Tag Archive for: TMS

CASH FORECASTING SURVEY RESULTS 2019 TOO MUCH PROCESSING, NOT ENOUGH FORECASTING? – 5 KEY INSIGHTS

| 26-03-2019 | treasuryXL | Cashforce | Nicolas Christiaen

Cash is often labeled as the lifeblood of an organization as it enables a company to function. However, when it comes to forecasting cash, most companies face various challenges. Afterall, it starts with the uncertainty of the future, but more factors are at play. Decisions about risk vs reward, the essence of business, can be difficult. To learn more about the complexity of the topic from first-hand data, we initiated the first Cash Forecasting Survey together with the Financial Executives Consulting Group. This survey was focused on senior financial and treasury executives. The 225 respondents are active across a variety of industries (manufacturing, energy, retail, telecommunications, health care, …) that range from smaller businesses (35% under $50 million revenue) to big corporations (28% over $1 billion revenue).

This survey aims to dig a little bit deeper into the challenges that companies are currently facing, the underlying causes of these difficulties, as well as possible future trends and technologies that could ease these challenges. The results of the survey will be discussed in-depth during a webinar on the 27st of March, 2019 (11am EST / 4pm CEST). To lift the veil slightly we’ve distilled our top 5 key insights below.

1. CASH FORECASTING REMAINS THE TOP ISSUE

A company’s ability to forecast the future with any degree of certainty is determined by external factors (i.e. competitor’s actions, market conditions such as interest rates and local tax rates) or internal factors (availability of funds, staff available, technology in use, access to data etc.). Regardless of whether one is a pessimist or an optimist there should be very little to argue about the fact that cash forecasting is one of the central pillars of treasury, and therefore has been on the radar for improvement for many companies for a decade. The graph below hints at the current focus: Given the opportunity to rank the most important issues over the next year, “cash forecasting” comes out on top (34%). Furthermore, we see in the answers that there is a big focus on the outcome as such, as well as on improving the current processes that are at play (such as management reporting, upgrading financial systems).

WHAT IS THE MOST IMPORTANT ISSUE FOR YOUR COMPANY OVER THE NEXT YEAR?

2. TIME IS MONEY

For the past decades, Excel has been integral to businesses everywhere. It’s embedded in countless processes throughout the company, including within finance and treasury departments. While spreadsheets remain popular as a tool to accomplish many tasks, even their users admit that they are error prone. Moreover, maintaining data integrity within spreadsheets can be a cumbersome and manual task since this type of technology was never meant to be an integrated solution to business issues (i.e. data from one spreadsheet almost never flows seamlessly into another spreadsheet).

Nonetheless, as the graphic below lays out, more than 9 out of 10 respondents continue to use spreadsheets for collecting/creating cash forecasts & making comparisons to actuals. 69% of respondents however find the process too time consuming. On top of that, the graph clearly shows that this is the case in all surveyed treasury/finance areas. Overall, we can state there is still a great over reliance on spreadsheets, from cash forecast generation to debt management. Combined, these insights indicate a dire need for a better solution in the area of cash forecasting and treasury management.

DO YOU USE EXCEL SPREADSHEETS FOR THE FOLLOWING TASKS?

WHAT ARE THE LIMITATIONS OF USING SPREADSHEETS TO PERFORM?

3. PROCESSING AGAINST THE CLOCK

The following graph further illustrates how frustratingly long any spreadsheet driven forecast process can be. If we look at the distribution of respondents that spent more than 10% of their resources on creating/updating cash forecasts, we can see that 43% of respondents spend more than 2 hours a day on average on creating/updating cash forecasts. Naturally, with only limited resources available for processing, forecasts will be less than “perfect” until conditions are changed.  Investing in “better” technology has been shown to help the forecasting process, but technology alone (i.e. working faster) is not a substitute for working smarter (i.e. more strategically) as the following survey observation makes clear.

WHAT PERCENTAGE OF STAFF RESOURCES ARE SPENT ON CREATING/UPDATING CASH FORECASTS?

4. A TMS IS NOT MADE FOR CASH FORECASTING

It cannot be said with certainty what the “perfect” allocation of resources devoted to processing vs planning / analysis should be in the forecasting process. As mentioned earlier there is a continued reliance on a disparate set of 1980s technology (i.e. spreadsheets) perhaps because they are easy to use and offer a certain degree of flexibility. However, basing your forecasting on technology that offers little in the way of scenario planning, ability to sum up / drill down through an organization or track change by date, user, etc.  may constrain a company’s ability to measure its success.

In response to the weaknesses of spreadsheet driven forecasts many companies over the last decade have implemented a large number of Treasury Management Systems (TMS). Yet, the adoption of a TMS for forecasting purposes has been slow to occur. As the survey results show, more than 9 out of 10 respondents still use spreadsheets for cash forecasting, even when using a TMS. It is a surprising statistic and may indicate that a TMS maybe better at processing (e.g. cash positions, payment execution, cash accounting, etc.)  than at planning / forecasting.

WHAT FINANCIAL SYSTEMS ARE USED WHEN PERFORMING THE FOLLOWING FUNCTIONS?

5. NO PROPER REWARD STRUCTURE BASED ON CASH FLOW

As seen in previous paragraphs, the processes involved in cash forecasting are mostly done manually and with error-prone tools and processes. As a result, companies frequently struggle to foresee unexpected occurrences that impact the livelihood of their business. Bridging these gaps can pose considerable risks and can be very costly to overcome. Consequentially, one would expect companies to put rewards in place for their business units in order to draw out valuable insights when it comes to cash flow. Yet, 3 out of 4 companies don’t reward their business units based on cash flow. Even among the large companies (i.e. revenue > 500MM) only 33% of companies reward their business units based on cash flows. It prompts the question: If cash forecasting ranks as the number one issue, how come it is rewarded as a by-product rather than a focal point?

WHICH METRICS BELOW DOES YOUR COMPANY USE AND WHICH ONES ARE USED TO REWARD ITS BUSINESS UNITS?

CONCLUSION

As the survey shows, cash flow forecasting is an important tool used by businesses to peer into the future and work towards accomplishing previously set profitability, liquidity and risk goals.

Unfortunately, all forecasts will be “wrong” as the future is uncertain and forces companies to navigate through a seemingly infinite sea of scattered data that only increases over time and becomes prone to human error as it accumulates up and down the organization.

Though no forecast will be perfect, any forecast requires a certain amount of dedicated resources (e.g. staff time throughout the company, integrated sets of data and the technology to turn data into information). If too many resources are devoted to processing then there will be less time remaining, possibly reducing the quality of actual decisions made. Few companies should base their strategic decisions based mostly on time left over as it may harm, not benefit the company. Depending on the size of the company, the following trends can be seen:

  • At many large companies treasury departments have taken the lead on cash forecasting by beginning to replace their spreadsheets with more purpose-built applications such as a TMS, but even this type of system appears to have limitations, perhaps because it had its origins in processing transactions rather than comparing alternative futures and lacks real “what if” features.
  • At small to medium sized companies FP & A areas are often responsible for cash forecasting, but, as the survey shows, spreadsheets are not the best forecasting tool and ERP systems contain only historical data that is difficult to extract and project into the future.

There is no definite answer to what mix of resources should be employed to achieve success, but relying on the current mix of disparate technologies doesn’t seem to be the answer. Fortunately, advances in new technology available to users through out a company are paving the way towards a clearer future, one driven by analytics, visualization, automation and transparency of data across an entire company.

Curious about additional findings from our survey? Be sure to register here for the webinar on the 27st of March, 2019 (11am EST / 4pm CEST) where we will discuss these and other findings and learn more about the challenges and solutions of Cash Forecasting.

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Blockchain Smart Treasury: game-changer for treasurers?

| 19-3-2019 | Carlo de Meijer | treasuryXL

Though blockchain is not yet well understood by many treasury people, and tangible real-world applications for the corporate treasurer’s day-to-day activities are still scarce, this technology is getting increased interest in the treasury world.

In August 2016 I wrote a blog in Finextra named “The Corporate Treasurer and Blockchain”. My conclusions at that time were that blockchain had the potential to fundamentally change the treasury function at corporates. For some it would even going to be a game-changer for treasury. The change might not be here yet, but it is coming, and treasurers need to take a long view on it.

But that is changing rapidly. The focus of blockchain developers is now turning from proof of concept projects to the creation of more practical, treasury-focused blockchain solutions. Recently we have seen a number of blockchain-based treasury trials that are worthwhile looking at. Last December R3 announced the completion of testing on a new blockchain-based KYC proof-of-concept, which was facilitated in collaboration with the French Association of Corporate Treasurers and a number of French banks.

One of the solutions that triggered me most is Smart Treasury by Boston-based fintech Adjoint, that is aimed to enable real-time gross settlement and continuous reconciliation and improve the liquidity management of the corporate treasurer. Main question is, could Adjoint’s solution be a break-through for blockchain in the corporate treasury world?

It is always interesting – and I am a very curious person – to see new initiatives in the blockchain scene and what they could bring for corporates esp. the treasury department.

So let’s have a deeper dive.

Complex treasury environment

Internationally operating corporates have undergone many transformations in their finance and treasury organisations triggered by technology innovations, regulatory initiatives and changed client behaviours. As a result today’s business environment for these corporates is highly complex from a treasury point of view.

In the digital era, real-time insight into a company’s global cash positions and managing credit facilities across all bank accounts of the group and the ability to move money intraday to where and when it is needed is increasingly needed to support this changing business environment.

Key challenge is to obtain consolidated information of group-wide multi-currency positions across a fragmented banking network in a timely manner. Today’s model of international correspondent banking however does not easily facilitate the ability to manage cash in a real-time environment.

Corporate treasurers are urgently looking for new ways to provide cash management with up to date – and if possible real time – information on cash positions and cash forecasts faster and with deeper insight, allowing corporate treasurers to better react to the company’s current cash and working capital needs.

In this context, they are significantly increasing their spending on treasury technology and innovations, to speed up and streamline their company’s cash, liquidity, risk and working capital management, in order to gain greatest visibility over their business critical function and reach greater strategic control.

Adjoint’s Smart Treasury: what does it bring for corporate treasurers?

Adjoint’s Smart Treasury solution, that was launched last year, contains a number of unique specifics that makes it very interesting for corporate treasures.

Smart Treasury should be seen as a multi-bank, multi-currency virtual account platform for real-time gross settlement and continuous reconciliation. This should allow corporate treasurers to untap liquidity in their various subsidiaries’ bank account.

Adjoint has combined blockchain technology with related smart contracts and APIs (or application programming interfaces) to create a solution that aims to dramatically speed up settling intercompany transactions in a secured way while significantly reducing the costs.

Most important features of this Smart Treasury solution are the following:

Distributed ledger: Auto reconciliation

Smart Treasury uses distributed ledger technology to auto-reconcile transactions information, thereby eliminate netting processes and improve FX management to provide treasurers with streamlined efficiency and improved, real-time visibility on cash positions.

Virtual accounts

Another interesting feature is that it enables a limitless number of virtual or “sub-accounts” for reconciling customer and suppliers payments. Companies can thereby consolidate costly, physical bank accounts into a selected number of blockchain virtual accounts. Smart Treasury thereby enables “purposed drive allocation”, thereby using smart contracts to designate how much and where digitised cash can be spent from these virtual accounts.

“Money can then be debited or credited among those accounts as needed, using smart contracts and APIs to make the necessaire FX translations, apply interest on intercompany loans and similar calculations.” Somil Goyal chief operating officer at Adjoint

In-house self-service bank

Smart Treasury consists of an “always-on” in-house self-service bank with “pre-established” rules for automated intra-company transactions. Here you could think of limits on how much can be automatically borrowed by entities based on pre-established interest rates. Nowadays, intercompany transactions, often conducted via an in-house bank, have become essential for multinational corporations. They seek to leverage internal resources more effectively. However, the overnight batch systems most companies use to settle transactions, can limit the transparency into subsidiaries’ account balances.

Smart Treasury Dashboard: access

The solution allows corporate treasury departments to operate their own private distributed ledger. This may enable them to choose which internal corporate entities and third parties including customers and suppliers may have access to the network via their Smart Treasury Dashboard and settle transactions directly with them in real time, rather than overnight or even longer.

But also regulators could be added on the platform which may help notional pooling in jurisdictions with currency controls, while improving the regulatory reporting process by automatically updating records and centralising all information in the ledger.

Smart contracts

Another key feature of Smart Treasury is the use of smart contracts. The tool’s Smart Contracts System uses blockchain to help teams define and set pre-configured rules that securely enable automated, real time transactions. These may include key corporate treasury functions such as regulatory and corporate compliance requirements including KYC; account opening or transactions such as intercompany loans, FX and netting, manage liquidity in multiple currencies, transfers among any approved entities etc. so lowering the costs of booking transactions between subsidiaries.

API integration with corporate ERP and TMS systems

Smart Treasury offers a nearly real-time API-based integration with organisation’s existing systems. Instead of replacing systems such as enterprise resource planning (ERP) and Treasury management system (TMS), Smart Treasury works with current systems as an easy-to-be-integrated overlay, preventing duplicate entries. In fact Smart Treasury complement these, improving the way they interact by speeding up intercompany transaction settlement. Through using smart contracts, all transaction information is auto-reconciled and automatically posted into treasury management systems in real-time.

“With Adjoint’s solution this takes place much faster, at a much lower cost, and it will actuality accept feed from the banks using APIs, which then feed the ERP – again using API – and it carries all of the information necessaire through smart contracts”.Daniel Blumen, Partner of Treasury Alliance

API integration with banks

Smart Treasury also offers a real-time API-based integration with banks for transactions outside the organisation. The solution allows the use of APIs for real-time intra-day bank transactions processing as opposed to end of day batch processing. They enable the transfer of critical information and data between corporate entities and their banks and data providers, as well as between corporate entities within the corporate.

Read the full article of our expert Carlo de Meijer on LinkedIn

 

 

Carlo de Meijer

Economist and researcher

 

BELLIN 1TC treasury convention

| 7-3-2019 |  treasuryXL | BELLIN

For the seventh year running, the BELLIN 1TC Treasury Convention broke all the previous records. Over 500 attendees flocked to Rust on February 13/14. What did we learn? Here are the main takeaways from all the exciting debates, workshops and conversations in a nutshell: 

1. Time is ripe for disruptive technology

Buzzwords such as digitization, Artificial Intelligence (AI) or blockchain have been around for years. But only now are we moving from abstract concepts to concrete implementation. We’re at the beginning of an exciting and challenging new era, in which we’re called to put new technology to use where it will benefit treasury the most. Whether it is the use of Artificial Intelligence (AI) in fraud prevention, liquidity planning or decision-making or the use of blockchain for KYC issues: the potential is enormous but implementation must be well thought through. Ultimately, technology is a means to an end. The feedback from 1TC was clear: treasurers believe that new technologies are going to change their work life, and they are expecting their vendors to incorporate this technology in their systems.

2. The treasurer of the future

In recent years, treasurers have come into their own and established themselves as key players for their organizations. But what impact are new technologies going to have on treasury? What will be left of the treasury function as we know it in ten years? Will there still be treasurers in the future? What remains when all the treasury processes that have been digitized and automated disappear from the job portfolio? One thing is for sure: the core responsibilities of a treasurer are going to change, and treasurers are going to have to change with them. Treasurers need to develop a vision for their profession, and this vision needs to come from within the treasury community. In the age of technology, treasurers need to work out where and why they are needed and advertise their role. What is also indisputable is that technology is only ever as good as its users. So while the treasury profession will by no means become extinct, it does need to reinvent itself to some extent, to find new ways and to get connected.

3. Treasury organization 5.0

Treasury has reached a turning point. On one hand, treasurers are faced with the challenge of implementing technologies and structures already at their disposal in order to continue to simplify, automate, standardize and centralize processes. On the other hand, they need to look to the future and implement organizational changes and technologies that address two key issues: security and collaboration – within treasury and beyond. The objective must be to strengthen the internal organization and to get connected within your organization and with external stakeholders, in order to be ready to face any threats and market developments.

4. Faster global payments

The treasury of the future needs real-time solutions. An efficient, powerful treasury requires fast and efficient cross-border payment processing. This is why treasurers are looking for solutions to make payments faster. Nearly 75% of 1TC attendees are convinced: gpi technology will be a major step forward for their global payments processing. Meanwhile, a panel discussion between Ripple and SWIFT introduced Ripple’s cross-border payment solution based on blockchain – an offering most attendees (80%) had not come across yet. We’re excited to see if and when this technology will make its way into treasury. gpi on the other hand has just entered the world of treasury. As an Early Adopter, BELLIN has implemented the technology and has been piloting it with clients. Following Release 19.1 in April of 2019, it will become very easy for BELLIN SWIFT Service clients to implement SWIFT for Corporates (SWIFT g4C). And by the way: BELLIN is the most successful of all the L2BA connectors to the SWIFT Network: 55% of all connected corporates were connected through BELLIN.

 

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Netting: a viable value driver

| 17-12-2018 | BELLIN | treasuryXL |

How to save money and resources with a smart intercompany reconciliation process

The last two decades have seen treasurers graduate from haphazard data collectors to deliberate decision makers. As their empowerment is inextricably linked to the triumph of the internet and the technology it affords, it comes as no surprise that most of them are curious about new developments and eager to partake in them. Yet, the convenience and value of automated intercompany reconciliation is still comparatively underappreciated and overlooked. According to an article published in Financial Management just a few years ago, the vast majority of US companies still reconcile their balance sheet accounts manually and forfeit the countless benefits yielded by a centralized, agreement-driven netting process enabled by today’s technology.

What is Netting?

At its most basic level, netting is the offsetting of payables against receivables between two or more group companies to reduce the amount of net payments and save transaction costs. Originally a mere accounting task – ensuring that the balances of two accounts were matching – intercompany reconciliation has, with the advent of modern technology, transformed into an indispensable cash and FX management tool and thus become an integral part of treasury management.

The netting center — technology with teething troubles

The proverbial missing link to an enhanced netting process was the emergence of cloud-based Treasury Management Systems that afford users global visibility and control and enable the implementation of group-wide process automation. Bilateral netting was replaced by multilateral netting (figure 1) via the introduction of netting centers run by the group treasury. Isolated matching between single subsidiaries became obsolete, as the netting center acts as a reconciliation hub across the entire company: payables are made out by the respective group companies to the netting center, receivables get paid to the eligible subsidiaries by the netting center. Classically, this process was either payable- or receivable-driven. On the surface, this seems simple and efficient, but it’s not: as there is no room for doubt or dispute, it is susceptible to errors and abuse. In the case of payments-driven netting, subsidiaries can compromise the system by accidentally or willfully failing to enter invoices, while in a netting process based on receivables, group companies can enter fictitious agreements to garner illegitimate payments. In a setup like this, the netting center is as effective as it is blind – with guillotine-like precision it carries out what the subsidiaries have entered, without verifying its legitimacy. This creates uncertainty among the group companies and fosters catacombs of shadow bookkeeping at the expense of much-needed visibility.

Netting – it’s all about engagement

Therefore, modern multilateral netting systems should not only perform AP/AR matching but are also dispute management systems, performing – as we call it — agreement-driven netting. It enables payable- and receivable-driven netting, but in an advanced manner, as it encourages engagement and promotes transparency. Via the TMS, AP and AR line item data gets collected and subsequently matched. Disagreements are dealt with in a structured dispute process, the rulebook of which is defined by the company’s management according to the requirements of the group. Disputes between subsidiaries get reviewed by the netting center, which acts like a referee, applying said rules. The key principle and the main advantage of this approach is the engagement it fosters: each party gets their say, no one can be taken advantage of, all transactions are transparent as everything gets recorded and the proper settlement of balances is ensured.

Multilateral Netting as a cash and FX management instrument

The advantages of such a process are obvious: With fixed dates for netting runs, incoming payments can be predicted precisely. The netting center respectively the central treasury enjoys maximum control and visibility of cash movements and can optimize the use of funds within the group. The same holds true for FX hedging: netting enables subsidiaries to transfer the FX risk to the central treasury, where seasoned experts deal with it for the entire group. Consequently, the number of FX trades – and with it the transfer and bank fees – gets significantly reduced, as each subsidiary will only have one cashflow per netting run towards or from the netting center in a fixed currency set beforehand. As the netting center acts as an in-house bank, the group companies don’t make any payments via bank accounts anymore, which saves cost and resources and provides added transparency.

Cost reduction via best practice netting: figures!

Let me provide you with just one example from the plethora of companies, who were able to streamline their operations and encounter significant savings via a TMS-based netting process: the Austrian tool manufacturer Tyrolit, whose Success Story and accompanying video we’ve featured previously as part of our We Love Treasury 2 series. Upon counting all payments via bank accounts between group companies, Tyrolit arrived at the impressive number of 600 per month, most of them international, entailing substantial bank fees as well as float. The fact that many of those transactions were made in foreign currency added significant translation costs to that, which were hard to calculate due to the different margins the banks offered. With the roll-out of an agreement-driven netting process across the group, Tyrolit managed to reduce the number of transactions to a mere 5% of the original amount and ended up saving the whopping sum of about 500,000€ per year on bank fees and translation costs alone.

Netting company-wide: benefits, benefits, benefits

By transforming a company’s entire intra-firm trade, a robust multilateral netting process offers benefits galore, including but not limited to:

  • a company culture that enables dialogue, promotes engagement and fosters transparency and trust
  • facilitated cash and liquidity management via centralized IC reconciliation on fixed dates in fixed currencies
  • fair distribution and optimization of refinancing cost
  • centralized FX hedging aiding the consolidation of an over-complex banking landscape, reducing bank fees and minimizing translation costs
  • overall enhanced efficiency, visibility, security and compliance

By the way: the implementation of netting software is fairly straightforward, software-wise, once you’ve decided that you want to follow through with the process. It’s a one-time technical impact, user-training can be performed very efficiently and hosting as well as outsourcing options are available to overcome capacity shortages. So what are you waiting for?


Dr. Teut Deese
Staff Writer – BELLIN 

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Check out the video: “Netting: How to save resources with smart IC Reconciliation,” in which Martin Bellin gives us an in-depth breakdown of how your company can take full advantage of the associated benefits.

 

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

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

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

 

 

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

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

The first step: compiling information

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

The next step: Turning information into insight

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

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

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

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

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

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

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

TIPCO Treasury & Technology GmbH

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Cashforce raises €2 Million to accelerate international rollout

| 27-02-2018 | Nicolas Christiaen | Cashforce | sponsored content |

Cashforce, a fintech leader in Cash forecasting & Treasury solutions for corporates, announced today that it has closed € 2 million in Series A financing. The internal funding round was led by Volta Ventures and Michel Akkermans (Pamica NV), reinforcing their previous commitment to the company. The Series A financing enables Cashforce to accelerate the ongoing international roll-out and fuels its rapid global growth and industry leadership as a premier provider of Cash forecasting & Treasury solutions. Organisationally, staff will be expanded, and operations will be scaled up – with a significant number of new hires in 2018. Product-wise the company is working on developments that will enable even more insights and potential savings for its clients. Commercially, supporting and growing the customer base and increasing customer success and adoption as well as continuing to build strategic partnerships and alliances are part of the strategic plan.

“Cash management & Treasury is evolving from a focus on data acquisition to Treasury automation and data analysis, enabling Treasury departments to bridge the gap between the Finance and other operational departments and enable data-driven strategic decision making. On top of that, Cash flow forecasting has become the major focus of the industry.”, said Nicolas Christiaen, CEO and co-founder of Cashforce. “This investment also re-confirms our investors’ confidence in the leadership that Cashforce has established in the Treasury space, our continued rapid growth and the potential to re-define the category.”

Additionally, Cashforce announced that Michel Akkermans will become Chairman of the board. Michel Akkermans is a serial entrepreneur in fintech companies. Amongst others, he was the Chairman and CEO of successful companies such as FICS and Clear2Pay. After the global payment solution company Clear2Pay was acquired by FIS in 2014, he became an active investor and board member in several companies and private equity organisations, as well as a venture partner and Chairman of Volta Ventures.

Cashforce: The Leading Cash forecasting platform for the Modern Corporate

Cashforce is a next-generation Cash forecasting & Smart Treasury Management System, focused on automation and integration for corporates. It helps corporate finance/treasury departments save time and money by offering accurate cash flow forecasting, pro-active working capital management analysis as well as flexible Treasury reporting & automation.

Cashforce is unique because it offers full transparency into what exactly drives the cash flow of mid-size & large corporates with different complexities such as multi-entity, multi-bank, multi-currency and complex ERP(s). Smart algorithms are applied to generate highly accurate Cash forecasts. The intelligent simulation engine enables companies to consider multiple scenarios and measure their impact. Its intuitive user interface allows for extensive and tailor-made analysis & reporting possibilities. Unlike other enterprise software players, the platform is set up quickly, even in the most complex environments, and connecting seamlessly with any ERP system through its ‘plug-and-play’ connectors. As a result, finance/treasury departments can be turned into business catalysts for cash generation opportunities throughout the company.

“While we started off as a Cash forecasting tool, we have added Advanced Working Capital analytics and Smart Treasury functionalities, and are now operative as a comprehensive modular Treasury Management System (TMS). This makes Cashforce a one-stop-shop for the many analytical and operational practices that benefit Financial and Treasury departments,” says Nicolas Christiaen, CEO of Cashforce. “The endorsement we get from both industry experts and clients progressively confirms that our solution really does bring change into the Treasury market. We now see that potential customers compare the classical TMS providers to Cashforce with Cashforce ending up as the preferred solution! Then you know you’re on the right track. We therefore strive to continue our vision to further integrate and automate to provide our customers with an even more effortless experience.”

“Cashforce has brought a very compelling solution to the corporate Cash management market, which is clearly seen in its results. Since its last financial injection in early 2016, Cashforce has demonstrated a rapid growth, including well over 100% annually recurring revenue growth”, explains Michel Akkermans, the company’s recently appointed chairman.
“With a surge in employees to over 25, an increasing and global interest from the market and partnerships with leading corporate banks, private equity firms & Treasury consultants, Cashforce has been expanding both reach and product. We have heard back from multiple existing customers about their positive experiences with the solution and its impact on their business, and they strongly believe in its trajectory moving forward”.

“Cashforce set foot in the Netherlands this year and has been growing substantially, proving that the company can be scaled up relatively easy,” says Nicolas Christiaen. “This would not be the case without the help of Volta Ventures and Michel Akkermans, who not only provided funding, but also lent their vast strategic experience in our market. The plans for Western-Europe as well as the US are outlined, and this funding round will be valuable to accelerate the international roll-out.”

About Cashforce (www.cashforce.com)
Cashforce is a ‘next-generation’ Cash forecasting & Smart Treasury platform, focused on integration and automation. With its technology, Cashforce is helping Treasury departments from large capital-intensive businesses save time and money by offering cash visibility & pro-active cash saving insights. The platform is easy to use and install, and connects seamlessly with any ERP system. Cashforce is headquartered in Belgium with an office in Amsterdam and New York, serving customers globally such as TomTom, Hyundai and Greenyard among many others worldwide.

About Pamica (www.pamica.be)
Pamica is the investment company of Michel Akkermans.

About Volta Ventures (www.volta.ventures)
Volta Ventures Arkiv invests in young and ambitious internet and software companies in the Benelux. The fund has € 55 million under management and is supported by EIF and ARKimedesFund II.

Press Contact Information
Nicolas Christiaen – [email protected] – +32 479 65 52 95
Michel Akkermans (Pamica NV) – [email protected] – +32 3 202 40 30

 

IT treasury management systems

| 03-11-2017 | Treasurer Development | Minor Treasury @ Hogeschool Utrecht | Frans Boumans |

Today’s blog has been written by Florian de Bruin & Jake Verspeek , who are 2 students studying for the minor Treasury Management at the University of Applied Sciences in Utrecht. We welcome their contribution – it is good to see the youth engaging in Treasury matters! Here is their opinion on IT Treasury management systems.

The complexity of financial control is increasing, but the demand of treasury management to process the right information on time is still there. The treasury management systems enable the treasurer to process the information on time. This involves responding quickly to developments in the money and capital markets and the continuous optimisation of liquidity management and financing. The complexity of the function increases because it is not just about managing and optimising incoming and outgoing cash flows, managing liquidities & investments, and financing of various activities of the company; but also for managing interest rate risks and currency risks. As a result, the Treasury management systems have taken a central role in the overall management of risk in an organisation.

Treasury management systems are available to optimise the treasury management within a company. It is often companies that are diverse, complex and operating internationally that use this IT software. It will therefore not be very common for small businesses with a simple business/structure or a small revenue. The risks and costs of treasury management usually run parallel to these structural features. The features of a treasury management system can be summarized in 10 points:

  • Cash management
  • Payment transactions
  • Foreign currency risks
  • Loans
  • Hedge accounting
  • Derivatives
  • Real- time links
  • Reporting
  • Analysis
  • Risk management

Treasury management maps these processes and manages them. A treasury management system is crucial in supporting such treasury functions in such types of companies.

As seen in the general market for IT, the market for treasury management systems is getting bigger and evolving at the same time. The market for treasury management systems has grown sharply, partly due to the increasing use of IT within companies. Because of the decent use of IT within companies for some while, the level of the market has reached a decent maturity level and the systems functionalities are increasingly expanded and developed. What is of great importance is that these systems have a great security implemented. It is not desirable that unauthorized persons may make any changes to data, such as cash flow of some deals. Such things can have major consequences for the treasury department and the company.

It is a challenge to find the right system that fully complies with the wishes of the treasury department. Creating the perfect match is the biggest challenge. Each system has their own specialty. For example the supplier DiscoverEdge delivers a system that is specialised in Cashflow forecasting, but the supplier Equens SE deliver has a system specialised in Payment management. It is a key factor for making the perfect match that you keep in mind that this match will be for the long term. Also, it is important for a company to ask what do we really desire from the system and what are we going to desire in the near future from the system. In this way you can make a choice that you still will be satisfied with after a couple of years.

At this moment there are no major developments for Treasury management systems. But the IT industry is one of the most innovative industries. So, you never know when there is a new major development for Treasury management systems.

Resources
http://www.treasury.nl/files/2007/10/treasury_239.pdf
http://www.ey.com/Publication/vwLUAssets/EY_-_TMS_Survey_2%C3%9F14/$FILE/EY-TMS-Survey-2014.pdf
https://www.accountant.nl/globalassets/accountant.nl/web-only/0034_bottemanne_14augustus2014.pdf

Minor Treasury Management

More information about the minor Treasury Management at the University of Applied Sciences?
Please contact Frans Boumans.

 

Frans Boumans

Manager Minor Treasury Management @ University of Applied Sciences in Utrecht

 

 

 

Due to the improved economy and other factors we notice a rising interest in the development of the treasurer as a person. Education, competence development and labour market changes are the most obvious topics this concerning. This is why we started the Treasurer Development initiative. 

 

De 100 meest veelbelovende FinTech bedrijven – wie wordt de winnaar?

12-9-2017 | FM.NL | treasuryXL |

Op 27 september is het zover. Buitenlandse investeerders en FinTech-specialisten van naam reizen dan af naar Brussel. Tijdens de European FinTech Awards & Conference 2017 zullen zij oordelen hoe de veelbelovende techbedrijven van Europa ervoor staan. De omgetoverde FinTech-awardzaal van ‘The Egg’ bombardeert  de Europese hoofdstad deze dag tot hét techcentrum van Europa. De top 100 aanstormende FinTech-bedrijven van Europa zijn bekend. Wie wordt gekozen tot winnaar?

Meer dan 34.000 FinTech enthousiastelingen hebben gestemd op hun favoriete Europese FinTech-bedrijf. Het is nu aan de FinTech vakjury: wie winnen de European FinTech Awards 2017? U hoort het op 27 september.
Honderden Europese fintechbedrijven staan op het punt door te breken en uit te groeien tot scale-up. Miljarden liggen klaar om geïnvesteerd te worden in bedrijven die de markten gaan veroveren. Wie wordt de volgende?

De 100 meest veelbelovende FinTech bedrijven

 FM.NL heeft de 100 bedrijven in een artikel gepresenteerd:
 

Bron: FM.NL

Top 3 FinTechs per categorie

 

 

 

 

 

 


Bron: FM.NL

Veelbelovende FinTech-bedrijven & verrassende visies op de European FinTech Awards in Brussel:
Deel expertise en visies. Laat u verrassen tijdens de vele kennissessies, keynotes en pitches. Krijg de beste antwoorden op uw vragen: Hoe schaalt u efficiënt een FinTech-bedrijf op? Wat kunnen we leren van succesvolle FinTechs? Hoe reageren banken en wat denken investeerders?

Laat u inspireren door de meest veelbelovende FinTech-bedrijven ten overstaan van aanwezige investeerders, stakeholders en andere belangstellenden op 27 september 2017.  Dit is de dag waarop u de beste FinTechs van Europa pas écht leert kennen.

Korting via treasuryXL

Bezoek de European FinTech Awards & Conference met korting
Ontmoet 27 september 2017 in ‘The Egg’ in Brussel 400 nationaal en internationaal befaamde FinTech-entrepreneurs, bankiers, investeerders en adviseurs. De European FinTech Awards & Conference 2017 biedt een unieke kans om uw netwerk te vergroten. Laat deze kans niet glippen om gearriveerde FinTech-sprekers op het podium te zien en 30 pitches te zien van Europa’s beste innovatieve ondernemingen van dit moment.

Speciaal als TreasuryXL community lid krijgt u 10% korting met de code: Friend2017, boek vandaag uw ticket(s)

De European FinTech Awards wordt georganiseerd door Alex van Groningen en B Hive. 

Annette Gillhart – Community Manager treasuryXL

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Startup FinTech company Facturis and the traditional bank: How do they do it?

| 23-8-2017 | PowertoPay – Unified Post | Sponsored content |

Facturis, a partner of UnifiedPost, is an online platform that helps to optimize the financial situation of small and medium-sized enterprises in the Netherlands. The platform facilitates a more efficient flow of incoming and outgoing invoices, debtor management, retrieval of digital debit authorizations, dynamic discounting and dynamic working capital credit. In this interview, Nico Ten Wolde, CEO of Facturis, is telling more about developments in the financial technical (FinTech) world.

 

How did Facturis originate from the Rabobank?

Nico: “Rabobank started a strategic orientation in 2010 to increase its added value and uniqueness for its business customers. Rabobank wants to provide services within the customers’ business processes whenever and wherever they are needed. Where Rabobank has traditionally focused on offering products such as transactions, finance and insurance, she wanted to offer services to support the full order-to-cash flow process of her customers. This goes further than the execution of transactions and the provision of funding. By offering different services that work in synergy on one platform, the customer has lower operating costs and a lower need for external financing. In order to achieve this, Rabobank has established a partnership with UnifiedPost in the form of Facturis. UnifiedPost delivers the invoicing platform technology.”

What is the target group of Facturis? What do you do to connect the product to this target group?

Nico: “Facturis focuses on the business market, with the primary focus on small and medium-sized enterprises (SMEs). These types of organizations need to obtain services from many different parties in order to optimize the financial and administrative processes. Because they buy services from different parties, there is insufficient insight into and grip on the overall financial process. By integrally providing services from various partners on one platform, we give entrepreneurs more insight into their financial situation. That goes further than sending invoices – it’s about getting bills paid as quickly as possible.”

Fin Tech initiatives – what changes?

Everyone talks about the changing role of the banks, partly through the FinTech initiatives. What do you think are the things we already notice?

Nico: “What I see is that 10 years ago a bank was the only place you would consider for financial services, this is no longer always the case. Think of FinTech parties like Adyen, which offer a wide range of financial products from banks and other financial institutions on a platform. The customer no longer deals directly with a traditional bank. In addition, we see a strong growth of (crowd) funding platforms. The financing is no longer obtained through a bank. More recently, several blockchain initiatives and the oncoming implementation of PSD2 will create new opportunities for players outside the traditional banking world.”

Why do you think banks will increasingly work with FinTech companies? What is the benefit for the banks?

Nico: “On the one hand, banks often have to deal with complex legacy systems which limit the possibilities to quickly implement new solutions. On the other hand, banks have to deal with implementing and maintaining new rules and regulations with the current processes. This makes it almost impossible to quickly implement innovations. FinTech companies can quickly launch new concepts for specific target groups. Through cooperation with banks, the power of the existing brand and distribution channel is optimally utilized. A win-win situation for the customer, the FinTech company and a bank.”

What was the biggest success in Facturis?

Nico: “The launch of the pilot Invoice Credit. The Invoice Credit is a dynamic working capital credit that moves along in real-time with the (outgoing) invoice flow of a company. As a result, the entrepreneur does not always have to return to his bank to make an adjustment on his credit line. Due to the flexibility of InvoiceCredit, companies can streamline the flow of money, thus optimizing their working capital. InvoiceCredit fulfils the companies need for a credit that reflects fluctuations in the invoice flow and that grows along with the company.”

What is your biggest challenge within Facturis?

Nico: “Our biggest challenge is to maintain the speed you need as a FinTech to be successful and to be able to continue to innovate. Laws, regulations and legacy systems sometimes limit the speed to launch new services quickly within large corporate organizations. In cooperation with large organizations, such as banks, we face the challenge of balancing speed and adopting new banking services.”

How has such a creative thinking startup within the (traditional) bank been adopted so well?

Nico: “On the one hand, with a lot of missionary work within Rabobank in the form of presentations and writing many memo’s to convince the right stakeholders inside and outside the Rabobank. On the other hand, the arrival of Wiebe Draijer (Chairman of the Board of Rabobank) helped us greatly with the adoption of Facturis within the Rabobank. With the establishment of a FinTech & Innovation department, Rabobank made a clear choice for the adoption of FinTech companies in the future.”

What do you think is the most successful FinTech initiative in the market?

Name 1 launched and 1 that has not yet been launched.

Nico: “Launched: Kabbage: Kabbage is an American FinTech that can assess a consumer’s or SME’s financing request within a few minutes.

Not launched: Easytrade, an innovative currency hedging solution for hedging currency risks of (international) companies. Easytrade is a new FinTech initiative created by Rabobank Moonshot Program, an internal acceleration program aimed at realizing the advancing ideas of employees.”

What do you think are the most important FinTech developments in the near future?

Nico: “In the coming years, I see major changes in risk management. Through the application of AI and machine learning, we are able to better estimate risks and utilize opportunities with a much larger predictive ability. This has a positive impact on customers, we can deliver services exactly when the customer needs them. In addition, integrating blockchain initiatives and virtual currencies within the financial sector will take a huge run. With the implementation of PSD2, it is possible for FinTech companies to combine the old world and the new world. This allows for gradual adoption
of these new developments for customers.”

PowertoPay – Unified Post

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Decentralised data capture, centralised data analysis: a case study

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

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

Case study

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

TIPCO Treasury Technology

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

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

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

Hubert Rappold – CEO at TIPCO Treasury & Technology GmbH

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