Strategic Approach to Payments

Transcription

1 Strategic Approach to Payments TMANY Cash Exchange May 31 st, 2017

2 Discussion Framework Goals for Payment Factories Architecture Internal Collaboration & Design Benefits What's Next? 2

3 How do I answer. Do I have real time visibility into my liquidity, and can I access it? Do my global subsidiaries have the liquidity they need to be successful? Do specific subsidiaries hold too much local cash, and what is the associated cost and risk? Are AP payments being settled using the most efficient payment method? 3

4 Goals of Payment Factories

5 Typical Goals of Payment Factories Control - Cash Control Timing of AP Release Workflow & Approval regulation Efficiency Payments Standardize settlements Manage payment methods Facilitate approval audits Enhance Working Capital Management Manage daily liquidity needs and funding requirements 5

6 Legacy Architecture Complex workflows increases risk of fraud Many points of failure Local platforms in foreign languages Different system, different limits 6

7 Standard Payment Factory Business Case Understand your current total spend on payment processing This could include: work hours, fixed cost for connectivity, bank fees, paper check processing, maintenance of systems to name a few costs.. Understand the potential savings by implementing a payment factory Staff reallocation or elimination, less overall space, equipment, and office expenses. Reduced vendor management and technology maintenance across all Business Units. Additional savings + benefits Improved control over the payment process, elimination of re-work correcting errors, savings from global visibility of company cash flows, transaction processing efficiency minimizing risk, ensuring regulatory compliance, and standardization of formats. Cost associated with implementing the payment factory technology License Fees, maintenance fees, consulting 7

8 Architecture

9 Is this your payment process? 9

10 Non-Payment Factories Corporate HQ Sub 1 Sub 2 Sub 3 Sub 4 Sub 5 Joint Venture TMS ERP Bank Platform Check V e n d o r s 10

11 Payment Factories Corporate HQ Sub 1 Sub 2 Sub 3 Sub 4 Sub 5 ERP Payroll T&E TMS (Payment Factory) FTP SWIFT Aggregator V e n d o r s Joint Venture 11

12 What Changes? Input vendor payment directly to ERP Remove ERP connections to banks Revoke subsidiary access to Bank Platforms Corporate wide workflow harmonization 12

13 Choosing the Right Technology Workflow requirements Consider volume (payments, accounts, countries) SaaS, ERP Cash Management Connectivity Options (SaaS, FTP, SWIFT, SSB) Cash reporting (Intraday required?) Regulatory requirements (Turkey, Israel, Russia, China) Data Housing (Personal Information, Off Shore data storage) 13

14 Internal Collaboration & Design

15 Key Players Accounting Understand if Payment Factory setup will enhance their processes ERP Team/Upstream data include all ERP/upstream system configuration in central project plan, keep teams involved in all status meetings Central and Local Treasury Teams use local teams to gather regulatory requirements and local branch contacts IT connectivity, access, IT controls, remote approval capabilities, data storage regulations Compliance Should you follow corporate or subsidiary compliance, go-live audit requirements; change in quarterly controls External Auditors new audit process, retirement of legacy systems Banks connectivity payment formats 15

16 ERP Set payment method rules Migrate settlement details (repetitive payments) to vendors in ERP Set up inputters and approvals in ERP Understand all ERP scenarios 16

17 TMS Separate AP workflow Continue direct input financing activity Allow input by Joint Ventures Global and local payment formats Utility and tax payments P Card payments Check processing Netting 17

18 Banks Electronic bank formats Connectivity - SWIFT, FTP, SaaS, Aggregator Full list of payment countries 18

19 Change Management Training and process guides Request samples of all payment reports UAT, parallel and go-live audit Track KPI and DPO metrics 19

20 Benefits

21 Control, Efficiency & Enhancements Current day forecasting Better working capital management Trend analysis for mid/near term forecasting Reduce account balances Centralize bank relationship (BAM, Fees) Analyze and amend payment methods One process, one set of approval, one audit Reduced fraud risk 21

22 Savings Processing time Connectivity costs Platform access & token costs Wire costs Bank fee reduction (Negotiate pricing) Reduce excess cash at subs Hourly cost/headcount reduction 22

23 Other System Enhancements Expense systems Payroll systems Account Rationalization 23

24 Use Case

25 Issues Faced Multiple workflows for payment approvals Global origination of payments Separate cash management process Many upstream origins of payments Multiple connections to the same institution 25

26 Where the ask didn t outweigh need Small group of signers centralized approvers Mostly automated process manager approval Distinct workstreams prevented duplicate payments Propriety formats are typically easy builds Home grown systems, with strong IT group, fills gaps 26

27 How to build the case? Look past the current state! Cash reporting and payments through 1 pipeline Opportunity to standardize data through TMS Allows for enhanced reporting, data aggregation, forecast building Maximize connection utilization 27

28 How to choose connectivity? Define current resources and needs Multiple connections to banks (mostly FTP) Multiple branches with separate connections High headcount for maintenance TMS will capture and standardize Cash reporting Global payment formats 28

29 Options SWIFT Hub Provides Security Long time to market High Cost Complex architecture SaaS product No physical file volume limits Quick to market Outsource standards Aggregator More complex architecture High security 29

30 Solution SaaS solution Quick to market Strong security No regulatory file maintenance Proactive connection monitoring outsourced SWIFT Hub Possible future state Extend use beyond cash Highest security 30

31 What s Next?

32 Future Structures Shared services (Headcount reduction) Cash consolidation structures IHB Intercompany netting POBO 32

33 Questions? Jason M. Dobbs Actualize Consulting (201)