financing cost : 3 %

By reducing the DSO from 54,75 to 45 days, and the inventory from 43,8 to 40 days, the company can reduce its financing needs as follows:

  • Accounts receivables: from EUR 15 million to 12,33 million (or EUR 2,65 million)
  • Inventory: from EUR 10 million to 10,96 million (or EUR 1,04 million)
  • Reduction of the CCC: from 40,15 days to 26,6 days
  • Reduction in financing needs: EUR 2,65 million + 1,04 million = EUR 3,69 million
  • Financing cost savings: EUR 3,69 million * 3% = EUR 110.700

Hence, when making up your financial plan, make to also focus on optimizing your cash conversion cycle, as this enables to realize easy gains. In reality this is not always easy, but it is worth the effort.

François de Witte – Founder & Senior Consultant at FDW Consult

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7 reasons why you should do e-invoicing too

| 30-6-2017 | Mark van de Griendt | PowertoPay – UnifiedPost – Sponsored content |

E-invoicing is more than just a PDF that you send via e-mail. It’s a fully-automated process that enables receivers to get the invoice directly into their financial system. In this blog our expert Mark van de Griendt van Power toPay/Unified Post has summed up some of the key benefits for senders and receivers of electronic invoices.

Key benefits

1. Shorter payment periods: Since with e-invoicing invoices are being processed faster, they can be paid sooner. E-invoices are directly sent to the financial system, which make the chance that they end up in the wrong hands almost impossible.

2. Lower costs, fewer actions: Saving money on things as paper, ink and post stamps. Sending a paper invoice is 57% more expensive than e-invoicing and receiving a paper invoice is even more than 60% more expensive than receiving an e-invoice (Billentis).

3. E-invoice is delivered directly with confirmation of reception: Since you can track whether the invoice is delivered or not, it’s easier to have a clear insight of the status of your invoices sent. Now that you know for sure that the receiver actually received their invoice, you can confidentially do a follow up (if not automated).

 

 

4. Contributing to durability: Of course less paper is good for the environment. An e-invoice solution will remove at least 80% of paper from most accounting departments. Replacing unnecessary waste of paper by electronic invoicing, will save a lot of paper which means more trees.

5. No more need of manual input or scan recognition software
The the e-invoices are automatically loaded into financial system of the receiver. That is why manual input is not necessary anymore since all the data of the invoice are correctly loaded into the position where it needs to end up at. Scan recognition software is basically built in e-invoicing, since data is automatically recognized.

6. Safety – less chance on “ghost invoice”: A ghost invoice means that the invoice is fake. It’s an invoice for services or products which have never been delivered. The e-invoices are automatically checked on authenticity.

7. Clear insight into business processes: The financial department is very important to a business When it’s a mess, it’s stressful for the employees but it’s also bad for the prospects of the company. E-invoicing takes this mess away, since invoices cannot go wandering around ending up at the wrong persons. A clear and solid insight into the status of all invoices is a clear and solid insight into a company’s business processes.

Mark van de Griendt – Cash Management Expert at PowertoPay

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More articles from this author:

How to combat payment fraud

PSD2 is coming soon: Some information about PSD2 summed up.

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Een parttime CFO – parallellen met de Flex Treasurer

| 29-6-2017 | CFO netwerk | treasuryXL |

CFO netwerk biedt (parttime) CFO diensten aan ondernemingen, waarvan aard en omvang van de activiteiten de fulltime inzet van een CFO niet rechtvaardigen. Wat dat betreft herkennen wij parallellen met onze Flex Treasurer, die wij op treasuryXL aanbieden aan ondernemingen, die wel treasury exposure hebben, maar geen ruimte om een fulltime treasurer of cash manager in dienst te nemen. We waren in gesprek met Jeffrey Janssen van CFO netwerk en hebben de parallellen voor u uitgewerkt.

CFO op maat

Wat is de toegevoegde waarde van een CFO voor een onderneming?

Veel jonge en kleine bedrijven hebben vaak niet de financiële mogelijkheden om een ervaren CFO in dienst te nemen. In deze situatie is wellicht een parttime CFO een goede oplossing. Een ervaren professional met commitment die u voor een beperkt aantal uren inhuurt, maar toch de vinger aan de pols houdt en indien nodig 24/7 voor u beschikbaar is.

Maar waar u als ondernemer ook bent in de levenscyclus van uw bedrijf, het goed functioneren van uw financiële afdeling is van groot belang en zij hoort u tijdig te informeren over strategische, financiële vragen die van belang zijn voor het voortbestaan van uw bedrijf. Daarbij gaat het niet alleen over cijfers, maar ook over een sterke CFO, die u uitdaagt en als business partner optreedt bij de bepaling van de strategie en volgens een strakke CFO-agenda de groei van uw bedrijf ondersteunt.

Uw bedrijf groeit

U werkt hard en investeert. Het bedrijf groeit en alles gaat eigenlijk beter dan verwacht. Of toch niet? Er ontstaan groeistuipen en er worden veel ad-hoc beslissingen genomen om de voortrazende trein op het rechte spoor te houden. In deze fase kunnen grote fouten worden gemaakt die de continuïteit in gevaar brengen. De belangrijkste hiervan is dat het strategische plan niet wordt gevolgd en dat dit plan niet regelmatig wordt geëvalueerd en aangepast.  Aspecten die in deze fase van groot belang zijn:

  • Het hebben van juiste en tijdige stuurinformatie (ook wel KPI’s genoemd)
  • De kwaliteit van de organisatie (juiste mensen, juiste skills) De administratieve systemen en procedures. Zijn deze nog adequaat en kunnen ze de groei aan?
  • Is er voldoende cashflow aanwezig om de continuïteit te waarborgen?

Succesvol en nu verder…

Alle bedrijfsprocessen zijn goed ingericht – het gaat heel goed met uw bedrijf. De resultaten zijn uitstekend, maar blijft dat zo? Indien u niet bezig bent met nieuwe innovaties, oog hebt voor de veranderingen in de markt loopt u het risico dat uw groei gaat stagneren en te laat uw organisatie hierop aanpast. Ook dan moet U keuzes maken die ingrijpend zijn en een weerslag hebben op mensen en systemen. In deze fase is het cruciaal dat u de continuïteit van het bedrijf centraal stelt en het bedrijf robuust maakt voor de toekomst.  Ook hier is het de taak van de CFO om dit spanningsveld te bewaken en u tijdig te helpen in uw besluitvorming.

Ups and downs

Iedere onderneming komt ze vroeger of later tegen. Door te weinig innovatie streven uw concurrenten u voorbij. De resultaten lopen opeens terug. Uw bankiers komen vaker langs en aandeelhouders zijn niet tevreden en eisen veranderingen. U bent het grootste deel van uw tijd kwijt aan het managen van uw liquiditeit en het sussen van aandeelhouders en personeel. Zorg dat u in deze fase de juiste mensen binnenhaalt om het tij te keren, dan wel te zorgen dat keuzes worden gemaakt. Dit kan van levensbelang zijn om een faillissement te voorkomen.

Wat kan een CFO betekenen?

Een krachtige CFO is een sparringpartner die u als ondernemer in iedere bedrijfsfase ontzorgt en uw financiële continuïteit bewaakt. Hij of zij is onder meer verantwoordelijk voor de financiële systemen en processen, de stuurinformatie en de contacten met financiers en accountant. Maar bovenal moet hij als financiële business partner onderdeel zijn van uw team en mede sturing geven aan de strategische agenda van uw onderneming. Een onderneming kan niet functioneren zonder een goede CFO in het hart van uw organisatie.

Een Flex Treasurer als ondersteuning voor de CFO

We merken dagelijks dat treasury iets is waar CFO’s en Controllers er vaak te weinig tijd voor hebben en/of niet altijd de noodzakelijke kennis. HR managers en directeuren bemoeien zich er liever niet mee.

Ook hier hetzelfde beeld: de meeste organisaties zijn niet groot genoeg om een treasury-afdeling te huisvesten maar dat betekent niet dat deze organisaties geen kosten kunnen besparen of dat er geen mogelijkheden zijn voor bijvoorbeeld funding. Om de treasury van uw organisatie onder controle te hebben is het niet altijd nodig om er een complete afdeling van te maken.

Een ervaren hands-on treasurer kan een eerste check doen binnen de organisatie om te bepalen of het de moeite waard is om te investeren in treasury. Door optimalisatie van interne processen, het beter beheren van banken en bankkosten of het opnieuw organiseren van FX processen kan vaak een substantiële besparing worden gerealiseerd.

Cash & liquidity management ondersteuning

Heeft u een goed overzicht van uw liquiditeitspositie? Is er geen versnipperde cash- en kredietbenutting? Bent u onlangs geconfronteerd met liquiditeitsproblemen t.g.v. onverwachte uitgaven? Wordt u regelmatig geconfronteerd met manuele verwerking van betalingen? Bent u recent geconfronteerd met fraudegevallen? Is het aantrekken van de financiering een issue?

Een treasury expert kan u helpen in het vinden van de juiste antwoorden op deze vragen. Een Flex Treasurer kan ondersteuning bieden op tijdelijke basis, onder meer voor de volgende aspecten:

Begeleiding opvolging liquiditeitspositie groep en uittekenen processen in dit verband
Assessment van het cash forecasting proces en voorstellen tot optimalisatie
Optimalisatie betalingsprocessen (incluis fraudepreventie)
Advies selectie bankpartners
Nazicht van de bankvoorwaarden
Bepalen van de optimale financieringsstrategie
Automatisatievoorstellen en begeleiding van de implementatie

Optimalisatie werkkapitaalverkeer

Kampt uw bedrijf met een DSO (gemiddelde betalingstermijn klanten) die veel hoger is dan het sectorgemiddelde? Heeft u een duidelijk afgelijnd acceptatieproces en een politiek voor de betaaltermijnen? Is je facturatieproces optimaal? Heeft u een afgelijnde politiek voor de selectie en de betalingstermijnen aan uw leveranciers? Heeft u regelmatig incassoproblemen? Kampt u met wanbetalingen en afschrijvingen op uw klantenportefeuille? Ondervindt u regelmatig reconciliatieproblemen bij binnenkomende en uitgaande betalingen?

Dan kan een Flex Treasurer, die treasury & working capital management expert is, u  helpen bij het vinden van de juiste antwoorden op deze vragen en het optimaliseren van uw werkkapitaalbeheer.

FX en IR risico analyse

Heeft u een goed zicht op de risico’s die je bedrijf oploopt (o.m. valuta en renterisico) en op de impact hiervan op uw bedrijf? Heeft u een politiek in  verband met de risicoafdekking? Heeft u een zicht op de mogelijkheden om ze in te dekken? Koerswijzigingen in valuta en rente kunnen zeer vluchtig zijn en leiden tot onnodige extra kosten. Als u zich wilt concentreren op uw ‘core business’, zonder u zorgen te hoeven maken over bv. de EUR/USD wisselkoers of de Europese rente dan is het inhuren van een Flex Treasurer de ideale uitkomst. Hij kan de organisatie helpen eenvoudig en effectief de risico’s af te dekken, alsmede te onderhandelen over betere spreidingen en lagere kosten bij uw bank.

Aangeboden diensten

Met  de verschillende CFO diensten van CFO Netwerk krijgt u het beste van beide werelden: de expertise van een ervaren CFO en op maat gemaakte uitbestede CFO diensten — tegen een prijs die u zich kunt veroorloven. De CFO-diensten zijn schaalbaar in de tijd. Dit betekent dat het niveau van ondersteuning geleverd wordt, dat u nodig hebt en wanneer u het nodig hebt.

Op treasuryXL bieden wij een Treasury Quick Scan aan, die beoogt de treasury-pijnpunten in kaart te brengen en de aanbevelingen om deze te verhelpen, inclusief de business case. Op basis daarvan kunt u bekijken of er voor verdere ondersteuning een treasury-expert voor uw organisatie zinvol is.
Daarnaast biedt treasuryXL ook treasury coaches aan. Treasurers werken vaak alleen of in een klein team en hebben ondersteuning nodig van andere (meer senior) treasury professionals. Vaak is deze ondersteuning niet aanwezig binnen het eigen team. In ons netwerk zitten een aantal senior professionals die deze ondersteuning op regelmatige basis kunnen bieden. Zij kunnen op regelmatige basis of incidenteel ingepland worden.

Mogelijke samenwerking

Omdat er duidelijk parallellen zijn tussen de diensten van CFO netwerk en treasuryXL en de diensten elkaar goed aanvullen, onderzoeken wij op dit moment of wij wellicht kunnen samenwerken. Het doel is om organisaties, die een financiële professional – parttime CFO of Flex Treasurer  – nodig hebben, als klant nog beter van dienst te zijn.

 

Bank Account Management – A Treasurer’s Guide

| 22-6-2017 | Treasury Intelligence Solutions GmbH (TIS) | Sponsored content |

Bank Account Managment knows many issues and the Guide of TIS reviews them,  lists best practices and various suggestions to improve the process at your organization.

Risk and liquidity management are top of mind for treasurers in today’s business climate highlighting the importance of bank accounts. They are necessary to pay, receive and store money and also to protect resources and facilitate treasury management. Companies must have at least one bank account, some have hundreds and a few require thousands of bank accounts to conduct their business. Bank accounts are also the means by which companies are connected to other businesses, people and the banks where the accounts are held. This makes the business of bank account management not only an important task but in the current hyper-connected environment of cybercrime, terrorism, fraud and tax evasion a mission critical function. Failure to properly manage bank accounts has the potential to cause material disruption or business failure for the account holders.

If you want to read more about this subject please click on in this whitepaper.

Treasury Intelligence Solutions GmbH (TIS)

Since 2010, Treasury Intelligence Solutions GmbH (TIS) has been combining their treasury management experience and know-how with their cloud computing and virtualisation expertise. The TIS solution is the result of these efforts: comprehensive, highly scalable and extremely secure SaaS solution to process, analyse and document all treasury management processes.