Posted by Mark Brousseau
Corporate finance and treasury officers' roles have expanded from operational to strategic, a move that has been accelerated by the recession.
Eighty-one percent of senior financial executives say that their job is more strategic than this time last year. Forty-four percent of senior financial executives now have daily contact with the CEO and board.
Finance and treasury's responsibility have grown from managing balance sheets and cash flows to include: improving liquidity, increasing working capital efficiency, enhancing cash forecasting, taking advantage of global opportunities and managing fraud. Automating functions is a more pressing need for finance and treasury departments now that they are taking on more responsibilities.
Many companies are still managing multiple vendors to accept customer's electronic payments, rather than saving time by allowing one vendor to manage all of their electronic payment channels.
Source: Wells Fargo Treasury Trends, April 6, 2010
Showing posts with label cash management. Show all posts
Showing posts with label cash management. Show all posts
Thursday, April 29, 2010
Friday, April 23, 2010
Customer loyalty to banks drops significantly
Posted by Mark Brousseau
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
Tuesday, April 13, 2010
Maximizing RDC Payback
Posted by Mark Brousseau
Not getting the labor savings you expected from your bank's remote deposit capture solution? Wally Vogel, founder and CEO of Creditron, Inc. (wvogel@creditron.com) is not surprised.
"In instances where checks come in and are posted to accounts receivable, scanning the checks for the bank saves a trip to the bank, but does nothing to aid in reducing data entry, balancing, or exception handling," Vogel explains. "These are the time-consuming parts of posting and depositing payments, and they are not addressed by a remote deposit scanner from the bank."
Vogel adds, "What will save significant time is a complete remittance processing solution which can: scan remittance documents and checks, automatically recognize data to reduce key entry, balance the transaction, and perform look-ups and validity checks to handle exceptions quickly. Of course, a complete remittance processing solution also can update the accounts receivable system and deposit items remotely as well, without requiring the user to re-scan or re-key the checks."
The bottom line: the trick to saving time with remote deposit capture is to handle both sides of the transaction with a single automated solution, Vogel says.
What do you think?
Not getting the labor savings you expected from your bank's remote deposit capture solution? Wally Vogel, founder and CEO of Creditron, Inc. (wvogel@creditron.com) is not surprised.
"In instances where checks come in and are posted to accounts receivable, scanning the checks for the bank saves a trip to the bank, but does nothing to aid in reducing data entry, balancing, or exception handling," Vogel explains. "These are the time-consuming parts of posting and depositing payments, and they are not addressed by a remote deposit scanner from the bank."
Vogel adds, "What will save significant time is a complete remittance processing solution which can: scan remittance documents and checks, automatically recognize data to reduce key entry, balance the transaction, and perform look-ups and validity checks to handle exceptions quickly. Of course, a complete remittance processing solution also can update the accounts receivable system and deposit items remotely as well, without requiring the user to re-scan or re-key the checks."
The bottom line: the trick to saving time with remote deposit capture is to handle both sides of the transaction with a single automated solution, Vogel says.
What do you think?
Monday, April 12, 2010
Getting Out of the AP Paper Rut
Posted by Mark Brousseau
Hosted information management solutions may hold the key for helping organizations finally get out of the AP paper rut. R. Edwin Pearce, executive vice president of sales and corporate development for eGistics (epearce@egisticsinc.com) explains:
As a result of the economic downturn, companies are reevaluating their internal operations for opportunities to generate cost savings and unlock hidden value. Nowhere is this value proposition clearer than in accounts payable (AP) processes.
Most enterprises are still employing manual methods of invoice-processing, which has inflated both processing costs and AP cycle times. Seventy-five percent of enterprises are currently mired in a manual and paper-based rut when it comes to managing the initial phase of the AP process, reports Aberdeen Group. Inefficient manual processing can cost $20 or more per invoice, Forrester finds. When you consider that invoice processing typically accounts for more than a third of purchase-to-pay processing costs (Hackett Group), and, similarly, a third of the time of AP personnel is spent in responding to inquiries concerning invoices, it's no wonder that enterprises are focused on cost containment and driving efficiencies in their AP departments.
By reducing their paper handling and manual processing, enterprises also are able to take more early payment discounts and optimize supplier payment strategies.
The Key to Savings
The key to streamlining AP lies in automating the invoice receipt and approval workflow, the initial phase of the AP process, says Aberdeen's Christopher Dwyer.
In a new IAPP study, enterprises cite discrepancy resolution, approval processing, and matching as the activities that cause their AP departments the most "pain."
Workflow technology can relieve all of these challenges. IAPP's study reports that 23 percent of AP departments that have implemented an automated approval workflow say they are "extremely satisfied" with the technology. An additional 37 percent of respondents describe themselves as "satisfied."
Using workflow technology to automate the invoice approval process can provide AP departments with compelling benefits, including: lower operations costs, streamlined processes, reduced AP cycle times, and better quality controls.
The challenge for AP departments is deploying a platform that can bridge their legacy systems, and providing anyone involved in the approval process with real-time access to images and data -- all while ensuring security and tracking.
This is where a hosted information management platform comes in. By combining repository management with workflow capabilities, a hosted information management platform provides:
• the ability to store any paper-based or electronic financial documents, including vendor bills, bank statements, credit card statements, and correspondence
• instant retrieval of any stored document
• compatibility with an enterprise's preferred front-end capture system and ERP system
• notifications when documents are ready for review and/or processing
With a hosted information management platform in place, AP staff no longer has to waste time searching for documents through crammed file cabinets or their e-mail inboxes for third-party inquiries or internal purposes. A hosted platform can accept and securely store feeds from other systems, such as those for electronic invoicing, or from any scanning solution an enterprise might use to capture documents, including distributed desktop scanners or centralized high-speed devices -- all in support of front or back-end AP systems
To process an invoice, AP staff can view a document in their hosted platform and enter the data into the corresponding record in their legacy AP system.
Additionally, unlike traditional licensed, on-premises solutions, a hosted platform doesn't require upfront capital expenditure for hardware and software or annual maintenance fees. And hosted solutions are designed to support approvers across departments or far-flung offices without additional licenses or customization.
IAPP's study found that 9 percent of AP departments plan to implement approval workflow technology in the next year. Hosted information management platforms can help by providing a more effective way of storing, sharing and accessing invoices and other documents -- and getting enterprises out of their paper rut.
What do you think?
Hosted information management solutions may hold the key for helping organizations finally get out of the AP paper rut. R. Edwin Pearce, executive vice president of sales and corporate development for eGistics (epearce@egisticsinc.com) explains:
As a result of the economic downturn, companies are reevaluating their internal operations for opportunities to generate cost savings and unlock hidden value. Nowhere is this value proposition clearer than in accounts payable (AP) processes.
Most enterprises are still employing manual methods of invoice-processing, which has inflated both processing costs and AP cycle times. Seventy-five percent of enterprises are currently mired in a manual and paper-based rut when it comes to managing the initial phase of the AP process, reports Aberdeen Group. Inefficient manual processing can cost $20 or more per invoice, Forrester finds. When you consider that invoice processing typically accounts for more than a third of purchase-to-pay processing costs (Hackett Group), and, similarly, a third of the time of AP personnel is spent in responding to inquiries concerning invoices, it's no wonder that enterprises are focused on cost containment and driving efficiencies in their AP departments.
By reducing their paper handling and manual processing, enterprises also are able to take more early payment discounts and optimize supplier payment strategies.
The Key to Savings
The key to streamlining AP lies in automating the invoice receipt and approval workflow, the initial phase of the AP process, says Aberdeen's Christopher Dwyer.
In a new IAPP study, enterprises cite discrepancy resolution, approval processing, and matching as the activities that cause their AP departments the most "pain."
Workflow technology can relieve all of these challenges. IAPP's study reports that 23 percent of AP departments that have implemented an automated approval workflow say they are "extremely satisfied" with the technology. An additional 37 percent of respondents describe themselves as "satisfied."
Using workflow technology to automate the invoice approval process can provide AP departments with compelling benefits, including: lower operations costs, streamlined processes, reduced AP cycle times, and better quality controls.
The challenge for AP departments is deploying a platform that can bridge their legacy systems, and providing anyone involved in the approval process with real-time access to images and data -- all while ensuring security and tracking.
This is where a hosted information management platform comes in. By combining repository management with workflow capabilities, a hosted information management platform provides:
• the ability to store any paper-based or electronic financial documents, including vendor bills, bank statements, credit card statements, and correspondence
• instant retrieval of any stored document
• compatibility with an enterprise's preferred front-end capture system and ERP system
• notifications when documents are ready for review and/or processing
With a hosted information management platform in place, AP staff no longer has to waste time searching for documents through crammed file cabinets or their e-mail inboxes for third-party inquiries or internal purposes. A hosted platform can accept and securely store feeds from other systems, such as those for electronic invoicing, or from any scanning solution an enterprise might use to capture documents, including distributed desktop scanners or centralized high-speed devices -- all in support of front or back-end AP systems
To process an invoice, AP staff can view a document in their hosted platform and enter the data into the corresponding record in their legacy AP system.
Additionally, unlike traditional licensed, on-premises solutions, a hosted platform doesn't require upfront capital expenditure for hardware and software or annual maintenance fees. And hosted solutions are designed to support approvers across departments or far-flung offices without additional licenses or customization.
IAPP's study found that 9 percent of AP departments plan to implement approval workflow technology in the next year. Hosted information management platforms can help by providing a more effective way of storing, sharing and accessing invoices and other documents -- and getting enterprises out of their paper rut.
What do you think?
Sunday, April 11, 2010
How AP Trends Impact AR
Posted by Mark Brousseau
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
Wednesday, October 7, 2009
News from the AFP Conference: Tuesday
Posted by Mark Brousseau
Bottomline Enhances Global Cash Management Platform
Today at the AFP Annual Conference in San Francisco, Bottomline Technologies announced new functionality for its WebSeries Global Cash Management platform, enabling banks to leverage industry standard messages for faster, more efficient cash reporting.
Through these new cash reporting capabilities, banks can send account statements and advices to corporate clients and correspondent banks. As the demand for real-time reporting among corporates and financial institutions continues to increase, WebSeries’ new functionality, which includes Nostro reporting, allows bank admin users to quickly and easily configure clients to receive statements and advices as needs and business requirements evolve.
“By leveraging industry standard messages, banks can quickly overcome many of the difficulties associated with efficient cash reporting. These new reporting capabilities are another example of Bottomline’s continuing commitment to helping banking customers support the needs of corporate clients through innovative features and functionality,” said Eric Campbell, Chief Technology Officer of Bottomline Technologies.
Bottomline Enhances Global Cash Management Platform
Today at the AFP Annual Conference in San Francisco, Bottomline Technologies announced new functionality for its WebSeries Global Cash Management platform, enabling banks to leverage industry standard messages for faster, more efficient cash reporting.
Through these new cash reporting capabilities, banks can send account statements and advices to corporate clients and correspondent banks. As the demand for real-time reporting among corporates and financial institutions continues to increase, WebSeries’ new functionality, which includes Nostro reporting, allows bank admin users to quickly and easily configure clients to receive statements and advices as needs and business requirements evolve.
“By leveraging industry standard messages, banks can quickly overcome many of the difficulties associated with efficient cash reporting. These new reporting capabilities are another example of Bottomline’s continuing commitment to helping banking customers support the needs of corporate clients through innovative features and functionality,” said Eric Campbell, Chief Technology Officer of Bottomline Technologies.
Corporate Treasuries Not Prepared for Unexpected Market Events
Posted by Mark Brousseau
At the AFP Conference in San Francisco today, Wall Street Systems (Wallstreet) released the survey findings of 46 of the leading US-headquartered Fortune 500 multinational corporate treasuries.
The top concerns were Counterparty Risk, 87% of respondents, and Cash Flow Forecasting with 28%. Startlingly, nearly 90% of corporate treasuries reported they still use manual processes such as spreadsheets to manage counterparty risk and cash flow forecasting. This means they are without the real-time view and information needed in uncertain environments. In the wake of the recent market collapse, manual processes are no longer acceptable for corporate treasury functions, according to survey respondents.
To further exacerbate the problem, Treasurers have traditionally relied on the credit rating agencies to provide their only measure of credit risk. Without question they can no longer rely on ratings as the only determinate of risk, and as a consequence they have cut their more risky exposures and moved to specific counterparties the government would view as ‘too big to fail’.
Treasurers are now in need of other tools to help them view and manage their counterparty exposure and ensure the group’s liquidity across the organisation, such as an integrated treasury management system – providing a real time view of exposure and liquidity on demand.
Mark Lewis, Director, Corporate Treasury, Wall Street Systems said: "Today the cost of making an investment in real time treasury technology, does not compare with the size of a possible loss caused by a failed counterparty. The opportunity to unwind the exposure prior to the failure could save the company millions, and is an essential point for proving the business case to the board."
The survey reveals that the once-accepted practice of spreadsheet management and other manual methods is no longer sufficient in today’s marketplace. Where treasury technology was once the provenance of mere cost savings, it is now required to provide an early warning system in the event of a market event and address shareholder demand and protect against large-scale failure.
At the AFP Conference in San Francisco today, Wall Street Systems (Wallstreet) released the survey findings of 46 of the leading US-headquartered Fortune 500 multinational corporate treasuries.
The top concerns were Counterparty Risk, 87% of respondents, and Cash Flow Forecasting with 28%. Startlingly, nearly 90% of corporate treasuries reported they still use manual processes such as spreadsheets to manage counterparty risk and cash flow forecasting. This means they are without the real-time view and information needed in uncertain environments. In the wake of the recent market collapse, manual processes are no longer acceptable for corporate treasury functions, according to survey respondents.
To further exacerbate the problem, Treasurers have traditionally relied on the credit rating agencies to provide their only measure of credit risk. Without question they can no longer rely on ratings as the only determinate of risk, and as a consequence they have cut their more risky exposures and moved to specific counterparties the government would view as ‘too big to fail’.
Treasurers are now in need of other tools to help them view and manage their counterparty exposure and ensure the group’s liquidity across the organisation, such as an integrated treasury management system – providing a real time view of exposure and liquidity on demand.
Mark Lewis, Director, Corporate Treasury, Wall Street Systems said: "Today the cost of making an investment in real time treasury technology, does not compare with the size of a possible loss caused by a failed counterparty. The opportunity to unwind the exposure prior to the failure could save the company millions, and is an essential point for proving the business case to the board."
The survey reveals that the once-accepted practice of spreadsheet management and other manual methods is no longer sufficient in today’s marketplace. Where treasury technology was once the provenance of mere cost savings, it is now required to provide an early warning system in the event of a market event and address shareholder demand and protect against large-scale failure.
CFOs and Treasurers Maintain Recessionary View
Posted by Mark Brousseau
Even as the U.S. economy has exhibited signs of stability in recent months, financial professionals have not seen solid evidence that business conditions have turned the corner.
The vast majority of attendees to the annual conference of the Association for Financial Professionals (AFP) believe the U.S. economy remains in a recession, despite indications of economic growth in the third quarter. Their uncertain outlook for near-term business conditions parallels expectations that their organizations will not resume hiring or capital spending, which they had halted over the past year, according to an on-site survey conducted yesterday.
Just 11 percent of responding conference attendees -- which include CFOs, treasurers and other treasury and finance executives representing companies of a median size of $1.5 billion in annual revenues -- believe that the U.S. economy is out of the recession. The outlook for the near-term is not much more optimistic. Just 20 percent of survey respondents believe the recession will end before of the year while 69 percent expect the recession will continue well into 2010.
"AFP members have played a critical role in maintaining the financial stability of their organizations through the recession," said Jim Kaitz, president and CEO of AFP. "As we look ahead, AFP will continue to work with policymakers to ensure that financial regulatory reform is balanced and represents the needs of financial professionals. We are confident that responsible regulation will foster stable and secure financial markets."
Asked whether their organizations would be apt to increase or decrease payrolls in the next six months, nearly two-thirds of financial professionals say they expect to maintain payrolls at current levels. Of those responding, 22 percent expect company payrolls to shrink further while just 14 percent anticipate that their organization will resume hiring over the next six months.
Similarly, the overwhelming majority of survey respondents expect to either maintain or further cut capital spending over the next six months. Just 21 percent of financial professionals anticipate their organization will increase capital spending in the coming months.
As employment and capital spending have stabilized, so has their companies' access to capital. More than half of respondents indicate that their organizations' access to capital stabilized over the past six months. Further, the area where capital access may have improved is among companies that have utilized the debt markets -- 31 percent of organizations have had improved access to debt markets over the past six months. Access to banking lending has improved for 22 percent of respondents while a similar percentage report improvements in raising capital in the equity markets.
When asked about the greatest risk to their organization's ability to prosper in 2010, financial professionals were most likely to identify one of two threats: failure of consumer demand to materialize (30 percent) and the possibility of a double dip recession (28 percent). Consistent with the reported stability in capital markets above, only 12 percent of survey respondents see a loss of access to capital as the greatest risk to their organization.
Even as the U.S. economy has exhibited signs of stability in recent months, financial professionals have not seen solid evidence that business conditions have turned the corner.
The vast majority of attendees to the annual conference of the Association for Financial Professionals (AFP) believe the U.S. economy remains in a recession, despite indications of economic growth in the third quarter. Their uncertain outlook for near-term business conditions parallels expectations that their organizations will not resume hiring or capital spending, which they had halted over the past year, according to an on-site survey conducted yesterday.
Just 11 percent of responding conference attendees -- which include CFOs, treasurers and other treasury and finance executives representing companies of a median size of $1.5 billion in annual revenues -- believe that the U.S. economy is out of the recession. The outlook for the near-term is not much more optimistic. Just 20 percent of survey respondents believe the recession will end before of the year while 69 percent expect the recession will continue well into 2010.
"AFP members have played a critical role in maintaining the financial stability of their organizations through the recession," said Jim Kaitz, president and CEO of AFP. "As we look ahead, AFP will continue to work with policymakers to ensure that financial regulatory reform is balanced and represents the needs of financial professionals. We are confident that responsible regulation will foster stable and secure financial markets."
Asked whether their organizations would be apt to increase or decrease payrolls in the next six months, nearly two-thirds of financial professionals say they expect to maintain payrolls at current levels. Of those responding, 22 percent expect company payrolls to shrink further while just 14 percent anticipate that their organization will resume hiring over the next six months.
Similarly, the overwhelming majority of survey respondents expect to either maintain or further cut capital spending over the next six months. Just 21 percent of financial professionals anticipate their organization will increase capital spending in the coming months.
As employment and capital spending have stabilized, so has their companies' access to capital. More than half of respondents indicate that their organizations' access to capital stabilized over the past six months. Further, the area where capital access may have improved is among companies that have utilized the debt markets -- 31 percent of organizations have had improved access to debt markets over the past six months. Access to banking lending has improved for 22 percent of respondents while a similar percentage report improvements in raising capital in the equity markets.
When asked about the greatest risk to their organization's ability to prosper in 2010, financial professionals were most likely to identify one of two threats: failure of consumer demand to materialize (30 percent) and the possibility of a double dip recession (28 percent). Consistent with the reported stability in capital markets above, only 12 percent of survey respondents see a loss of access to capital as the greatest risk to their organization.
Monday, October 5, 2009
News from the AFP Conference: Monday
Posted by Mark Brousseau
Garda Cash Logistics Offers “Virtual Vaults”
At the AFP Annual Conference in San Francisco today, Garda Cash Logistics announced it is partnering with Bluepoint Solutions to deliver image-based cash vault processing, including image capture and image exchange of deposits and payments.
“With the advent of Check 21, we realized we could offer our clients a cost-effective solution to help expand their footprints and reduce costs,” said Patricia Marr, Vice President of Product Management at Garda. “By expanding our existing vault services to include image-based cash logistic services, our clients can effectively capture and exchange images received through Garda’s vault network, significantly accelerating deposit capture, posting and presentment. Working with Bluepoint, vaults can now be accessed electronically.”
Working with Bluepoint, Garda’s virtual vaults have the capability to immediately scan, process and balance mixed deposits of both cash and check documents. In addition to check processing, Bluepoint supports the image capture of paper tickets used to issue credit for cash deposits or cash adjustments, giving Garda the ability to provide direct billing data to banks. Garda’s centralized deposit balancing process captures, truncates, balances and adjusts check deposits for each of its customers. Check images are then formatted as X9.37 files for posting or bank-to-bank image exchange. Managed in an ASP environment, Bluepoint manages and corrects any exceptions to immediately adjust and balance the received deposit. Within the vault checks are scanned and the images are sent to Bluepoint’s centralized server where items are repaired if needed and then immediately balanced. The consolidation of the check processing in an ASP environment enables highly trained personnel to manage this functionality – enabling the vaults to stay in balance.
“In today’s uncertain financial environment, a bank cannot afford to lose sight of its core competencies – growing its deposit base and improving customer service,” said Hal Tilbury, president and CEO of Bluepoint Solutions. “Garda’s image-based virtual vault solution enables financial institutions to increase funds availability, expand geographically and more accurately manage deposits – all without adding additional resources. Specifically, this service helps banks attract and better serve commercial customers.”
US Dataworks Showcases Enterprise Payments Platform
US Dataworks is showcasing its enterprise payments platform, Clearingworks, this week at the AFP Annual Conference.
By using Clearingworks to automate multi-channel transaction processing and clearing, US Dataworks says organizations can significantly improve operational efficiency, reduce cost and more effectively manage converging paper-based and electronic payments processes -- all key requirements in our challenging economy.
Visitors to the US Dataworks expo booth (No. 314) can meet company representatives and see an overview of Clearingworks, including its components for ACH, WEB, Tel and remittance processing, check processing, payments decisioning, and returns management.
"US Dataworks' enterprise payments platform is flexible, enables continuous change and provides financial institutions and service bureaus with the infrastructure to better manage their entire transaction environment," commented US Dataworks President and COO Mario Villarreal. "Banks and billers currently face tremendous pressures to upgrade their payments platforms to handle the ever-expanding variety of emerging payment channels, all under limited budgets. The good news is that Clearingworks is a proven solution to simplify complex payment collections processing and reduce costs."
"US Dataworks is uniquely positioned to help banks, billers and service providers reduce payments processing and clearing costs and improve operational efficiency," said Villarreal. "No other company has the full range of capabilities that banks and billers need to streamline the entire transaction lifecycle, including payments processing, check processing, payments, remote deposit capture, payments decisioning and routing, and returns management."
3i Infotech, Regulus and J&B Showcase Revenue Chain Solutions
3i Infotech, Regulus Group and J&B Software are demonstrating how to uncover total cost of ownership savings within the corporate revenue chain at the AFP Annual Conference in San Francisco this week. The companies are exhibiting their billing, remittance processing, imaging, remote capture, electronic deposit and other products and services at the show.
By taking a consultative approach to evaluating a company’s cash collection processes, 3i Infotech says its companies not only uncover areas of inefficiency and cost savings, but deliver solutions for all parts of the entire revenue chain, whether the need is for outsourced, in-house, hybrid or managed solutions. And since these solutions come from a single vendor, management is simplified and management expenses are greatly reduced, 3i Infotech says.
“Because of the importance of the revenue cycle process to an organization, many companies become so focused on their day-to-day treasury operations that they often miss the savings opportunities in front of them,” said Kathy Hamburger, CEO and president of 3i Infotech, North America. “3i Infotech delivers a full suite of revenue chain solutions, not just one or two pieces, so we understand that the impact of the end-to-end revenue chain extends well beyond the treasury department to include finance, marketing, customer service and more. We help companies find ways to improve processes and reduce total cost of ownership from the production floor to the executive suite.”
Garda Cash Logistics Offers “Virtual Vaults”
At the AFP Annual Conference in San Francisco today, Garda Cash Logistics announced it is partnering with Bluepoint Solutions to deliver image-based cash vault processing, including image capture and image exchange of deposits and payments.
“With the advent of Check 21, we realized we could offer our clients a cost-effective solution to help expand their footprints and reduce costs,” said Patricia Marr, Vice President of Product Management at Garda. “By expanding our existing vault services to include image-based cash logistic services, our clients can effectively capture and exchange images received through Garda’s vault network, significantly accelerating deposit capture, posting and presentment. Working with Bluepoint, vaults can now be accessed electronically.”
Working with Bluepoint, Garda’s virtual vaults have the capability to immediately scan, process and balance mixed deposits of both cash and check documents. In addition to check processing, Bluepoint supports the image capture of paper tickets used to issue credit for cash deposits or cash adjustments, giving Garda the ability to provide direct billing data to banks. Garda’s centralized deposit balancing process captures, truncates, balances and adjusts check deposits for each of its customers. Check images are then formatted as X9.37 files for posting or bank-to-bank image exchange. Managed in an ASP environment, Bluepoint manages and corrects any exceptions to immediately adjust and balance the received deposit. Within the vault checks are scanned and the images are sent to Bluepoint’s centralized server where items are repaired if needed and then immediately balanced. The consolidation of the check processing in an ASP environment enables highly trained personnel to manage this functionality – enabling the vaults to stay in balance.
“In today’s uncertain financial environment, a bank cannot afford to lose sight of its core competencies – growing its deposit base and improving customer service,” said Hal Tilbury, president and CEO of Bluepoint Solutions. “Garda’s image-based virtual vault solution enables financial institutions to increase funds availability, expand geographically and more accurately manage deposits – all without adding additional resources. Specifically, this service helps banks attract and better serve commercial customers.”
US Dataworks Showcases Enterprise Payments Platform
US Dataworks is showcasing its enterprise payments platform, Clearingworks, this week at the AFP Annual Conference.
By using Clearingworks to automate multi-channel transaction processing and clearing, US Dataworks says organizations can significantly improve operational efficiency, reduce cost and more effectively manage converging paper-based and electronic payments processes -- all key requirements in our challenging economy.
Visitors to the US Dataworks expo booth (No. 314) can meet company representatives and see an overview of Clearingworks, including its components for ACH, WEB, Tel and remittance processing, check processing, payments decisioning, and returns management.
"US Dataworks' enterprise payments platform is flexible, enables continuous change and provides financial institutions and service bureaus with the infrastructure to better manage their entire transaction environment," commented US Dataworks President and COO Mario Villarreal. "Banks and billers currently face tremendous pressures to upgrade their payments platforms to handle the ever-expanding variety of emerging payment channels, all under limited budgets. The good news is that Clearingworks is a proven solution to simplify complex payment collections processing and reduce costs."
"US Dataworks is uniquely positioned to help banks, billers and service providers reduce payments processing and clearing costs and improve operational efficiency," said Villarreal. "No other company has the full range of capabilities that banks and billers need to streamline the entire transaction lifecycle, including payments processing, check processing, payments, remote deposit capture, payments decisioning and routing, and returns management."
3i Infotech, Regulus and J&B Showcase Revenue Chain Solutions
3i Infotech, Regulus Group and J&B Software are demonstrating how to uncover total cost of ownership savings within the corporate revenue chain at the AFP Annual Conference in San Francisco this week. The companies are exhibiting their billing, remittance processing, imaging, remote capture, electronic deposit and other products and services at the show.
By taking a consultative approach to evaluating a company’s cash collection processes, 3i Infotech says its companies not only uncover areas of inefficiency and cost savings, but deliver solutions for all parts of the entire revenue chain, whether the need is for outsourced, in-house, hybrid or managed solutions. And since these solutions come from a single vendor, management is simplified and management expenses are greatly reduced, 3i Infotech says.
“Because of the importance of the revenue cycle process to an organization, many companies become so focused on their day-to-day treasury operations that they often miss the savings opportunities in front of them,” said Kathy Hamburger, CEO and president of 3i Infotech, North America. “3i Infotech delivers a full suite of revenue chain solutions, not just one or two pieces, so we understand that the impact of the end-to-end revenue chain extends well beyond the treasury department to include finance, marketing, customer service and more. We help companies find ways to improve processes and reduce total cost of ownership from the production floor to the executive suite.”
Tuesday, September 8, 2009
What Banks Do Best
Posted by Mark Brousseau
Forty-two percent of treasurers responding to Treasury & Risk's 2009 Cash Management Survey say their bank's best attribute is providing online access to information. Ninety-six percent of treasurers who responded to the survey say they are satisfied with the online services provided by their primary domestic bank.
A whopping 90 percent of respondents to the survey handle more than half of their cash management operations online, the survey found. Interestingly, just 33 percent of treasurers say they use a treasury workstation -- meaning most treasurers are using the Internet for their cash management.
What do you think? Post your comment below.
Forty-two percent of treasurers responding to Treasury & Risk's 2009 Cash Management Survey say their bank's best attribute is providing online access to information. Ninety-six percent of treasurers who responded to the survey say they are satisfied with the online services provided by their primary domestic bank.
A whopping 90 percent of respondents to the survey handle more than half of their cash management operations online, the survey found. Interestingly, just 33 percent of treasurers say they use a treasury workstation -- meaning most treasurers are using the Internet for their cash management.
What do you think? Post your comment below.
The Surge in Interest for Remote Cash Capture
Posted by Mark Brousseau
Remote Cash Capture (RCC), the deployment of secure smart safes at merchant locations coupled with information reporting and provisional credit mechanisms, has been utilized in the United States for nearly 15 years as a means of improving merchant cash cycle control. Since 2004, when banks began offering provisional credit based on validated currency residing at the merchant location, the industry has witnessed a surge in interest and adoption of these devices.
The research paper “Remote Cash Capture—An Idea Whose Time Has Come,” authored and published by the international research and consulting firm Celent, thoroughly addresses this surge in RCC popularity with extensive research into remote cash capture demand, adoption, management, merchant cash logistics and potential benefits for both institutions and merchants.
According to the paper, the primary benefit of RCC provisional credit is that it facilitates wholesale reengineering of the cash cycle within merchants and between merchants, armored couriers and bank cash vault networks. RCC removes the substantial burden of cash handling typically carried by bank branch personnel historically, largely without the assistance of meaningful automation. In short, the paper states that RCC is a win-win-win wherever the merchant business case warrants.
RCC adoption however, has been slowed by both economic and systemic barriers. Armored courier systems are proprietary, meaning safes and information systems from different couriers do not communicate. This complicates adoption from interested financial institutions, which must invest in systems integration file validation and testing efforts just to participate. In addition, RCC is expensive, as both hardware and processing fees can make the solution unaffordable for a large number of otherwise interested merchants.
Celent predicts that economies of scale could eventually make the technology more affordable. For the foreseeable future, however, RCC will continue to appeal to a minority of merchants and be supported by a minority of midsized to large U.S. banks. As self-service applications continue to proliferate, banks will seek to participate with same-day provisional credit as is now being done with cash acceptor safes. Taking the form of self-service retail checkout and bill payment kiosks, these devices will further extend the reach of closed-loop cash cycle automation systems.
Hoping to take advntage of remote cash capture trends, Fiserv provides an integrated set of software solutions and industry-leading expertise to address the cash management challenges facing financial institutions, retailers and key service providers for these organizations.
CorPoint from Fiserv delivers cash order and deposit management with comprehensive tracking and service level management, all with a focus on expedited credit to retail customer accounts. Corpoint is designed to allow the bank to allow its corporate/retail customers to order and track cash orders and deposits via a bank-branded web portal or IVRU. This brings back the relationship that is sometimes disintermediated by the customer’s armored courier.
As a part of the Cash and Logistics suite from Fiserv, CorPoint:
... Supports any organization that accepts cash deposits from its customer base
... Supports any cash deposit mechanism including manual deposits or self-service cash devices such as Retail Recyclers
... Tracks retail customer deposits from source to destination
... Facilitates expedited customer deposit credit and deposit adjustments with single deposit process and data flow
... Eliminates geographic obstacles as banks pursue new deposit business outside of the current footprint
iCom from Fiserv offers cash supply chain management addressing cash requirements across the organization. iCom helps organizations achieve minimized cash holdings and reduced transportation expenses, with maximized availability of cash for customers.
As the cornerstone solution in the Cash and Logistics suite, iCom:
... Supports any organization with a cash supply chain, including financial institutions, retail organizations, ISOs and armored car couriers
... Supports any cash-point type: ATMs, branches, stores, vaults, third-party cash storage facilities and self-service cash devices
... Combines complex forecasting functionality with historical trends and known events to optimize cash holdings for the unique demands of each cash point
... Delivers accuracy in forecasting that allows organizations to optimize cash levels to avoid cash outages and eliminates excess cash holdings
... Enables management from one to thousands of cash-points supporting future additions obtained through mergers, acquisitions or organic growth
How is your organization handling remote cash capture? Post your comment below.
Remote Cash Capture (RCC), the deployment of secure smart safes at merchant locations coupled with information reporting and provisional credit mechanisms, has been utilized in the United States for nearly 15 years as a means of improving merchant cash cycle control. Since 2004, when banks began offering provisional credit based on validated currency residing at the merchant location, the industry has witnessed a surge in interest and adoption of these devices.
The research paper “Remote Cash Capture—An Idea Whose Time Has Come,” authored and published by the international research and consulting firm Celent, thoroughly addresses this surge in RCC popularity with extensive research into remote cash capture demand, adoption, management, merchant cash logistics and potential benefits for both institutions and merchants.
According to the paper, the primary benefit of RCC provisional credit is that it facilitates wholesale reengineering of the cash cycle within merchants and between merchants, armored couriers and bank cash vault networks. RCC removes the substantial burden of cash handling typically carried by bank branch personnel historically, largely without the assistance of meaningful automation. In short, the paper states that RCC is a win-win-win wherever the merchant business case warrants.
RCC adoption however, has been slowed by both economic and systemic barriers. Armored courier systems are proprietary, meaning safes and information systems from different couriers do not communicate. This complicates adoption from interested financial institutions, which must invest in systems integration file validation and testing efforts just to participate. In addition, RCC is expensive, as both hardware and processing fees can make the solution unaffordable for a large number of otherwise interested merchants.
Celent predicts that economies of scale could eventually make the technology more affordable. For the foreseeable future, however, RCC will continue to appeal to a minority of merchants and be supported by a minority of midsized to large U.S. banks. As self-service applications continue to proliferate, banks will seek to participate with same-day provisional credit as is now being done with cash acceptor safes. Taking the form of self-service retail checkout and bill payment kiosks, these devices will further extend the reach of closed-loop cash cycle automation systems.
Hoping to take advntage of remote cash capture trends, Fiserv provides an integrated set of software solutions and industry-leading expertise to address the cash management challenges facing financial institutions, retailers and key service providers for these organizations.
CorPoint from Fiserv delivers cash order and deposit management with comprehensive tracking and service level management, all with a focus on expedited credit to retail customer accounts. Corpoint is designed to allow the bank to allow its corporate/retail customers to order and track cash orders and deposits via a bank-branded web portal or IVRU. This brings back the relationship that is sometimes disintermediated by the customer’s armored courier.
As a part of the Cash and Logistics suite from Fiserv, CorPoint:
... Supports any organization that accepts cash deposits from its customer base
... Supports any cash deposit mechanism including manual deposits or self-service cash devices such as Retail Recyclers
... Tracks retail customer deposits from source to destination
... Facilitates expedited customer deposit credit and deposit adjustments with single deposit process and data flow
... Eliminates geographic obstacles as banks pursue new deposit business outside of the current footprint
iCom from Fiserv offers cash supply chain management addressing cash requirements across the organization. iCom helps organizations achieve minimized cash holdings and reduced transportation expenses, with maximized availability of cash for customers.
As the cornerstone solution in the Cash and Logistics suite, iCom:
... Supports any organization with a cash supply chain, including financial institutions, retail organizations, ISOs and armored car couriers
... Supports any cash-point type: ATMs, branches, stores, vaults, third-party cash storage facilities and self-service cash devices
... Combines complex forecasting functionality with historical trends and known events to optimize cash holdings for the unique demands of each cash point
... Delivers accuracy in forecasting that allows organizations to optimize cash levels to avoid cash outages and eliminates excess cash holdings
... Enables management from one to thousands of cash-points supporting future additions obtained through mergers, acquisitions or organic growth
How is your organization handling remote cash capture? Post your comment below.
Tuesday, February 3, 2009
The Economic Upside
By Mark Brousseau
The current economic downturn has created a renewed focus on cash, and prudent cash management. And like any other economic situation, this trend has a downside and an upside when it comes to solutions sales in the payments space, says Wally Vogel, president of Toronto-based Purepay Receivables Automation (wvogel@pure-pay.com).
“We have seen mixed results in our customer base as a result of the new reality,” Vogel told me.
“One the downside, uncertainty is delaying projects and purchases,” Vogel said. “These deals are not dead by any means, but they are not moving ahead either.” Vogel calls this ‘purchase paralysis.’ “The delays we are seeing now are moving out sales that we have spent months developing. It is frustrating to have them stall as they near the finish line.”
Not only does this stymie payments solutions providers like Purepay, it also frustrates the organizations that can’t do anything but maintain the status quo, Vogel noted.
But there is an upside to the current economic situation. Vogel says Purepay is seeing some of its clients take advantage of the current environment to improve their technology infrastructure and gain a competitive advantage over their more conservative peers. “These clients are reducing costs, expanding their service offerings, and winning business,” he said.
“With the primary goal of prudent cash management, automating and enhancing the payment processing technology platform, and expanding rather than contracting business, is an effective way to achieve positive results,” Vogel said. “Organizations that invest in their payments infrastructure now are on an upward vector and will grow and thrive, despite the economy.”
As for the rest of 2009, Vogel expects to see even more of a stratification of the winners and losers in the payments space, and an increased focus by users on offerings that deliver immediate benefits. “Any investment of capital will be, and should be scrutinized to ensure that there is a solid business case, clear costs savings, and that it creates a competitive advantage,” Vogel said.
What do you think? Post your comment below.
The current economic downturn has created a renewed focus on cash, and prudent cash management. And like any other economic situation, this trend has a downside and an upside when it comes to solutions sales in the payments space, says Wally Vogel, president of Toronto-based Purepay Receivables Automation (wvogel@pure-pay.com).
“We have seen mixed results in our customer base as a result of the new reality,” Vogel told me.
“One the downside, uncertainty is delaying projects and purchases,” Vogel said. “These deals are not dead by any means, but they are not moving ahead either.” Vogel calls this ‘purchase paralysis.’ “The delays we are seeing now are moving out sales that we have spent months developing. It is frustrating to have them stall as they near the finish line.”
Not only does this stymie payments solutions providers like Purepay, it also frustrates the organizations that can’t do anything but maintain the status quo, Vogel noted.
But there is an upside to the current economic situation. Vogel says Purepay is seeing some of its clients take advantage of the current environment to improve their technology infrastructure and gain a competitive advantage over their more conservative peers. “These clients are reducing costs, expanding their service offerings, and winning business,” he said.
“With the primary goal of prudent cash management, automating and enhancing the payment processing technology platform, and expanding rather than contracting business, is an effective way to achieve positive results,” Vogel said. “Organizations that invest in their payments infrastructure now are on an upward vector and will grow and thrive, despite the economy.”
As for the rest of 2009, Vogel expects to see even more of a stratification of the winners and losers in the payments space, and an increased focus by users on offerings that deliver immediate benefits. “Any investment of capital will be, and should be scrutinized to ensure that there is a solid business case, clear costs savings, and that it creates a competitive advantage,” Vogel said.
What do you think? Post your comment below.
Thursday, January 8, 2009
Finance Executives Refocus Attention
By Mark Brousseau
The economic downturn has forced finance executives to refocus their attention on wringing cash from their business, looking beyond conventional improvements in working capital management, and making sure no opportunity for keeping their company well funded goes unexplored. That's according to a research report conducted in November 2008 by American Express and CFO Research Services.
Finance teams have prioritized spending more time on the following activities:
85 percent - Cutting cost of operations
83 percent - Improving cash management processes
81 percent - Developing better budgets, plans and forecasts
When asked about growth strategies in the face of a challenging credit market, nearly three-quarters of executives who responded to the question say they will pay more attention to the customer:
... Organic growth through improved customer relations
... Continued customer contact and service
... Focus on our core business, leveraging existing relationships
What is your perspective? Post a comment below.
The economic downturn has forced finance executives to refocus their attention on wringing cash from their business, looking beyond conventional improvements in working capital management, and making sure no opportunity for keeping their company well funded goes unexplored. That's according to a research report conducted in November 2008 by American Express and CFO Research Services.
Finance teams have prioritized spending more time on the following activities:
85 percent - Cutting cost of operations
83 percent - Improving cash management processes
81 percent - Developing better budgets, plans and forecasts
When asked about growth strategies in the face of a challenging credit market, nearly three-quarters of executives who responded to the question say they will pay more attention to the customer:
... Organic growth through improved customer relations
... Continued customer contact and service
... Focus on our core business, leveraging existing relationships
What is your perspective? Post a comment below.
Friday, January 2, 2009
Wanted: Cash Forecasting Technology
By Mark Brousseau
Senior financial executives say cash flow forecasting is the top area where better technology and/or more outsourcing is needed, according to Treasury & Risk's 2009 Strategic Treasury Survey. Thirty-six percent of respondents cited solutions as lacking in cash flow forecasting. Other areas seen as wanting: accounts payable (cited by 16 percent of respondents), accounts receivable (14 percent), budgeting and planning (13 percent), and cash management (13 percent).
What do you think? Post your comment below.
Senior financial executives say cash flow forecasting is the top area where better technology and/or more outsourcing is needed, according to Treasury & Risk's 2009 Strategic Treasury Survey. Thirty-six percent of respondents cited solutions as lacking in cash flow forecasting. Other areas seen as wanting: accounts payable (cited by 16 percent of respondents), accounts receivable (14 percent), budgeting and planning (13 percent), and cash management (13 percent).
What do you think? Post your comment below.
Tuesday, September 30, 2008
The Credit Crisis and Cash Management
By Mark Brousseau
As a result of the unfolding credit crisis, the use of purchasing cards and travel and entertainment (T&E) cards may soar as companies look to take advantage of float, buyer discounts and reductions in accounts payable staff available for posting and payments. That’s according to Ed Bachelder (ebachelder@hitachiconsulting.com) of Boston-based Hitachi Consulting (formerly Dove Consulting, a division of Hitachi Consulting).
“The goal will be for companies to conserve their cash and help treasury management minimize their need for credit,” Bachelder told me. “The cost of capital for many businesses will double if the Washington D.C. bailout does not work.”
Bachelder also believes that inflation could also be on the rise again if the bailout does not work and the dollar weakens. “This looks a lot like 1978-82, with the specter of stagflation, and double-digit inflation and interest rates,” Bachelder said. “That was the era when complex treasury and cash management functions rose to prominence in most companies.”
Many companies will also look for ways to reduce costs as a result of the credit crisis, Bachelder said. For instance, some companies will leverage self-service and automated technologies. “Look for more promotion of Internet bill payment, and less ‘live representative’ interaction,” he said. “Billers will jump on the pay-it-green bandwagon and get serious about online bill presentment, seeking payment via ACH debits (pull) and credits (push).”
Bachelder also believes that outsourcing will continue to grow as companies pare back to their core competencies. “More firms may decide that running an in-house lockbox may not be part of the picture,” he explained. What do you think? Post your comments below.
As a result of the unfolding credit crisis, the use of purchasing cards and travel and entertainment (T&E) cards may soar as companies look to take advantage of float, buyer discounts and reductions in accounts payable staff available for posting and payments. That’s according to Ed Bachelder (ebachelder@hitachiconsulting.com) of Boston-based Hitachi Consulting (formerly Dove Consulting, a division of Hitachi Consulting).
“The goal will be for companies to conserve their cash and help treasury management minimize their need for credit,” Bachelder told me. “The cost of capital for many businesses will double if the Washington D.C. bailout does not work.”
Bachelder also believes that inflation could also be on the rise again if the bailout does not work and the dollar weakens. “This looks a lot like 1978-82, with the specter of stagflation, and double-digit inflation and interest rates,” Bachelder said. “That was the era when complex treasury and cash management functions rose to prominence in most companies.”
Many companies will also look for ways to reduce costs as a result of the credit crisis, Bachelder said. For instance, some companies will leverage self-service and automated technologies. “Look for more promotion of Internet bill payment, and less ‘live representative’ interaction,” he said. “Billers will jump on the pay-it-green bandwagon and get serious about online bill presentment, seeking payment via ACH debits (pull) and credits (push).”
Bachelder also believes that outsourcing will continue to grow as companies pare back to their core competencies. “More firms may decide that running an in-house lockbox may not be part of the picture,” he explained. What do you think? Post your comments below.
Sunday, February 3, 2008
Bank Relationships Are Key
By Mark Brousseau
A bank’s commitment to the customer relationship is the most important quality that finance executives from midsize companies look for in a cash management bank, according to Treasury & Risk’s 2008 Middle Market Survey. The price of cash management services and the quality of customer service were second and third most important, respectively.
In last year’s survey, the finance executives at midsize companies ranked the price of cash management services most important, followed by the bank’s commitment to the relationship.
What do you think? E-mail me at m_brousseau@msn.com.
A bank’s commitment to the customer relationship is the most important quality that finance executives from midsize companies look for in a cash management bank, according to Treasury & Risk’s 2008 Middle Market Survey. The price of cash management services and the quality of customer service were second and third most important, respectively.
In last year’s survey, the finance executives at midsize companies ranked the price of cash management services most important, followed by the bank’s commitment to the relationship.
What do you think? E-mail me at m_brousseau@msn.com.
Monday, January 7, 2008
Cash Flow Forecasting Seen Lacking
By Mark Brousseau
Thirty-three percent of those responding to this year’s 2008 Strategic Treasury Survey, conducted by Treasury & Risk and sponsored by SunTrust, believe that better technology and/or more outsourcing is needed in the area of cash flow forecasting – which led all other response categories by more than 17 percent. Some 303 treasurers, assistant treasurers and vice presidents of finance responded to the e-mail survey.
The next treasury area in which respondents thought better technology and/or more outsourcing was needed was budgeting and planning/cash management (15 percent), followed by accounts payable (13 percent), financial risk management (11 percent) and working capital management (10 percent).
What do you think? E-mail me at m_brousseau@msn.com.
Thirty-three percent of those responding to this year’s 2008 Strategic Treasury Survey, conducted by Treasury & Risk and sponsored by SunTrust, believe that better technology and/or more outsourcing is needed in the area of cash flow forecasting – which led all other response categories by more than 17 percent. Some 303 treasurers, assistant treasurers and vice presidents of finance responded to the e-mail survey.
The next treasury area in which respondents thought better technology and/or more outsourcing was needed was budgeting and planning/cash management (15 percent), followed by accounts payable (13 percent), financial risk management (11 percent) and working capital management (10 percent).
What do you think? E-mail me at m_brousseau@msn.com.
Tuesday, October 9, 2007
Accounting Technology Is Adequate ... Or Not
By Mark Brousseau
In a survey of finance leaders by Treasury & Risk magazine and Citigroup, a staggering 74 percent of respondents say accounting is the top function that is well supported by technology. Cash flow forecasting (33 percent), custody/trust (23 percent), foreign exchange (20 percent) and account reconciliation (19 percent) bring up the rear, albeit many lengths behind.
But before you accounting solutions providers get too full of yourself, it’s important to note that, in response to a separate survey question, finance leaders also pegged accounting as the top function that needs to be supported more effectively by technology (52 percent). Following close behind was business performance management at 51 percent. Other functions where finance leaders think technology could be doing a better job: cash flow forecasting (43 percent), compliance (37 percent; executives told the survey that they spend the most time on control and compliance) and account reconciliation (29 percent). The complete survey results can be found online at http://www.treasuryandrisk.com/.
How has your organization used technology to more effectively support accounting? E-mail me at m_brousseau@msn.com.
In a survey of finance leaders by Treasury & Risk magazine and Citigroup, a staggering 74 percent of respondents say accounting is the top function that is well supported by technology. Cash flow forecasting (33 percent), custody/trust (23 percent), foreign exchange (20 percent) and account reconciliation (19 percent) bring up the rear, albeit many lengths behind.
But before you accounting solutions providers get too full of yourself, it’s important to note that, in response to a separate survey question, finance leaders also pegged accounting as the top function that needs to be supported more effectively by technology (52 percent). Following close behind was business performance management at 51 percent. Other functions where finance leaders think technology could be doing a better job: cash flow forecasting (43 percent), compliance (37 percent; executives told the survey that they spend the most time on control and compliance) and account reconciliation (29 percent). The complete survey results can be found online at http://www.treasuryandrisk.com/.
How has your organization used technology to more effectively support accounting? E-mail me at m_brousseau@msn.com.
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