Tag Archive for: payment

How to explain what treasury is to family and friends?

| 09-08-2019 | by Pieter de Kiewit |

Your mortgage, credit card, holiday money and current account have business equivalents. They are managed by corporate treasurers. The title question, or variations, is one I have to answer quite often. Even more around the holidays, when I always meet my relatives. I am tweaking the answer constantly. Connecting private and business is my current strategy. Perhaps you (expert in the field or layman) can let me know if this explanation works for you.

You have a current, savings and perhaps other account. You pay the rent, groceries and a beer. You use a debit or credit card, cash, a cheque, paypal or other channel. You take care only you and the people you trust have access to your money. Corporate treasurers build and maintain a banking infrastructure that allows payments. They think about who is allowed to make payments (often they are), who can authorize (not a payment person), what bank to use and potential other payment channels.

You have a mortgage or personal loan so you could buy a house or pay for groceries when at the end of your paycheque the month did not come to an end yet. Corporate treasurers find funds necessary for their company and have a wider set of products available like bank credit facilities, bonds or new equity.

You feel fluctuations in interest and currencies when you cross the border to another currency country. Your mortgage, current account and credit card come with an interest. Both currencies and interest change over time: financial markets are not stable. Many of us just accept these changes. Corporate treasurers think and manage these risks: they think about the currencies in commercial contracts, about the length & price of various funding products and about mitigating the risks, for instance using derivatives.

Of course the above description is an oversimplification of the position. Treasurers have many other tasks and the complexity in a corporate environment is higher than a standard household situation. Furthermore I want to stress is that treasurers are not bookkeepers or controllers: they do not send or receive invoices and do not write the annual report. They manage actual money flows.

 

 

 

Pieter de Kiewit

Owner Treasurer Search

 

BELLIN Launches SWIFT g4C Product Offering

| 30-07-2019 | BELLIN |

BELLIN, a global leader in providing treasury software and services, has successfully integrated SWIFT gpi for Corporates (g4C) in its tm5 treasury management system and completed the pilot and Early Adopter phase. With the BELLIN SWIFT product offering extended, all BELLIN clients can now benefit from fast cross-border payments as well as tracking directly in the tm5 system.

tm5, BELLIN’s treasury management system, has supported SWIFT g4C technology since as early as April, making BELLIN the first of the TMS provider Early Adopters with a customer live on g4C. SWIFT has now officially launched gpi for Corporates, enabling all users of the BELLIN SWIFT Service to consider benefiting from transparency and traceability for cross-border payments. Corporates need their own SWIFT BIC to make use of the SWIFT g4C technology. They register their BIC with gpi for Corporates and connect financial institutions that offer g4C. Started Monday, June 24, 2019, the entire SWIFT community can register their BICs for the new SWIFT g4C technology.

SWIFT g4C from pilot to live

“All of us, our clients, BELLIN and SWIFT, are bound by the desire to advance corporate payments. This is why we have worked hard in a concerted effort to implement SWIFT g4C technology,” explains Karsten Kiefer, Product Manager SOLUTION MANAGEMENT at BELLIN. “With SWIFT g4C, corporates will benefit enormously from speed, transparency and comprehensive information with cross-border payment processing. The obvious advantages will make for an immediate success story.”

The BELLIN SWIFT Service enables BELLIN clients to receive their own BIC and to gain access to the SWIFT Network as a member of the Standard Corporate Environment (SCORE). BELLIN takes care of the BIC application, connects the company to the SWIFT Network and guides the client through onboarding and configuration. The BELLIN SWIFT Service has been part of BELLIN’s portfolio since 2013, making BELLIN the very first treasury management system provider with a service of this kind. Today, over 160 customers use the BELLIN SWIFT Service.

Interview with Karsten Kiefer on the SWIFT g4C integration in BELLIN’s treasury management system and the benefits for corporates

About BELLIN

BELLIN is the global leader in technology for corporate banking and treasury. We provide solutions for the financial sector, catering to a range of clients from large multinationals to SMEs and banks. Founded by a treasurer, BELLIN has been championing innovation and out-of-the-box thinking since 1998. With the treasury software tm5 as the centerpiece, BELLIN makes a fundamental difference by offering solutions that zero in on the relationship between corporates and banks and cover everything from payments to FX, cash and risk management. BELLIN is an international company with offices on four continents, powered by a trailblazing fintech spirit and yet firmly rooted in the heritage of German craftsmanship and engineering. BELLIN delights 500 clients and over 80,000 users around the globe.

Corporate Treasury have a problem and this is why…

| 23-07-2019 | by Pieter de Kiewit |

Cost savings created by good treasurers easily exceed the sum of salaries of their team. They can help open doors that otherwise stay closed for their business colleagues and they can help avoid risks. Then why do they have this modest seat at the table of CFOs and are they often not considered for succession of her/him? Why are SMEs complaining about the lack of funding opportunities, when treasurers have them available? Why are Basel regulations made by bankers and politicians, where are the corporate treasurers? Why does treasury education not have a more prominent place in education? Why do bankers earn the bigger bucks? Corporate treasury has a PROBLEM!

The non-treasurers (CFOs and business owners) often do not know, so they do not consider this a problem. I think they should, given my introduction. The treasurers I meet often experience the problem: they want to be educated, make career progression, be involved in business and have better salaries. Why do controllers or non-financials not encounter this issue, or at least in a lesser degree?

Based upon my many interview notes and the first results of the dataset of the Treasurer Test I have a first hypothesis (there will be more): the personality of people working in treasury. A Big5 personality assessment has been done in a treasury population of 100. What I see is that treasurers, on average, are easily as driven as the general population. That should be a proper foundation. Where they score substantially different is in two aspects:

  1. They do not make contact quickly
  2. They are not focused on convincing other people.

The two obvious solutions are bringing people with a different personality into the treasury field and stimulating the current population to speak up. As recruiters we hope to contribute by bringing (for example) bankers into corporate treasury. Bankers often show a different personality profile. Furthermore I think we should not try to change the personality of the current population, but skills training will most definitely help.

Do you see the problem and want to step up? I hope so.

 

 

Pieter de Kiewit
Owner Treasurer Search

 

How to Solve the 4 Main Payments Challenges

| 18-07-2019 | BELLIN |

Sascha Kopp has been a Consulting Director with BELLIN for over 10 years. He has successfully accompanied and implemented well over 100 payments projects in international groups. In this interview, based on our on-demand webinar, he outlines the 4 main payments challenges for corporates and how to best tackle them.

#1 payments challenge: a complex set-up

What is the biggest challenge for international businesses in handling their payments?

When it comes to payments, the biggest challenge for companies is usually their existing set-up. Very often we witness the following: You have banks on one side, ERP systems on the other side, and the individual entities in the middle. They all exchange payment data, generated by various technologies and in different formats, communicated by several channels. Companies find it difficult to manage this complexity.

How can companies make sense of this complex set-up of several e-banking systems, payment platforms and communication channels?

A payments solution, such as BELLIN’s integrated payments platform in the tm5 treasury management system, allows corporates to leave complex set-ups behind: instead, they experience simplicity with one platform that is accessible to all group companies and connected to all ERP systems and banks. tm5 can be used with any payment format.

You can access it on a desktop computer, mobile phone or tablet. All you need is Internet access. One of the many benefits of this solution is that it is scalable and can be adapted to changing company requirements – and we all know companies change all the time.  Every time a new entity is added, no matter where in the world, this company and its banks can easily be connected to the payment platform. There is no need for an additional solution. The tm5 platform handles it all and is easy to use, transparent and secure when communicating data.

#2 payments challenge: fraud and cyber crime

How important is payment fraud?

Fraud, cyber crime and internal manipulation have been increasing dramatically for years. In 2016, the Leoni Group lost 40 million euros to payment fraud. In 2017, ABB reported a fraud case amounting to 100 million dollars. Companies lose more and more money and the number of attacks has been growing. This was confirmed by the AFP Payments Fraud & Control Survey published in April 2019: 82% of companies report having fallen victim to payment fraud.

How can companies best protect themselves against payment fraud?

Organizations currently invest a lot of time and money in fraud prevention. The best way of achieving payment security is to eliminate vulnerabilities, i.e. by using a multi-bank payments platform with integrated user permissions management such as BELLIN’s tm5. Thanks to a single point of entry and an additional security measure by way of 2-factor authentication in the BELLIN Connect app, tm5 protects companies from external threats. The integrated permissions functionality enables companies to define and manage user rights and implement dual approval for payment processing, thus ensuring compliance.

#3 payments challenge: cost

How can companies save money in their payment process?

In addition to bank fees, payments processing eats up resources. For most companies a centralized set-up is the most efficient – as well as the most secure – option to manage group-wide payments with only one team. As a web-based system, tm5 also enables decentralized cooperation using a central platform. We refer to this approach as Load-balanced Treasury.

What is the most affordable payments set-up for companies?

The most cost-efficient combination of formats and connectivity always depends on the countries in which payments are processed as well as on the volume of payments. tm5 offers all types of connectivity, be it local standards such as EBICS, host-to-host connections to main banks or a global solution such as SWIFT. BELLIN consultants offer advice on how to find the most affordable solution.

#4 payments challenge: new banking partners

What is the impact of changes to the banking landscape on corporate payments?

Companies are hit hard by changes to the banking landscape. In recent years, some banks have discontinued their services in some countries over night. But even when the selection of a new banking partner is driven by strategic and cost reasons, this change usually goes hand in hand with a new, additional e-banking system.

But it could be so much simpler: Companies who process their payments on the integrated payments platform in the tm5 treasury management system always work with the same user interface. This user interface is independent of the banks, channels and payment formats a company uses.

All in all:

Make the move to a central, multi-bank payments platform and benefit from:

  • compliance
  • security
  • reduced cost and effort
  • 100% visibility and transparency
  • 100% cash flow visibility
  • 100% independence thanks to self-administration

Sascha Kopp author picture

Sascha Kopp
Consulting Director at BELLIN

 

Does your payment land in the correct currency account?

| 16-07-2019 | by Pieter de Kiewit |

Recently I received signals from a treasurer working in a mid-sized company about payments in various currencies landing on the wrong account. In a payment of USD 1 million, this could lead to extra cost of about USD 9,000! This results in extra cost and should be avoided…

In most SMEs in Europe a payment from US clients will be transferred in US dollars and lands in EURO’s. Banks facilitate this process and their fees consist of two parts:

  1. a transaction fee that is often a fixed fee or maximized percentage of the amount transferred
  2. a price to make Euro’s out of US dollars, following a conversion rate (the price you pay for buying dollars is different from the sell price, the difference is called “the spread”).

If you receive payments in US dollars regularly, you can consider opening a US dollar bank account. Therefore, you will avoid constant payment of the conversion rate. This is most relevant when you also make payments from this account. All big banks offer bank accounts in various currencies as a paid service.

Let’s take a deeper dive into the signals that I received: A foreign client made a payment in dollars with his dollar account. He transferred the dollars to the Euro account of my contact. This was all documented. Nevertheless, the bank charged transaction and conversion fees. Luckily this was discovered by my contact. After informing the bank about this issue, the bank repaired it all.

There could be various reasons why this happened. We all know that the global IT landscape in traditional banks consists of many different systems of a different age. A network problem could be a possible issue. The likelihood of this happening again is high, so be aware! Also, although we do not like this, it could be that this payment was handled manually. A mistake is easily made, hopefully not too frequent. It would be the worst case scenario when banks manipulate payments in order to claim fees. Let’s assume this is not the case.

The point I want to make: check if payments land on the proper currency account or it will cost you!

Any of you encountered misrouted payments?

PS From my own experience: in your ebanking environment, the default currency is not necessarily the currency the account is in. My GBP account had EURO as default currency…

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Duplicate Payments: Instability with Multiple Platforms

| 24-06-2019 | BELLIN |

It is an arduous request for your Enterprise Resource Planning (ERP) payment platforms or IT department to provide ample protection against duplicate payments and cyber-fraud.  Though it can be tempting to assume administrative controls can provide protection, the facts can show otherwise. Supplier invoice payments are typically the largest annual payments and consequently, represent the highest amount of risk.

According to an Acculytic’s report on duplicate payments, “industry studies have shown that the rate of duplicate payments can be as high as 3%. In fact, 20% of the best performing companies, responding to the 2013 ePayables survey performed by Ardent Partners, had an average duplicate payment rate over 1%.”

Acculytic’s report also stated that “the Institute of Finance & Management (IOFM) concluded that a quarter of the respondents reported duplicate payment rates between 0.1% and 0.5%. Applying these rates to different purchase volumes suggests the following rate of duplicate payments may be generally applied across all organizations.”

Rate of Duplicate Payments ($)
Purchase Volume 0.1% 0.5% 1.0%
$10,000,000 10,000 50,000 100,000
$50,000,000 50,000 250,000 500,000
$100,000,000 100,000 500,000 1,000,000

How duplicate payments and payment fraud can bypass controls

Even the most sophisticated controls still have their pain points. Here are 5 ways that duplicate payments and fraud can unhinge even the best administrative controls:

1) Human error transcends even the most secure systems.

Regardless of how technologically-sound and secure an ERP or IT infrastructure is, mistakes can always occur. Such systems can typically alert when duplicate payments occur by executing matching runs. However, matching runs are incapable of determining if there was an error earlier in the submission phase.

2) Multiple systems leading to inefficiency

The presence of multiple systems is not rare with large multinational organizations. Payment processing becomes more complex in terms of ensuring ample security is present. The seamless connectivity between all systems is a paramount function to be able to detect duplicate payments.

3) Platform migration limbo period presents payment risk

When migrating from one platform to another, there is often a period in which one platform is introduced before the initial is removed. That period before the legacy platform is removed causes a risk for duplicate payments.

4) Administrative controls: biggest strength is a potential weakness

Automation comes with pros and cons and is effective with routine tasks but your integrated controls systems can hamper the speed and efficiency of your productivity. Duplicate payments are detected based on the parameters set and if there are too many parameters, a majority of payments will be flagged. With too few parameters, duplicate payments will slip through the cracks.

5) Accounts Payable are susceptible to internal fraud

Automated detection is a first line of defense but cannot factor in employees that are extremely familiar with the parameters and know how to evade detection. Invoices under certain amounts tend to not require secondary approval, leading to undetected invoices being processed.

3 essential ways a centralized platform can prevent duplicate payments

  1. Seamless data extraction for routine analysis that will not slow operations.
  2. Ability to consolidate and analyze data from any subsidiary or location.
  3. Digestible data that is concise with the system providing relevant alerts for fraud or issues in payment processing.

Bonus function: the ability to analyze historical payments and check for duplicate payments, tax or currency problems, contractual compliance, etc.

Eliminate duplicate payments with a centralized platform

For comprehensive protection, BELLIN’s treasury management system, tm5, will seamlessly connect all of your banks and enable you to process payments and view master vendor information. The centralized platform allows you to connect any system to any bank giving you a true, single-window view of your worldwide banking data.

With company-wide visibility as a core competency of tm5, users can monitor payment and vendor information through the entire workflow. Consequently reducing the chance for duplicate payments that originate from external or internal sources.

Treasury management systems are both innovative and extremely helpful. Knowing this, treasurers are tasked with realizing and dealing with the limitations of having multiple systems. Centralizing payment processes with automation that ensures security is an extremely efficient way to maximize controls and minimize the chance for duplicate payments to occur.


Martin Bellin

Founder & CEO at BELLIN

Webinar: Interested in how to minimize costs for FX payments?

| 20-6-2019 | TIS |

Does your firm have a global payment landscape? Are all FX payments globally and their associated costs visible to you?

If the answers are Yes and No, you don’t want to miss this 30-minute webinar chaired by Ebury, one of Europe’s fastest growing FinTechs and TIS, a global leader in corporate payment solutions.

For corporate treasurers and cash managers, FX risk management is part of the daily tasks. In this joint webinar presented by Ebury, a global finance specialist in foreign exchange, and TIS, a global leader in cloud-based corporate payment SaaS solution, the experts Thomas Fakhouri, Head of Technology Partnerships at Ebury and Nikola Hristov, Product Owner at TIS, will discuss how a fully integrated and automated payment process with add-on FX service generates enormous saving opportunities for corporates.

Register today

Wed, Jun 26, 2019
3:00 PM – 3:30 PM CEST

Webinar: Optimize your payment processing security

| 13-6-2019 | BELLIN |

How to optimize your payment processing security via administrative control

This webinar installment takes a deep dive into the need for a centralized payments platform that maintains a hyper-focus on security. Join in as we discuss, how the essential synergy between technical security specifications and administrative controls creates optimally safe and efficient processes.

Webinar start: 27 June 2019 | 16:00 CEST
Webinar run time: approx. 20 min

Register here

Katja FranzPresenter
Katja Franz, Senior Treasury Consultant

A graduate of International Business at Fachhochschule Trier and European Business & language at National College of Ireland, Katja Franz has a background in treasury and cash management that has spanned the globe. With experience in banking and reconciliation at Hertz Europe, cash and credit administration at State Street Bank, as payment implementation specialist for Bankhaus August Lenz and as freelance consultant, she has brought success to projects across banking and treasury.

At BELLIN Katja has brought her experience and her passion to the BELLIN treasury consulting team, focusing on treasury management software, project management and process optimization. She is a keen team player who is committed to her work and always eager to learn something new.

About BELLIN

BELLIN is the global leader in technology for corporate banking and treasury. We provide solutions for the financial sector, catering to a range of clients from large multinationals to SMEs and banks. Founded by a treasurer, BELLIN has been championing innovation and out-of-the-box thinking since 1998. With the treasury software tm5 as the centerpiece, BELLIN makes a fundamental difference by offering solutions that zero in on the relationship between corporates and banks and cover everything from payments to FX, cash and risk management. BELLIN is an international company with offices on four continents, powered by a trailblazing fintech spirit and yet firmly rooted in the heritage of German craftsmanship and engineering. BELLIN delights 500 clients and over 80,000 users around the globe.

 

 

The (Im)possibility of Liquidity Planning

| 07-06-2019 | BELLIN |

Defining and establishing liquidity planning workflows

Liquidity planning is extremely essential. Companies can survive a certain amount of time without making a profit. However, they will go down within just a few days if they lack the necessary liquidity. Therefore, liquidity planning is high on any treasury’s agenda.

Suddenly, cash was in short supply. Everything ground to a halt. Indeed, the crisis of 2008 has shown how important it is for companies of all sizes and industries to plan with liquid assets. They have to ensure that liquidity fluctuations will be hedged adequately and that times of tight liquidity can be overcome easily. Even long-term profitability cannot always serve as a guarantee that financial markets will be able to provide sufficient liquidity in times of crisis – unless waterproof strategic agreements for financing liquidity shortages were concluded long before the crisis. Liquidity planning is not the same as planning a company’s cash balance. Instead, it forms a basis for strategic hedging decisions in interest, currency and commodity management.

When you begin dealing with liquidity planning in your business, you may be disappointed at first. You will not be able to transfer experience from a balance sheet and profit and loss (P&L) calculation. As a first step, you will need to define liquidity planning and set your treasury’s liquidity planning goals.

Liquidity Planning Versus Cash Management

Liquidity planning serves to illustrate cash flows from all organizational units over time. lt distinguishes between different cash flows, e.g. customer payments and HR payments. The timeline – the underlying planning horizon – usually includes the next six to twelve months. However, certain business models may require planning several years in advance. Never confuse liquidity planning with daily cash management, which focuses only on future balances of individual bank accounts and on creating daily cash forecasts.

The quality of balance sheet and P&L planning is determined by its accuracy. The better the planning, the more accurate the predictions. In the relationship of balance sheet and P&L to liquidity planning, the most important factor is the end result: both plans should result in the same balance at the end of a period. To ascertain this figure alone, a treasury department would not need to create its own liquidity plan. Yet from a treasury perspective, the projected balance is only a means of checking plausibility at the end of the planning horizon. Even the smallest change in an underlying transaction or payment can lead to significant changes in the final result, without affecting overall corporate success or reducing the quality or even sense of liquidity planning as a whole.

A Basis for Hedging

Determining a precise cash balance at the end of a particular planning horizon is not the goal of liquidity planning. Its focus lies on analyzing the differences between an original plan and a rolling plan. The treasury department bases hedging decisions on the original plan. Then, it examines the reliability of these risk management measures. If the treasury finds significant inconsistencies, it can swap or create new foreign exchange deals, negotiate new credit lines or revise the maturities of interest­ bearing transactions.

Liquidity planning is possible. However, it is impossible to plan liquidity in terms of cash on hand at a particular date. With this different goal in mind, liquidity planning becomes the basis for strategic hedging decisions. Only a liquidity plan that is kept up to date can provide information on when to expect cash flows in foreign currency,  when group companies need more liquidity within the  planning period and when excess liquidity will be returned.

Interest and Currency Risk

Liquidity planning is not just about liquid assets, however. Flawed planning can have negative side effects, particularly with regard to financing and related interest. High interest rates can reduce income and reserve assets of companies that are notoriously short, i.e. always in a position of net debt. At the opposite end of the spectrum, companies in a «long» position, i.e. those who have sufficient liquidity to finance their ongoing business, miss out on interest earnings. They rarely consider such opportunity interest.

Interest topics aside, liquidity planning also deals with the somewhat more complex issue of foreign exchange risk. Currency exposure can also affect cash on hand. The media frequently circulate striking examples, although they often wrongly blame derivatives for lack of liquidity or financial losses. In any case, it is important to note that a shift in exchange rates may have a decisive influence on the liquidity development of companies active in countries with foreign currencies.

Liquidity planning made easy in tm5

With tm5’s cash and liquidity management solution, users benefit from real-time liquidity management across your entire corporate group.

Our technology lets you make short-term or long-term liquidity forecasts across all subsidiaries in the corporate group. Be prepared for all eventualities.

  • Make use of scenario planning via detailed financial reports that enable you to stay on top of cash flow management
  • Generate payment forecasts in different transaction currencies
  • Define your individual planning categories
  • Conduct plan comparisons
  • Use your own capacity for effective planning, whether it be a matter of days – or years – into the future
  • Consolidate planning data across all subsidiaries within your corporate group
  • Use a reconciliation matrix to resolve intercompany conflicts
  • Aggregate liquidity planning on a group-wide level
  • Calculate hedging ratios and your company’s refinancing strength based on any possible scenario.

Product: Cash & Liquidity Management

Room to Breathe

No company can exist without liquidity planning: it would be incapacitated within just a few days. Primary liquidity risk factors take a company’s liquidity – its room to breathe. Cash management is essential for short-term planning horizons. In the medium and long term, companies require a liquidity plan, a prerequisite for meaningful risk management, which is cleanly separated from corporate financial planning. These two topic areas deal with interest and currency management from different perspectives. Companies need to ensure a basic liquidity supply, consider supply costs and take into account possible fluctuations caused by currency exchange factors.

Martin Bellin

Founder & CEO at BELLIN

Webinar: How to streamline your banking landscape

| 14-5-2019 | BELLIN |

The expert guide on how to streamline your banking landscape with the perfect combination of banks, channels and formats

This webinar sheds light on the complexity of diverse bank connectivity options for each corporation. What channel or combination of channels are you going to use to connect to your banking partners in a process- and cost-efficient way? Will you capitalize on host-to-host connections or will you be taking advantage of SWIFT, get your own BIC code and become bank-agnostic? Find out about various options and multiple ways of combining them to eventually configure the custom-tailored payment setup that perfectly suits your treasury’s needs.

Webinar start: 6 June 2019 | 16:00 CEST
Webinar run time: approx. 20 min

Register here

Presenter
Anton Wahl, Senior Treasury Consultant

Anton Wahl is Senior Treasury Consultant and Payments Specialist at BELLIN and in charge of various projects. He has extensive experience with international SWIFT, H2H and EBICS payment implementation projects. Anton joined the BELLIN team in 2008 and first worked for the Service & Support Team before changing to Consulting & Implementation in 2015. He is a certified SWIFT Specialist for Corporates and obtained the designation Certified Payment Professional from Frankfurt School of Finance.

About BELLIN

BELLIN is the global leader in technology for corporate banking and treasury. We provide solutions for the financial sector, catering to a range of clients from large multinationals to SMEs and banks. Founded by a treasurer, BELLIN has been championing innovation and out-of-the-box thinking since 1998. With the treasury software tm5 as the centerpiece, BELLIN makes a fundamental difference by offering solutions that zero in on the relationship between corporates and banks and cover everything from payments to FX, cash and risk management. BELLIN is an international company with offices on four continents, powered by a trailblazing fintech spirit and yet firmly rooted in the heritage of German craftsmanship and engineering. BELLIN delights 500 clients and over 80,000 users around the globe.