In the dark about global cash? You’re not alone!

by ION Treasury from the Special Edition Newsletter April 2022

Five steps to improve global cash visibility

Global operations make it more challenging for small treasury teams in mid-market companies to handle day-to-day operations efficiently and securely. They struggle to keep an overview on their cash and risk positions. A professional cash management solution can help to overcome these challenges.

In the dark about global cash? You’re not alone!

In the past few years, the number of global mergers and acquisitions has reached an all-time high. Hit hard by their company’s growth, Treasurers often lose sight of their global cash. New currencies, global banking structures, regional regulations, disparate processes, and disconnected systems all add complexities to the treasury operations.

Treasury professionals may now have to keep an overview on hundreds of bank accounts with different bank partners, in multiple currencies and in many countries around the world. They need global structures, processes and policies that facilitate efficiency, visibility, control, security, and compliance. And they need technology.

Using simple tools, such as spreadsheets, or disparate solutions to manage complex operations leads to inefficiencies and errors. Cloud-based cash management systems, however, can make it easier to manage complex treasury operations, increasing transparency and control in cash, liquidity, and risk management.

To help treasurers get started on their path to success, we’ve prepared five steps to improve global cash visibility:

1. Centralize your bank accounts
Get an overview of your company’s bank accounts and centralize bank account administration. Control the management of bank account activities, such as openings, closings, electronic documentation storage, and signatory adjustments to minimize the potential for liquidity risks, such as unknown cash or large pockets of trapped cash.

2. Set up an authorization matrix
Define signatory and approval workflows to control bank account activity. Ensure an appropriate segregation of duties and implement a clear policy for the use of local and foreign currency bank accounts. Also be sure to document all activity, to prevent internal, and external fraud.

3. Automate your bank connections
Review your bank portfolio and find out how best to connect to your banks. You can collect bank statements manually from your bank portals, but it is better to automate your bank connections, using host-to-host connections or the SWIFT network. Always make sure your payment and message information are sent and received via the state-of-the-art message data type.

4. See your global cash and risk
Compare prior day and current day bank data to determine your global cash positions. Depending on your tools, consolidating positions and obtaining a clear picture of your cash on hand can be time consuming and error prone. Intra-day visibility into global cash positions and related exposures enables you to use your resources in an efficient and controlled way.

5. Analyze your global cash positions
Start analyzing the consolidated cash data to make short-term investment and financing decisions. Slice and filter various views of your cash. Review un-trapped and trapped cash. Cut your data by cash flow category, bank, currency, country, and organizational units, or other business or notional hierarchies.

Make global cash visible with a cash management solution

As your company grows internationally, it’s difficult to find out how much cash you have in each currency, and with each bank partner. You have probably outgrown your spreadsheet-based cash management operations.

Cloud-based cash management technology can help get on top of things again. Here’s how:

  • See your global bank accounts and cash positions in real time.
  • Track your bank account activity and implement approval workflows.
  • Connect to your global banks to automate statement collection and reconciliation.
  • Analyze your cash flows and exposures with interactive workflows, dashboards, and reports.
  • Collaborate across business units, functions, geographies, and time.

Using a cash management system enables you to:

  • Increase visibility, efficiency, and control in cash, liquidity, and risk management.
  • Improve security and compliance, while preventing fraud, and cyber risk.
  • Decrease bank fees, transactional, and operational cost.
  • Scale your cash management operations for future growth.

Complexity has negative effects on productivity and control. Cloud-based cash management solutions can help centralize, automate, and analyze global financial data, making cash visible again.

Case in point – A multinational company struggling with managing global cash sought a cash management solution.

CKE Restaurant Holdings, Inc. (known as CKE) is a privately held company based in Franklin, Tennessee. It runs and operates Carl’s Jr. and Hardee’s, two beloved regional brands known for one-of-a-kind premium and innovative menu items such as 100 percent Black Angus Thickburgers®, Made from Scratch™ Biscuits, and Hand-Breaded Chicken Tenders™. With both a U.S. and an international footprint, Carl’s Jr. Restaurants LLC and Hardee’s Restaurants LLC have over 3,800 franchised or company-operated restaurants in 44 states and 43 foreign countries and U.S. territories.

In 2021, CKE began using a cash management solution that connects the company to their banks and provides up-to-date transparency of cash balances and transactions.

The solution helps the finance team automate their cash management processes and:

  • Automatically reconcile bank transactions to projected cash flows.
  • Categorize cash movements.
  • Automatically generate accounting entries.
  • Forecast future cash flows.
  • Generate cash reports out-of-the-box.

We spoke to CKE’s Director of Treasury Karen Davis about why they selected their solution, what processes they were seeking to automate, and some of the benefits realized from the solution.

What business problems or pain points does your cash management solution help to address? I would say that the main thing I appreciate is how it eliminates human error. We’ve never had any significant errors previously, but it’s just those little things that we didn’t have any visibility on before. I really like the automation piece. Our current forecasting process doesn’t require a crazy amount of time. But it just doesn’t make sense for someone to spend 30 to 40 minutes pulling bank reports. There could be a better use of time.

How many bank accounts do you currently manage and how has your cash management solution helped streamline them? We just use one bank, but the setup is very complicated. We have securitization in place, in terms of all our borrowings. We have multiple business units with seven logins, and we pull reports from each of those. We’ve been able to work through this with our solution and now it is automatically uploading. Even though it’s a single bank, it’s seven bank logins. So our cash management solution has eliminated the necessity to log in to seven different bank portals and manually re-key that information.

Do you see your banking requirements changing as your business grows and expands? Over time, yes. We have certainly added a few accounts in the few years since I’ve been here. We are constantly looking for solutions to improve processes and procedures across the board. As we see new ventures, I could see us possibly adding more accounts to what we currently have.

What are the top benefits realized from using a cash management solution? I love the automation and removing the potential for keying errors. I love to save time and to eliminate the need for people to print and save PDFs of reports just to rekey those numbers into another file. Most people don’t appreciate that kind of work, especially when their time could be better used.

We’re working on tweaking reports on cash balances because I would love to get those to a place where this is our all-in solution.

What can you tell us about the setup process? The onboarding process was straightforward. It was an easy process, and we were up and running in less than half a day. Our solution provides remote access, so users can log in, check bank data, and pull reports from the phone app.

Do you envision this eventually replacing your old process? Yes. I hope that is the case prior to the end of this year.

How did you come across TreasuraSpark? My former boss was the treasurer and has always used a treasury platform, though probably a much more complicated one. He wanted to introduce us to treasury automation.

Is this the first treasury automation solution at CKE? Yes, it’s the first solution to be used here.

Did it take a lot of effort on his part to convince people of the benefits of treasury automation? No. Between the fact that it doesn’t require IT resources and the cost being reasonable, it was not a difficult sell.

Have you had any feedback from senior management on the solution? They are not close to it but at the end of the day, it enables us to get our reporting done on time, eliminates manual re-keying, and streamlines cash forecasting that required a lot of manual entry.

The featured solution in our case study was TreasuraSpark, the new cash management solution from ION Treasury.

TreasuraSpark gives your finance team an instant snapshot of cash at all times. It connects to your banks, aggregates data, and provides a real-time update on your cash position with automated reconciliation, and accounting. As your single source for all cash transaction detail, it offers a full audit trail.

Download the fact sheet

Purchase TreasuraSpark now

Other articles we think you’d be interested in:

When treasury becomes a term: Managing your new liquidity management needs

Help! My systems are too tight: Stepping up or adding on when you outgrow small business applications

Crossing the business banking to commercial banking chasm carefully: Growth and banking transitions

Other articles from this Special Edition Newsletter

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