Posted by Mark Brousseau
After years of being relegated to the sidelines as a result of the economic downturn, attendees at this week's AFP Annual Conference at the Henry B. Gonzalez Convention Center in San Antonio, Texas, appeared to be back in the buying game, reports Mario Villarreal (mvillarreal@usdataworks.com), president and COO of Houston-based US Dataworks, Inc. (www.usdataworks.com). As evidence, Villarreal pointed to the advertised 30 percent bump in attendance, better booth traffic, and the more substantive conversations with prospects compared to last year.
"After several years of sitting through vendor presentations and strategizing internally about enterprise payments, many of the organizations at AFP appeared ready to buy," Villarreal said. "Based on the conversations we had at AFP, I think we will see a significant number of enterprise payments deals close next year." Villarreal said banks, in particular, appeared interested in enterprise payments.
Two key factors are driving the demand for enterprise payments, Villarreal said. First, operations have reached the breaking point in terms of effectively managing their existing payment silos. By consolidating all of their paper-based and electronic payment channels onto a single platform, organizations can reduce cost, eliminate redundant systems and processes, improve availability, gain better visibility into their payments, and apply consistent controls across their payment streams.
Second, organizations are more confident that they will have the budget necessary next year to kick-off an enterprise payments initiative. Furthermore, banks may be looking to make internal investments that deliver a reasonable rate of return rather than parking their cash and earning a measly 25 basis points, Villarreal said. "By no means are operations flush with cash, but IT budget dollars are loosening up for projects with a clear ROI, and enterprise payments fit that bill," he said.
What do you think?
Showing posts with label treasury management. Show all posts
Showing posts with label treasury management. Show all posts
Monday, November 15, 2010
Monday, September 20, 2010
SWIFT Service Bureaus & Corporate Connectivity
Theodore K. Baxter, Product Manager, EastNets
Implementing a global treasury system involves different channels of communication, via many different standards. SWIFT provides a globally recognized standard for communicating to your bank, reducing the workload of having to implement different banking formats and methods. This provides you with a single, secure, standardized global platform to conduct treasury management on an international level. And, using a single format across your global banks allows you to easily integrate SWIFT into your Treasury Management Systems and ERP.
SWIFTNet provides the following functions as part of its FIN:
• Treasury payments and notifications (MT 101), notice to receive (MT 210)
• Intraday (MT 942)/end-of-day bank statements (MT 940) and credit/debit advices (MT 900/910)
• Deal confirmations for foreign exchange/interest rate/money market deals (MT 3xx)
• Instructions to deliver/receive securities and statements of holdings (MT 5xx)
Using SWIFT in Liquidity Management
Having effective liquidity management allows an organization to gain the maximum benefits of their money at minimal cost. As a corporate you would Request for Transfer (MT 101) of your funds from one bank to another using FIN. Reporting on these treasury payments from each of your banks can be done again over FIN using the Interim Transactions Report (MT 942) or the end-of-day Customer Statement (MT 940) sent by each of your treasury banks. By integrating these end-of-day and intra-day statements into your corporate treasury systems you can better monitor accounts and obtain global visibility on cash. This allows for better control, and decisions on fund management.
The Business Case for Connecting to SWIFT
Corporates wanting to make the business case to connect to SWIFT take into account the costs and weigh them up against the benefits. These costs can include both SWIFT (registration, connectivity and messaging) and Non-SWIFT (project management, operations and applications integration) costs. Benefits can include both Operational benefits from reducing the number of different bank messaging systems and the reduction in staffing costs (either through reduction, reallocation or growth avoidance), as well as improved automation, and the financial benefits that come from working capital optimization and having better visibility of global cash, and transaction processing efficiencies. Other benefits include security, cost, standardization and integration.
Three Options for SWIFT Connectivity
There are three options when it comes to SWIFT connectivity: Direct, Indirect and Alliance Lite. The Direct method means that the SWIFT Connectivity infrastructure is owned and maintained by the company itself.
Indirect connectivity is achieved through a SWIFT Service Bureau or Member Concentrator, where they host and maintain the technical infrastructure for SWIFT connection, and can also provide additional services for the SWIFT connectivity. This is the most popular method for corporates to connect to SWIFT, allowing the Service Bureau to help guide the corporate through the SWIFT process, and taking advantage of the vast knowledge and experience held by some of these Service Bureaus.
Alliance Lite is the newest option for Direct Connectivity for corporates. Alliance Lite provides a simplified, secure, internet-based connectivity to SWIFTNet. It also offers a reduced uptime to get onto the SWIFT network.
Operational Benefits
One operational benefit of joining SWIFT is to reduce the number of communication channels to each of its banks; whether from fax banking, e-banking etc., to one SWIFT channel. SWIFTNet provides a communication platform, and the products and services that allow you to exchange financial information across a highly secure and reliable network. Another major benefit of adopting SWIFT is the reduction in staff costs from the improved automation. Staff can then be allocated for more important core functions. Using a Service Bureau can further extend this benefit, as it alleviates the need to have SWIFT experts on staff.
Financial Benefits
The financial benefits from using SWIFT include faster communication with your banks, allowing for better working capital optimization and better insight to what their money is doing. Reducing the number of cash management channels to one SWIFT channel reduces operational and maintenance costs. It allows for easier integration as a common standard is used.
The Service Bureau Option
One of the benefits of choosing a Service Bureau for your connectivity option is the ability to utilize the company’s experience in helping customers with their SWIFT onboarding process. SWIFT Service Bureau at companies such as ours help corporates join SWIFT by walking them through the process step-by-step. An experienced Service Bureau can help answer your questions relating to the planning of your SWIFT Project as in Figure 1, and the process of going live as in Figure 2. Another benefit of joining SWIFT through a Service Bureau is the reduced time it takes to get onto SWIFT – from months with a Network Provider installation, for example, to weeks with a company such as EastNets.
Providing a common language that banks understand, SWIFT allows you to utilize its standards driven formats such as FIN & ISO 20022 for liquidity and risk management. SWIFT provides the documentation to make sure you understand what information and services you are seeking to use and the messages to send to achieve these.
What do you think?
Implementing a global treasury system involves different channels of communication, via many different standards. SWIFT provides a globally recognized standard for communicating to your bank, reducing the workload of having to implement different banking formats and methods. This provides you with a single, secure, standardized global platform to conduct treasury management on an international level. And, using a single format across your global banks allows you to easily integrate SWIFT into your Treasury Management Systems and ERP.
SWIFTNet provides the following functions as part of its FIN:
• Treasury payments and notifications (MT 101), notice to receive (MT 210)
• Intraday (MT 942)/end-of-day bank statements (MT 940) and credit/debit advices (MT 900/910)
• Deal confirmations for foreign exchange/interest rate/money market deals (MT 3xx)
• Instructions to deliver/receive securities and statements of holdings (MT 5xx)
Using SWIFT in Liquidity Management
Having effective liquidity management allows an organization to gain the maximum benefits of their money at minimal cost. As a corporate you would Request for Transfer (MT 101) of your funds from one bank to another using FIN. Reporting on these treasury payments from each of your banks can be done again over FIN using the Interim Transactions Report (MT 942) or the end-of-day Customer Statement (MT 940) sent by each of your treasury banks. By integrating these end-of-day and intra-day statements into your corporate treasury systems you can better monitor accounts and obtain global visibility on cash. This allows for better control, and decisions on fund management.
The Business Case for Connecting to SWIFT
Corporates wanting to make the business case to connect to SWIFT take into account the costs and weigh them up against the benefits. These costs can include both SWIFT (registration, connectivity and messaging) and Non-SWIFT (project management, operations and applications integration) costs. Benefits can include both Operational benefits from reducing the number of different bank messaging systems and the reduction in staffing costs (either through reduction, reallocation or growth avoidance), as well as improved automation, and the financial benefits that come from working capital optimization and having better visibility of global cash, and transaction processing efficiencies. Other benefits include security, cost, standardization and integration.
Three Options for SWIFT Connectivity
There are three options when it comes to SWIFT connectivity: Direct, Indirect and Alliance Lite. The Direct method means that the SWIFT Connectivity infrastructure is owned and maintained by the company itself.
Indirect connectivity is achieved through a SWIFT Service Bureau or Member Concentrator, where they host and maintain the technical infrastructure for SWIFT connection, and can also provide additional services for the SWIFT connectivity. This is the most popular method for corporates to connect to SWIFT, allowing the Service Bureau to help guide the corporate through the SWIFT process, and taking advantage of the vast knowledge and experience held by some of these Service Bureaus.
Alliance Lite is the newest option for Direct Connectivity for corporates. Alliance Lite provides a simplified, secure, internet-based connectivity to SWIFTNet. It also offers a reduced uptime to get onto the SWIFT network.
Operational Benefits
One operational benefit of joining SWIFT is to reduce the number of communication channels to each of its banks; whether from fax banking, e-banking etc., to one SWIFT channel. SWIFTNet provides a communication platform, and the products and services that allow you to exchange financial information across a highly secure and reliable network. Another major benefit of adopting SWIFT is the reduction in staff costs from the improved automation. Staff can then be allocated for more important core functions. Using a Service Bureau can further extend this benefit, as it alleviates the need to have SWIFT experts on staff.
Financial Benefits
The financial benefits from using SWIFT include faster communication with your banks, allowing for better working capital optimization and better insight to what their money is doing. Reducing the number of cash management channels to one SWIFT channel reduces operational and maintenance costs. It allows for easier integration as a common standard is used.
The Service Bureau Option
One of the benefits of choosing a Service Bureau for your connectivity option is the ability to utilize the company’s experience in helping customers with their SWIFT onboarding process. SWIFT Service Bureau at companies such as ours help corporates join SWIFT by walking them through the process step-by-step. An experienced Service Bureau can help answer your questions relating to the planning of your SWIFT Project as in Figure 1, and the process of going live as in Figure 2. Another benefit of joining SWIFT through a Service Bureau is the reduced time it takes to get onto SWIFT – from months with a Network Provider installation, for example, to weeks with a company such as EastNets.
Providing a common language that banks understand, SWIFT allows you to utilize its standards driven formats such as FIN & ISO 20022 for liquidity and risk management. SWIFT provides the documentation to make sure you understand what information and services you are seeking to use and the messages to send to achieve these.
What do you think?
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?
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: Sunday
A roundup of the news from the AFP Conference today:
City of Los Angeles Wins AFP Pinnacle Grand Prize
The City of Los Angeles won the 2009 Pinnacle Award Grand Prize for excellence in treasury and finance at AFP's Annual Conference today. An independent panel of eight judges declared the Office of the Treasurer of Los Angeles had the superior entry out of a record number of submissions.
The Los Angeles Office of the Treasurer:
… Updated its 30-year-old system and reduced unidentified deposits from 1,220 to fewer than 20 per month;
… Automated general ledger posting, resulting in the reduction of 107 FTE hours per week;
Realized annual float savings of $1.13 million from implementation of four controlled disbursement accounts; and
… Decreased compensating balances with an associated increase in return on investment of $4 million.
"AFP is extremely proud to honor the City of Los Angeles as the 2009 Pinnacle Award Grand Prize winner," said Jim Kaitz, president and chief executive officer of AFP. "Despite seemingly insurmountable external and internal challenges, the City of Los Angeles transformed its treasury and finance operations to benefit residents by more efficiently handling taxpayer revenue -- and leading the treasury and finance industry in the process."
Judges were impressed by the sheer scope of the project: Los Angeles reengineered entire processes and systems while winning buy-in from multiple city agencies and political figures.
For winning the AFP Pinnacle Grand Prize, the City of Los Angeles receives a $10,000 donation from Wells Fargo to the charity of its choice. Los Angeles will donate the award to Angel's Flight for runaway and homeless youth, run by Catholic Charities of Los Angeles. The center is a refuge for runaway teens, most of whom are fleeing abusive families. Teens are welcomed with shelter, food, clothing, mental health care, counseling and education. The program includes a drop-in center and an outreach component, and reaches at least 3,000 adolescents a year.
BancTec Showcases Solutions at AFP Annual Conference
BancTec is highlighting its capabilities in accounts payable automation, digital mailroom and business process outsourcing (BPO) at the AFP Annual Conference.
"Many of the world's largest organizations utilize BancTec solutions to improve their internal operations and generate bottom-line cost savings," said Chuck Corbin, chief marketing officer, BancTec. "From helping organizations capture, deliver and manage their inbound communications more effectively, to improving accounts payable operations, we have enabled clients across the globe to simplify the management of their information, business processes and technology infrastructure. We look forward to interacting, and sharing our message with, the corporate treasury and financial management professionals at the AFP Annual Conference."
BancTec's CenterVision solution converges departmental capture applications and complex mailroom centers onto a common platform. BancTec says the CenterVision solution helps organizations speed up the delivery of business-critical information, streamline existing document processes, and more easily adapt to changing business requirements.
BancTec says its AP Master accounts payable automation solution enables enterprises to significantly lower the processing cost per invoice and gain improved financial management. AP Master can cut down the time, man hours and financial resources associated with the hassles and headaches of back-office AP processing, allowing organizations to focus more attention on pressing business challenges.
UMB Financial Executives to Speak at AFP Annual Conference
Michael Hagedorn, chief financial officer of UMB Financial Corporation will speak at the AFP Annual Conference this week.
Hagedorn will present “Exploring Shakespeare: A modern day economic tragic comedy” on Wednesday, October 7, from 8 – 9 a.m. in room 220. The presentation offers his professional insight into the actions the government is taking to correct the downturn of the economy, the choices businesses are facing and the financial decisions we make collectively as a society.
Hagedorn has more than 20 years of experience in the financial world. His responsibilities include corporate and regional finance, audit, compliance, regulatory reporting, strategic planning, management reporting, properties and enterprise project management.
Additionally, Dennis Triplett, CEO of UMB Healthcare Services, a division of UMB Financial Corporation, will speak at the AFP Annual Conference in San Francisco.
The presentation will take place on Monday, October 5, from 4 – 5 p.m. in room 236. Triplett will be co-presenting with Chris Ryan, chief strategy and marketing officer at SHPS, a leading provider of health improvement and health benefits solutions. The presentation, “Health Care Dilemma: Individual Responsibility, Social Good or Entitlement?” will address current health care reform proposals as well as health care consumerism.
Triplett has more than 27 years of experience in the banking industry. He oversees UMB’s strategic direction in healthcare banking and manages the sales and marketing activities, as well as product development and relationship management. In addition to his role at UMB, Triplett also serves as chairman of the Employers Council on Flexible Compensation and chairman of the America’s Health Insurance Plan’s HSA Leadership Council.
City of Los Angeles Wins AFP Pinnacle Grand Prize
The City of Los Angeles won the 2009 Pinnacle Award Grand Prize for excellence in treasury and finance at AFP's Annual Conference today. An independent panel of eight judges declared the Office of the Treasurer of Los Angeles had the superior entry out of a record number of submissions.
The Los Angeles Office of the Treasurer:
… Updated its 30-year-old system and reduced unidentified deposits from 1,220 to fewer than 20 per month;
… Automated general ledger posting, resulting in the reduction of 107 FTE hours per week;
Realized annual float savings of $1.13 million from implementation of four controlled disbursement accounts; and
… Decreased compensating balances with an associated increase in return on investment of $4 million.
"AFP is extremely proud to honor the City of Los Angeles as the 2009 Pinnacle Award Grand Prize winner," said Jim Kaitz, president and chief executive officer of AFP. "Despite seemingly insurmountable external and internal challenges, the City of Los Angeles transformed its treasury and finance operations to benefit residents by more efficiently handling taxpayer revenue -- and leading the treasury and finance industry in the process."
Judges were impressed by the sheer scope of the project: Los Angeles reengineered entire processes and systems while winning buy-in from multiple city agencies and political figures.
For winning the AFP Pinnacle Grand Prize, the City of Los Angeles receives a $10,000 donation from Wells Fargo to the charity of its choice. Los Angeles will donate the award to Angel's Flight for runaway and homeless youth, run by Catholic Charities of Los Angeles. The center is a refuge for runaway teens, most of whom are fleeing abusive families. Teens are welcomed with shelter, food, clothing, mental health care, counseling and education. The program includes a drop-in center and an outreach component, and reaches at least 3,000 adolescents a year.
BancTec Showcases Solutions at AFP Annual Conference
BancTec is highlighting its capabilities in accounts payable automation, digital mailroom and business process outsourcing (BPO) at the AFP Annual Conference.
"Many of the world's largest organizations utilize BancTec solutions to improve their internal operations and generate bottom-line cost savings," said Chuck Corbin, chief marketing officer, BancTec. "From helping organizations capture, deliver and manage their inbound communications more effectively, to improving accounts payable operations, we have enabled clients across the globe to simplify the management of their information, business processes and technology infrastructure. We look forward to interacting, and sharing our message with, the corporate treasury and financial management professionals at the AFP Annual Conference."
BancTec's CenterVision solution converges departmental capture applications and complex mailroom centers onto a common platform. BancTec says the CenterVision solution helps organizations speed up the delivery of business-critical information, streamline existing document processes, and more easily adapt to changing business requirements.
BancTec says its AP Master accounts payable automation solution enables enterprises to significantly lower the processing cost per invoice and gain improved financial management. AP Master can cut down the time, man hours and financial resources associated with the hassles and headaches of back-office AP processing, allowing organizations to focus more attention on pressing business challenges.
UMB Financial Executives to Speak at AFP Annual Conference
Michael Hagedorn, chief financial officer of UMB Financial Corporation will speak at the AFP Annual Conference this week.
Hagedorn will present “Exploring Shakespeare: A modern day economic tragic comedy” on Wednesday, October 7, from 8 – 9 a.m. in room 220. The presentation offers his professional insight into the actions the government is taking to correct the downturn of the economy, the choices businesses are facing and the financial decisions we make collectively as a society.
Hagedorn has more than 20 years of experience in the financial world. His responsibilities include corporate and regional finance, audit, compliance, regulatory reporting, strategic planning, management reporting, properties and enterprise project management.
Additionally, Dennis Triplett, CEO of UMB Healthcare Services, a division of UMB Financial Corporation, will speak at the AFP Annual Conference in San Francisco.
The presentation will take place on Monday, October 5, from 4 – 5 p.m. in room 236. Triplett will be co-presenting with Chris Ryan, chief strategy and marketing officer at SHPS, a leading provider of health improvement and health benefits solutions. The presentation, “Health Care Dilemma: Individual Responsibility, Social Good or Entitlement?” will address current health care reform proposals as well as health care consumerism.
Triplett has more than 27 years of experience in the banking industry. He oversees UMB’s strategic direction in healthcare banking and manages the sales and marketing activities, as well as product development and relationship management. In addition to his role at UMB, Triplett also serves as chairman of the Employers Council on Flexible Compensation and chairman of the America’s Health Insurance Plan’s HSA Leadership Council.
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.
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.
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.
Wednesday, June 18, 2008
Credit Steers Bank Relationships
By Mark Brousseau
The 2008 Treasury Survey by Treasolution Inc. confirms what lockbox providers have long suspected: corporate bank relationships are influenced by credit facilities.
Sixty percent of all respondents to the survey said their bank relationships are influenced by their credit facility, while 24 percent of respondents said their credit facility didn’t influence their bank relationships. Sixteen percent of respondents to the survey said their company didn’t have a credit facility.
Among respondents that had credit facilities, a whopping 72 percent of companies said they influenced their bank relationships, while 28 percent said they didn’t.
Does your corporate credit facility influence your bank relationships? Post your comment.
The 2008 Treasury Survey by Treasolution Inc. confirms what lockbox providers have long suspected: corporate bank relationships are influenced by credit facilities.
Sixty percent of all respondents to the survey said their bank relationships are influenced by their credit facility, while 24 percent of respondents said their credit facility didn’t influence their bank relationships. Sixteen percent of respondents to the survey said their company didn’t have a credit facility.
Among respondents that had credit facilities, a whopping 72 percent of companies said they influenced their bank relationships, while 28 percent said they didn’t.
Does your corporate credit facility influence your bank relationships? Post your comment.
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.
Monday, October 15, 2007
Efficiency Key To Corporate Treasury
By Mark Brousseau
For those of you still wondering about the industry’s move from traditional remittance processing to receivables management (which integrates transaction processing more tightly with accounting functions), a recent survey by Business Finance and JPMorgan Chase should give you pause.
Internal efficiency initiatives were cited by three-quarters of respondents as the most important driver of the corporate treasury function – ahead of the economy, mergers and acquisitions, globalization, and financial industry consolidation. Maybe there’s something to the push for A/R matching, auto-posting and invoice scanning after all.
What do you think? E-mail me at m_brousseau@msn.com.
For those of you still wondering about the industry’s move from traditional remittance processing to receivables management (which integrates transaction processing more tightly with accounting functions), a recent survey by Business Finance and JPMorgan Chase should give you pause.
Internal efficiency initiatives were cited by three-quarters of respondents as the most important driver of the corporate treasury function – ahead of the economy, mergers and acquisitions, globalization, and financial industry consolidation. Maybe there’s something to the push for A/R matching, auto-posting and invoice scanning after all.
What do you think? E-mail me at m_brousseau@msn.com.
Monday, February 26, 2007
Moving Money-Treasury Management Group looks to Tackle Remote Capture
by Harvey Spencer contributing editor and published in TAWPI's TODAY Magazine click here for a complimentary subscription to TODAY.Back in 1980 when I worked for NCR in Dayton, OH, I was responsible for implementing one of the early PC based Treasury Workstations. This software kept track of a company’s investments and then dialed the corporation’s bank accounts before the Treasurer arrived. By the time he arrived at 8:00 am, he had a complete cash position laid out and could make investment decisions faster. We were going to sell this to the banks so that they could sell them to their customers. As my Beta site, I installed this into NCR’s Treasury Department – then a $5 billion company – and the Treasurer reckoned that he gained two basis points in the market through having faster access to this information a lot of money. This all came back to me as I contemplated the impact of Check 21 and the push to install Remote Capture systems by Banks in corporations. As with Remote Capture, the banks thought that since the Treasury Workstation would give better control to their customers, they could create a closer liaison with them by selling these systems. This proved fallacious as large corporations, such as NCR, wanted to control their own relationships and did not want the banks’ systems in their Treasury areas. We are now seeing the same scenario played out –the banks want to put remote capture stations into corporations.
They cite the major reasons as being:
_ Improved Float Elimination of transportation/courier costs
_ Branch Account Consolidation
_ Fewer Processing Errors
_ Convenience and Safety
These are clear benefits, and from the bank’s viewpoint it saves
major costs, since their customer is effectively performing the
expensive proof and encode operation instead of them. However,
the problem with this approach is that it ignores the needs of the
corporation. What happens if the company wants to change its
major banking supplier? Must it return its Remote Capture system?
While I think that Remote Capture as supplied by Banks will be
successful in the SMB market, I doubt that it will fly in large corporations
over the longer term. As with the Treasury Workstation,
large corporations will want their own systems and will use the X9
standards to deliver standardized images to the banks they choose
or to a 3rd party service.
major costs, since their customer is effectively performing the
expensive proof and encode operation instead of them. However,
the problem with this approach is that it ignores the needs of the
corporation. What happens if the company wants to change its
major banking supplier? Must it return its Remote Capture system?
While I think that Remote Capture as supplied by Banks will be
successful in the SMB market, I doubt that it will fly in large corporations
over the longer term. As with the Treasury Workstation,
large corporations will want their own systems and will use the X9
standards to deliver standardized images to the banks they choose
or to a 3rd party service.
Clearly, they will vary this in order to:
_ Reduce costs
_ Reduce bank accounts
_ Optimize cutoff times
_ Improve float
_ Reduce bank accounts
_ Optimize cutoff times
_ Improve float
The banks will compete fiercely on this, but they now have a different playing
field from the traditional paper based one. For instance at – a Kansas bank – told me that they had extended their Check 21 today value cutoff to 6:00 pm Central
Time. Well that is fine if you on the East Coast, but if you are in California,
it is 4:00 pm – not much better than traditional times and a West Coast bank who makes their cut-off at 6pm gives East Coast companies up until 9:00 pm to deposit their check images. Services are appearing to facilitate this flexibility and decide how best to clear items. For example CheckFree introduced a service to enable automated clearing decisions to be made in order to leverage the new NACHA BOC rules which allow a small quantity of business checks to be cleared through lower cost ACH. SWIFT – used by banks to enable the secure movement of transactions internationally which corporations could only access through bank partnerships announced an enhanced Corporate Access capability named SCORE, which allows publicly listed corporations to electronically interact with a closed group of participating financial organizations. It is slowly reducing banking control. In addition, Remote Capture effectively means that a two-step operation must be performed:
1. Scan and balance the payments sending the check images
and cash letter to the bank
2. Post the payment to the AR system
It seems that it would be much more effective to integrate the posting with the capture. Two solutions I saw were Remitco, which is offering customized solutions to enable this integration, and, Creditron, a small Canadian that company has integrated into Microsoft Dynamics (formerly Great Plains). Trintech, specializing in transaction verification, is expanding into integration. From the perspective of TAWPI members, this seems like an emerging opportunity. On one side we have Invoice or AP processing starting to be installed – these systems, particularly when linked with procure-to-pay solutions allow far better and faster management of outgoing payments. On the other side we have Remittance or AR which is changing with the advent of remote capture, ARC and Check 21 and is becoming more integrated and distributed. Together the Corporate Treasurer can gain better and faster control over both the outgoing and incoming cash. At present, most Treasurers get end of day cash reporting – but more advanced companies are getting intra-day reporting. The business future will require real-time reporting but that is some way off according to Bent Benjaminsen, Senior Vice President Strategic Initiatives at Avantgard, a subsidiary of Sungard Systems. Linking AP and AR systems provides potentially huge benefits to major corporations and it seems that many AP and AR inputs will continue to be paper based. Like the Treasury Workstations of old, the bank controlled Remote Capture solution will not hold up in
major corporations, but its adoption will open doors to systems from those companies who capture paper and integrate with the AR systems as well as order-to-cash. But I predict that those who can provide integration of both AP and AR systems automation will be the big winners.
major corporations, but its adoption will open doors to systems from those companies who capture paper and integrate with the AR systems as well as order-to-cash. But I predict that those who can provide integration of both AP and AR systems automation will be the big winners.
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