Kyriba: The CFO s Toolkit Minimize Risk and Ensure Compliance

Transcription

1 Kyriba: The CFO s Toolkit Minimize Risk and Ensure Compliance

2 What is Kyriba? Kyriba offers a premium cloud platform to supplement your ERP s capabilities, including bank and payment connectivity, cash forecasting, hedge accounting, intercompany and netting programs, financial instruments, and supply chain finance. Put simply, Kyriba is a risk management toolkit for CFOs, and provides essential support for enterprise risk programs. Kyriba supports the CFO to mitigate: 1. Liquidity risk 2. FX volatility 3. Fraud and cybercrime 4. Operational risk 5. Regulatory compliance 6. Business continuity 7. Working capital and supply chain risk 8. Technology risk 2

3 Liquidity Risk Cash is the lifeblood of the organization. Investors and analysts scrutinize the balance sheet, question the use of cash, and react harshly when cash is devalued through excess taxes or FX volatility. Global visibility Kyriba delivers visibility into every balance, every bank account, in every region. No dollar, euro, or yuan is unknown with Kyriba. Perfect the cash forecast Kyriba will enable your treasury team to build the forecast properly for days, weeks, months, and quarters in the future. Kyriba will also deliver the tools to measure the effectiveness of the forecast. Without such measurement, you have wasted your time. With Kyriba, you will have a global cash forecast you can rely upon to make strategic cash deployment decisions. Cash mobility Kyriba enables notional and physical cash pooling programs to ensure cash is concentrated and mobilized for optimal deployment in any region. Combined with an effective forecasting program, cash and liquidity can be distributed where it is needed most, eliminating liquidity risk and minimizing transaction costs. Funding share repurchase and dividend increases Kyriba will help you determine the optimal methods to fund shareholder value programs such as buybacks or dividend increases. With many balance sheets foreign cash balances, simply repatriating non-us balances is often costlier than issuing debt. Because Kyriba manages cash, credit facilities, and debt portfolios, we provide the data you need to make optimal funding decisions. 3

4 FX Volatility FX volatility is a problem for every global CEO. The CFO is expected to provide certainty and predictability of cash flow and earnings targets, yet these variables are subject to daily volatility. Significant movements in currency rates create multiple problems: Translation losses at each quarter end because the currencies move on a daily basis and unhedged balance sheet accounts will be subject to such rate volatility. EPS impact as revenues in foreign currencies (e.g. RMB) depreciate throughout the year. EPS impact as expenses in international markets increase when foreign currencies appreciate. Significant increases in foreign M&A and capital costs. Missed analyst expectations because of two successive quarters of FX gains leading to EPS growth followed by a quarter of significant FX loss. Kyriba offers visibility and automation to support cash flow and balance sheet hedging: FX exposure management Integration with online trading portals Trade confirmation Mark-to-market and fair valuations Hedge accounting Foreign exchange losses represented $0.02 of EPS and led to missing analyst estimates 4

5 Fraud and Cybercrime Kyriba provides controls to protect against fraud and cybercrime Financial fraud and cybercrime are two of the biggest risks that any company faces. Organizations impacted by both internal or external attacks can lose millions of dollars in direct losses and fines, and much greater financial impact in reputational risk. Kyriba offers broad a range of protection for CFOs, including: Protected login to systems. UserID and passwords are insufficient to protect access to financial systems. Your CIO will mandate two-factor authentication, IP filtering, encrypted VPN tunnel, and / or single-sign-on be used. Kyriba offers all of these security options in combination which will exceed your information security requirements. Data encryption: Spreadsheets do not encrypt data and do not offer protection from fraud as they are saved on internal networks and sent via . Kyriba encrypts everything and protects all data in the cloud, where IT prefers it be stored. Payment standardization: Disparate workflows and payment policies are the biggest opportunity for cybercriminals. Kyriba can enable a single payment policy globally regardless of payment type, system of origin, or global region. Payments can be authenticated with digital signatures for non-repudiation. Control bank accounts: Controlling bank accounts is necessary to prevent fraud, inadvertent access, and achieve regulatory compliance (e.g. FBAR). Kyriba enables your team to align your internal bank database with the banks records. Kyriba also offers complete front, middle, and back office separation to give you the visibility and control of your global account structures. 5

6 Operational Risk Managing corporate cash through a series of spreadsheets present a wide variety of unacceptable risks to the financial health of any organization. The risk of both intentional and unintentional mistakes being introduced, combined with the lack of oversight, make spreadsheets an ill-advised option: High error rates: 85-95% of spreadsheets contain errors, from incorrect formulae or re-keying errors. It only takes one mistake to create a serious problem; and spreadsheets often contain dozens of errors. Kyriba solves these problems, eliminating spreadsheets from processing of data. Lack of workflows and audit trail: although spreadsheets can be password-protected, there is no facility to restrict access by role, or establish workflows / audit trails. This creates the risk for unauthorized actions, resulting in data integrity concerns and financial loss. Business continuity and disaster recovery: IT cannot provide sufficient disaster recovery solutions for spreadsheets and supporting systems. Kyriba provides disaster recovery and business continuity so treasury and finance are always connected to banks, and always up and running. Compliance: Regulatory compliance such as Sarbanes-Oxley, FBAR, hedge accounting, and OFAC along with internal audit policies place significant stress on finance and financial systems. Kyriba provides information transparency, processing, reporting, and documented controls to simplify audit and compliance actions. Kyriba also provides customers with our own audit reporting both SOC1 and SOC2 Type II audits to simplify the reporting exercise. 6

7 Regulatory Compliance Regulatory compliance is time consuming for corporates who do not have strategic compliance teams like their banking counterparties. The CFO through their accounting and treasury teams must be experts in compliance, understanding the details of the regulation and the nuances of how to most efficiently comply. Kyriba specifically targets regulations that affect corporate finance, such as: FBAR: Kyriba tracks bank accounts, signatories, and bank balances to provide complete reporting for treasury or tax to file FBAR documentation for the corporation and individuals. OFAC: Kyriba offers payment screening capabilities and list management to provide notification of anti-money laundering hits on OFAC, EU, and UN watch lists. EMIR: Kyriba creates EMIR reporting and offers automated connectivity to trade repositories. Basel III: Kyriba supports categorization of cash forecasts into operational and non-operational groupings to optimize investment opportunities in the Basel III landscape. MM fund NAV: Kyriba helps corporates comply with upcoming floating NAV and other MM fund regulations implemented by the SEC and other national bodies. SOx: Kyriba offers structured and auditable workflows so that finance teams can demonstrate audit and controls for cash management, payments, bank accounts, and other separation of duties and data loss preventions. Kyriba offers SOC1 and SOC2 reporting. Hedge accounting: Kyriba enables corporates to more easily comply with FAS133 and 157 as well as IFRS 7/9/13 for fair valuations and hedge accounting. 7

8 Business Continuity Finance especially treasury has the highest service level requirements in the organization. IT does not have sufficient resources to provide 24x7 application support, 99.9% guaranteed uptime, and outages of less than four hours - no matter how big the disaster. Sacrificing any of these requirements means payroll may not be met, cash may not be transferred, a debt payment could be missed, or crucial FX or hedging trades can t be placed risking millions of dollars. Always up and running Kyriba uses multiple, world-class datacenters in parallel. Our system redundancy means clients are protected from any disruption, including significant disasters. Kyriba guarantees uptime and key KPIs including RTO and RPO. Supplier risk review Kyriba will pass the most stringent supplier risk reviews. Led by IT, they will evaluate every aspect of a proposed technology provider s operation, finances, technology, safeguards, and hosting facilities. Tip: Demand your cloud provider s SOC2 Type II reports. SSAE16/SOC1 is insufficient to address corporate information security requirements. Smaller technology providers often do not make the grade. Kyriba, however, will pass these reviews every time. Safer in the cloud IT will say that finance data is safer in the cloud if the right investments are met for data security, operational controls, and disaster recovery. Kyriba has made those investments, which are fully documented in our SOC2 Type II annual audit reports. 8

9 Working Capital and Supply Chain Risk A disruption in the supply chain due to suppliers lack of liquidity is completely avoidable A current focus for CFOs is to improve working capital. An obvious candidate to meet this objective is to improve days payable outstanding. However, extending DPO by delaying supplier payments stresses the liquidity of the very suppliers organizations want to be financially stable. Kyriba s platform offers two buyer-led payables programs that reduce this supply chain risk: 1. Self-funded dynamic discounting programs. 2. Third-party funded supply chain finance programs (also known as reverse factoring). Dynamic discounting There are two benefits of a dynamic discounting program: Early payment to suppliers at a financing rate better than they could achieve on their own. This reduces risk in the supply chain as suppliers own working capital is stabilized. Cash optimization dynamic discounting programs offer buyers an average APR exceeding 8%, and in many cases well into double digit returns. There is no better option to improve returns on excess corporate cash balances. Supply chain finance Third-party SCF programs instead involve a third-party financer (often the buyers banks) to finance the early invoice payment. Suppliers again benefit from early cash payments to stimulate working capital. For the buyer, the benefit is delaying payment the financer offers later payment terms than the original invoice which improves DPO and working capital KPIs. 9

10 Technology Risk: Premium Solutions over ERP The biggest risk for CFOs is that their technology platform prevents standardizing process, information, and controls. Lack of standardization leads: 1) Inefficiency and excess cost 2) Exposures to fraud and cybercrime, who prey on workflow exceptions 3) Lack of visibility and transparency in order to make key financial decisions, such as global cash deployment Kyriba eliminates these risks for CFOs by delivering: Pre-built functionality: Cash forecasting, bank connectivity, payment factories, intercompany pooling, hedge accounting all integrate fully with ERP and are ready to configure in the cloud. Seamless integration: Kyriba interfaces perfectly with all ERPs in many cases better than the ERP treasury module itself. Quicker Time to Market: an ERP treasury module takes two years to implement. Kyriba takes months and is managed without IT and external consultants. Kyriba s total cost of ownership is 10-20% of ERP Treasury Less Cost: ERP treasury modules cost millions. Kyriba typically requires 10-20% of the initial and ongoing investment in ERP treasury. Security in the cloud: Kyriba is securely in the cloud and meets every one of your CIOs information security requirements without any internal IT involvement. 10

11 Making the Business Case for Kyriba s Cloud Platform Kyriba is a SaaS solution, meaning that the only investment is a monthly subscription and initial implementation. Monthly subscription is typically between $1,000 and $10,000 per month, based on the modules selected. Implementation is one-time and is approximately 12x the monthly cost (in the first year only). The ROI for Kyriba 1. Automation with Kyriba, CFOs eliminate 200 hours per month of manual work for their finance teams. This generates approximately $120,000 annual benefit. 2. Cash Visibility by improving forecast accuracy, CFOs are able to reduce idle cash balances, increase returns on cash, reduce borrowing costs, and improve effectiveness of hedging programs. Annual benefits range from $100,000 to $1,000,000 annually. 3. Reduced Bank Fees CFOs incur significant bank fees each year, some of which can be eliminated through use of Kyriba. Rationalizing bank accounts, eliminating data storage costs and redundant users, as well implementing transaction netting will reduce bank fees by 10-20% on average. For most organizations this represents $50,000 to $100,000 annually. 4. Reduced IT Investment IT resources dedicated to treasury and finance incur cost and divert valuable resources from higher ROI initiatives. Kyriba requires no IT support, hardware, or dedicated headcount to provide hosting, upgrades, and disaster recovery/business continuity. Savings range from $100,000 to $500,000 per year. 5. Fraud Prevention Kyriba strengthens controls for cash management, payments and bank accounts. It is difficult to quantify these benefits exactly, although estimates range from $100,000 to $10M per event. 11

12 Further reading Five Questions CFOs Should Ask Themselves to Maximize Growth Taking Treasury from Reactive to Proactive Building the Business Case for a Treasury Management Solution About Kyriba Kyriba is the global leader in cloud-based Proactive Treasury Management. CFOs, treasurers and finance leaders rely on Kyriba to optimize their cash, manage their risk, and work their capital. Our award-winning, secure, and scalable SaaS treasury, bank connectivity, risk management and supply chain finance solutions enable some of the world s largest and most respected organizations to drive corporate growth, obtain critical financial insights, minimize fraud, and ensure compliance. To learn how to be more proactive in your treasury management and drive business value, contact treasury@kyriba.com or visit kyriba.com. Share this 12

13 Contact us North America 9620 Towne Centre Drive, Suite 250 San Diego, CA Tel: KYRIBA-0 United Kingdom 55 Bryanston Street London W1H 7AA Tel: +44 (0) France 247 Bureaux de la Colline Saint-Cloud CEDEX Tel: +33 (0) kyriba.com/blog twitter.com/kyribacorp Dubai 703 Icon Tower Tecom Dubai, UAE Tel: +971 (4) Japan JR Ebisu Bldg. 11F, Ebisu Minami Shibuya-ku, Tokyo Tel: info-jp@kyriba.com Singapore 8 Temasek Boulevard #14-04 Suntec Tower Three Singapore Tel: info-sg@kyriba.com linkedin.com/company/kyriba-corporation facebook.com/kyribacorp Netherlands Herengracht BX Amsterdam Tel: +31 (0) info-nl@kyriba.com Brazil Praia de Botafogo, 501 1º andar Torre Pão de Açucar, Botafogo Rio de Janeiro, RJ, Tel: info-br@kyriba.com Hong Kong Room 1708, Dominion Centre Queen's Road East Wanchai, Hong Kong Tel: info-hk@kyriba.com youtube.com/kyribacorp 13